Greencore Group - strong first half shows shares cheap at 240p, SQC TP 306p

Mark Watson-Mitchell - 27.05.2026

The UK's largest manufacturer of convenience foods

This morning Greencore Group (LON:GNC) reported a strong first half of 2026, with pro forma revenue growing 3.2% to £1,318m and pro forma adjusted operating profit increasing by 15.3% to £73.3m, leading to a margin improvement of 60 basis points to 5.6%.

The integration of Bakkavor is progressing well, with the company on track to deliver at least £80m in annual cost synergies within three years.

Despite a negative free cash flow of £76.0m, primarily due to working capital timing and integration costs, the company's leverage ratio stands at 2.3x, below expectations.

Greencore expects full-year adjusted operating profit to be in line with market expectations, and is exploring a potential sale of its US business.

Management Comment

CEO Dalton Philips stated that:

"We are proud to announce strong half year results for the new Greencore, having acquired Bakkavor in mid-January.

The combined business is in a great place, and I remain incredibly excited for Greencore's future.

The business continued to grow profitably during the half, with 15% pro forma adjusted operating profit growth and 3.2% pro forma revenue growth in the UK - during what was a busy period with the Bakkavor acquisition and integration.

This performance is testament to the focus and dedication of every one of our 28,000 colleagues who create great food, day-in-day-out.

The integration of Bakkavor is progressing well and to plan - and we are focused on bringing our 4,000-plus product portfolio and enhanced capabilities to our customers. We are firmly on track to deliver our target of annual cost synergies of at least £80m within three years post-acquisition.

While we continue to monitor macro developments and inflationary impacts from the events in the Middle East, we remain confident in the short-term mitigations we have in place and the outlook for the business.

We expect to deliver FY26 Adjusted Operating Profit in line with current market expectations."

Analyst Views

Darren Shirley and Clive Black, at Shore Capital Markets, reacted to this morning's results concluding that:

"Trading on an FY27 PER of 10.6x (EV/EBITDA 6.3), we see Greencore as fundamentally undervalued given its exciting medium-to-long-term prospects."

My View

This group's shares, at 240p, look good value and appealing ahead of a climb back over 300p.

(Profile 30.01.25 @ 183p set a Target Price of 228p*)

(Profile 15.05.25 @ 201p set a Target Price of 235p*)

(Profile 18.11.25 @ 233p set a Target Price of 260p*)

(Profile 26.05.26 @ 241p set a Target Price of 306p)