Greencore (GNC) 200p

Gain to date: 8.3%

Original entry price: Buy at 184.6p, 5 October 2017

Our positive call on convenience food maker Greencore (GNC) is given some credence by a robust first quarter trading statement (30 Jan).

The sandwiches, salads and chilled soups supplier caught our attention in October as we saw the company was poised to reap the benefits of a period of heavy investment. We expected rising cash flow to reduce indebtedness and help drive the shares higher.

Pro-forma revenue (adjusted to reflect the impact of major acquisition Peacock Foods in the US) was up 7.2% in the 13 weeks to 29 December 2017.

The company also noted that as expected ‘the trajectory of the group’s capital spend continued to reduce in the first quarter’. The group also says it expects to report a one-off non-cash credit of $28m in its first half results on 22 May thanks to reduced US corporation tax.

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