Greencore’s first combined half-year numbers after buying Bakkavor look solid on the measures that matter most operationally. The business grew, margins improved, integration is on track, and management kept full-year guidance intact.
The catch is that the reported accounts are messy, which is exactly what you’d expect after a £1.5 billion acquisition. So this is one of those updates where the underlying story looks better than the statutory headline.
Greencore H1 2026 results show 15.3% pro forma profit growth
The key phrase in this RNS is pro forma. That means Greencore is showing the numbers on a like-for-like basis to reflect the enlarged group, so investors can compare this year with last year more fairly after the Bakkavor deal.
On that basis, the UK business put in a good performance. Revenue rose, profit grew faster than sales, and margins moved up, which usually tells you management is controlling costs properly rather than just relying on price rises.
| Key numbers | H1 2026 | H1 2025 | Change |
|---|---|---|---|
| Pro forma revenue | £1,318.0 million | £1,276.8 million | +3.2% |
| Pro forma adjusted operating profit | £73.3 million | £63.6 million | +15.3% |
| Pro forma adjusted operating profit margin | 5.6% | 5.0% | +60bps |
| Adjusted EBITDA | £111.2 million | £73.1 million | +52.1% |
| Operating profit/(loss) | (£13.4 million) | £38.1 million | (135.2%) |
| Free cash flow | (£76.0 million) | £37.8 million | (£113.8 million) |
| Net debt excluding lease liabilities | (£817.6 million) | (£136.2 million) | (£681.4 million) |
| Adjusted EPS | 8.0p | 6.1p | +31.1% |
That 15.3% rise in pro forma adjusted operating profit is the standout figure for me. In plain English, the combined UK food business is already producing more profit from each pound of sales, even while management is dealing with the complexity of a major takeover.
What drove Greencore’s stronger profit and margin performance
Greencore said pro forma revenue growth of 3.2% came from a positive impact of volume and mix of 0.8% and inflation recovery and price of 2.4%. That matters because it was not just price doing all the heavy lifting.
Volumes in legacy Greencore were up 0.3% in a flat grocery market. Legacy Bakkavor UK volumes were down 1.3% in the short ten-week post-acquisition period, partly because of lapping minor business exits from last year.
There are a few encouraging operational details in here too. Greencore launched 308 new products, won fresh business in salads, sushi, ambient grocery and desserts, and says those wins should drive around 100 basis points of annualised revenue growth.
Customer service stayed above 99% through Christmas and during the integration period. For a food manufacturer supplying major supermarkets, that is not a throwaway stat – it is a sign the machine is still running smoothly while management is rebuilding it.
Why Greencore reported a statutory operating loss after the Bakkavor acquisition
Now for the ugly bit. Greencore reported an operating loss of £13.4 million, down from a profit of £38.1 million last year.
That does not mean the core trading business suddenly fell apart. The loss was mainly caused by acquisition-related exceptional costs and amortisation.
Exceptional items are one-off costs management says do not reflect normal trading. In H1 2026, these totalled £75.3 million before tax, including:
- £60.6 million of acquisition and integration related costs
- £7.8 million of transformation costs
- £6.9 million of defined benefit pension scheme restructuring costs
On top of that, Greencore took £13.0 million of amortisation of acquisition-related intangibles. That is an accounting charge that spreads the value of acquired assets, such as customer relationships, over time.
This is why adjusted operating profit rose to £73.3 million while statutory operating profit sank into the red. For retail investors, the main question is whether these costs are genuinely one-off. Based on the RNS, most of them look directly tied to the Bakkavor deal, though integration costs will not disappear overnight.
Greencore Bakkavor integration progress looks credible – and the £80 million synergy target matters
This is where the story gets interesting. Greencore says Bakkavor integration is progressing well and to plan, with the people consultation process complete and a single functional organisational design live since mid-April.
The big prize is at least £80 million of annual cost synergies within three years of the acquisition. Management says it remains firmly on track, with around 50% of the annual run-rate expected by January 2027, 85% by January 2028 and 100% by January 2029.
That is a chunky number. If delivered, it would be a meaningful boost to profits and could justify a lot of the pain investors are seeing today in exceptional costs and higher debt.
I also like that Greencore gave examples of early synergy delivery already, including the exit of duplicated central functions, the consolidation of London offices, and removing overlap across advisers and overheads. That makes the synergy target feel more real.
Greencore debt and cash flow after the Bakkavor deal are the main risk to watch
The balance sheet is the obvious pressure point. Net debt excluding lease liabilities jumped to £817.6 million from £136.2 million, and leverage rose to 2.3x from 0.8x.
That sounds dramatic, but it is exactly what happens when you fund a large acquisition. The better news is that leverage was below the expected c.2.5x range following completion, and Greencore still had £330.0 million of undrawn committed bank facilities at the half year.
Free cash flow was negative at £76.0 million, compared with positive £37.8 million last year. Management blamed timing-related working capital outflows and exceptional acquisition and integration costs, which fits with the detail: working capital was a £86.0 million outflow and cash exceptional outflows were £59.0 million.
This is not ideal, but I would not overreact to one half in isolation. The business is seasonal and weighted towards the second half, so H2 cash performance matters more.
US business held for sale could simplify the Greencore story
Greencore has classified its US business as a held for sale asset and is exploring a potential disposal. The company said the US business continues to perform strongly, and it contributed £4.0 million of profit from discontinued operations in H1.
No sale price was disclosed, so investors should not start pencilling in a windfall. But strategically, it makes sense. Greencore is increasingly a focused UK convenience food story, and selling the US arm could help simplify the group and potentially support deleveraging.
Greencore outlook for FY26 remains steady – and that is a positive signal
Management said trading in Q3 has remained robust and expects FY26 adjusted operating profit to be in line with current market expectations. Before this release, that consensus averaged £232 million, with a range of £227 million to £241 million, inclusive of the US business contributing around £10 million.
That guidance matters because Greencore had every excuse to sound cautious after such a large acquisition. Instead, it held the line, while also acknowledging risks around inflation and events in the Middle East.
The company also said it has c.75% of raw ingredient spend in joint models with customers and has fully hedged gas and electricity for FY26 and the majority for FY27. That gives it some near-term protection if input costs become awkward again.
What this Greencore RNS means for retail investors
My read is that this is a positive update overall. Underlying trading is strong, the early integration signs are good, and Greencore looks to be extracting genuine operating benefits from the enlarged business.
The negatives are real too. Debt is much higher, free cash flow was weak, and statutory profits are going to look ugly for a while because acquisition charges and amortisation are now part of the picture.
Still, if you own Greencore shares, this RNS should give you some confidence that the Bakkavor deal is not drifting off course. The investment case now hinges on three things: delivering the £80 million synergies, improving cash generation in H2, and keeping leverage under control.
Get those right, and this deal could start to look very smart. Miss on them, and investors will get far less patient very quickly.
