Greencore Group PLC on Tuesday said it will launch a £30 million share buyback and added that it could return to the dividend list should it trade as expected.

Greencore shares were up 15% to 160.60 pence each in London on Tuesday morning.

The Dublin-based producer of convenience foods said in the first half ended March 29, it swung to a pretax profit of £14.7 million, from a pretax loss of £6.2 million the year prior.

Revenue fell 6.4% to £866.1 million from £925.8 million. The revenue decline reflects its decision to leave a ‘number of low margin contracts’.

Helping its bottom line, cost of sales fell 12% to £585.0 million. It reported £1.5 million worth of net exceptional costs, down from £6.4 million. Exceptional costs this time around included £1.5 million worth of transformation costs. Costs in the prior year included £7.7 million worth of reorganisation costs.

Greencore reported its first-half adjusted operating margin grew to 3.3% from 1.3%. Adjusted operating profit jumped to £28.3 million from £11.8 million.

The company currently expects a full year adjusted operating profit in the range of £86 million to £88 million, up from £76.3 million last year. Its guidance is ahead of ‘current market expectations’.

Chief Executive Officer Dalton Phillips said: ‘We are working with our major retail customers to develop new products and new offerings which are driving the growth of our Food to Go segment ahead of the market. We have exited low margin business and are undertaking a range of actions to increase the returns profile of each element of the portfolio.’

If trading continues as expected, Greencore said it will pay a dividend for the first time since financial 2019.

The company also announced a £30 million share buyback. This follows a previous buyback between May 2022 and February 2024 which returned £50 million to shareholders.

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