Greencore stock fell 16% – wiping around € 150million from the ready meals group’s market value – as it signaled a drop in first-half revenue and a loss due to the continued impact of restrictions of Covid.

However, chief executive Patrick Coveney said Greencore is expected to see a recovery in annual revenues, to pre-Covid levels, this year and hopes to resume shareholder dividends in 2022.

Greencore said its revenue fell 19% to £ 577.1million (€ 670million) in the six months leading up to the end of March. The group recorded a pre-tax loss of £ 1.8m for the period, compared to a profit of over £ 27m 12 months earlier.

Return to normal expected this year

Despite a tough first half, Greencore is targeting the kind of revenue it was generating before the pandemic, in its current fiscal year which ends at the end of September. This would suggest a return to revenue of around £ 1.4bn to £ 1.5bn.

Mr Coveney said the faster-than-expected forecast for a return to pre-Covid growth levels is based on the £ 175million in new business won by Greencore over the past 12 months.

The group is also working on the renewal of existing key contracts and is pursuing a pipeline of new commercial contracts.

He said the market for Greencore’s main takeaway line of prepackaged sandwiches, salads and wraps is expected to recover by the end of 2021 as its main UK market returns to normal and, in Due to the new levels of activity, Greencore is expected to grow ahead of the larger market.

Turnover “ only 5% behind pre-Covid levels ”

Mr Coveney said he was surprised by the move in the share price, but suggested investors were more concerned about Covid’s impact on performance – at a time when no official guidance was given – than by the way the business was run.

He said the outlook for the company should reassure shareholders. Overall, Greencore stock has risen by around 16% in the past 12 months.

Greencore said it has seen “encouraging revenue momentum” in the first seven weeks of the second half of its current fiscal year, including strong levels of recovery in the take-out segment.

On a group-wide basis, Mr Coveney said second-half revenue is currently only 5% lower than it was before the Covid crisis, while the take-out food division is 14% behind.