Bakkavor delivers robust annual performance

Bakkavor Group plc, the leading provider of fresh prepared food, has today announced its full year results for the 52-week period ended 29 December 2018.

Group revenue increased by 2.2% to £1,855.2m, up 3.2% on a like-for-like basis. The company saw a positive performance in the UK despite a tough market, with like-for-like growth of 1.8%.

There was accelerated growth in both the US and China, with a like-for-like increase of 16%.

UK adjusted EBITDA margin was maintained, with Group adjusted EBITDA up by 0.6% to £153.5m in a year of cost inflation and significant transition in the US.

All four key development projects are on track with two new US sites opened, Shanghai construction completed, and expansion of UK desserts site progressing well.

The acquisition of Haydens Bakery Ltd further increases capacity and capability in the firm's desserts category and is already delivering synergy benefits.

Agust Gudmundsson, Chief Executive Officer, said, “We delivered a robust performance in 2018, successfully driving growth across our UK and International businesses against a backdrop of significant market challenges. This reflects our market-leading expertise in producing great tasting fresh food, the quality of our people and our strong partnerships with customers.

“Subdued consumer confidence and inflationary pressures have continued into 2019, and therefore we remain cautious and expect little improvement in underlying market conditions. Consequently, we expect limited growth in the UK and a corresponding decline in the Group’s EBITDA margin in the first half of the year.

“However, in the second half, we anticipate an uplift in UK revenues as we benefit from recently secured new business. Given this additional volume, together with the actions we are taking to protect profitability, we expect a significant improvement in our trading in the second half of the year and our full year Group performance to be broadly in line with 2018.

“Looking further ahead, we remain confident that our strategy, combined with our scale and expertise leaves us well-placed to capitalise on further growth opportunities within the attractive FPF market, both in the UK and overseas.”