Bakkavör defies doomsayers to predict growth

Icelandic conglomerate Bakkavör Group, which owns UK fresh food businesses Geest and Katsouris, is maintaining an optimistic picture for 2008, despite warnings of a global recession.

“We believe 2008 will continue to be challenging, but with a solid underlying business, strong cash flow and a good competitive advantage in the fast-growing global fresh prepared foods markets, Bakkavör Group is well-positioned to continue to grow and meet the increasing demand for fresh prepared foods around the world,” said chief executive officer Agust Gudmundsson, announcing the group’s annual results for 2007.

However, he admitted the past year had been a struggle. “In 2007 we were faced with the toughest trading conditions in decades as well as a series of challenges that heavily affected Bakkavör Group’s sales and performance. These included a product recall at the beginning of the year, unprecedented raw material price increases, extreme weather conditions in the UK and restructuring costs, mainly to optimise capacity within our ready meals operations - all of which had a significant impact on the Group’s performance.”

Gudmundsson said group turnover had risen 21% to £1.5bn in 2007. Growth in like-for-like underlying sales had risen 6.3% across the year. Operating profit reached £110M in 2007, down 3%.