Bakkavor storms ahead in fresh prepared food
The ready meals firm said it had shrugged off retailers cutting back on promotions and subdued consumer spending over the 13 weeks to June 28.
As a result, it generated sales “comfortably ahead” of the wider fresh prepared chilled market, helped by new business wins, mainly in dressed and bagged salads.
The company also successfully pushed pre-tax profit up through continued restructuring of its operations, despite pressure from labour and utility costs.
Shifting frying business
That restructure had included shifting its frying business to a new £5M London facility and closing the original site, also located in the capital. The group also planned for the long-term by withdrawing from unprofitable activities.
Restructuring and asset impairment costs had added up to £6.9M in 2014 so far, it said, including redundancy payments.
Meanwhile, the company invested £5M in stone-baking and wood-firing pizza ovens at two sites in London to boost capacity.
On May 7, the group gained £7.3M from the sale of 40% of its Italian pizza business, after disposal costs.
Bakkavor posted half-year UK sales up 4% from £725.1M to £758.3M.
In the 26 weeks to June 28, the group drove like-for-like total revenue up by 5%, from £818.5M in the previous half-year period to £856.8M. Adjusted profit before tax and depreciation of assets rose by 6%, from £54M to £57.2M, comparing the same periods.
‘Improving margins’
“The Group delivered a strong first half performance, building our market share whilst also improving margins,” said ceo Agust Gudmundsson. “We expect the trading environment to continue to be challenging with the UK grocery market remaining highly competitive.
“Although the discounters continue to gain ground, we remain absolutely committed to supporting the growth plans of our existing customers. To achieve this, we are significantly increasing our capital spend to underpin recent business wins and we continue to invest heavily in product innovation.”
