Leaner Bakkavor grows profits and turnover

Ready-meal maker Bakkavor grew like-for-like sales by 6% in the second quarter, as it put consumer concerns following the horsemeat scandal behind it.

Like-for-like turnover climbed to £432.8m in the quarter, while pre-tax profit was £15m.

UK turnover reached £382.4m, up 6%, with Bakkavor recording sales growth in salads, soups, pizzas and desserts. “We are seeing a limited recovery in ready meal sales following the impact of the horsemeat contamination issue earlier this year, and we are continuing to work very closely with our customers to re-establish consumer confidence in this sector,” the company said.

None of Bakkavor’s products were implicated in the horsemeat scandal.

Bakkavor offloaded its French and Spanish businesses in the quarter, earning it a profit of £14.5m. The closure of its Canadian operation, meanwhile, incurred a £1.5m charge. It also restructured its Belgian and Czech Republic operations to focus on their local markets.

“We have continued to make good progress in the second quarter with strong revenue growth, increased profits and improved cash generation,” said Bakkavor’s CEO Agust Gudmundsson.

“Whilst we expect trading conditions to remain challenging due to inflationary headwinds, a competitive retail environment and ongoing pressures on household budgets, we remain confident in our strategy and our market-leading position in the chilled convenience market.”

Like-for-like half-year sales rose 4% to £830.9m.

In June, Bakkavor completed a refinancing deal, which it said “extends the maturity of the Group’s debt, diversifies our sources of funding and secures liquidity for the future, placing the Group in a stronger financial position”.