Bakkavor pushed through price hikes in the UK to keep its revenue rising this year as its gears up for a sale to rival Greencore.
The prepared food manufacturer saw like-for-like revenue rise 1.2% to £1.1bn in the half of the year, driven by price hikes in the UK and strong volume growth in the US.
Its adjusted operating profit rose 9.8% to £61.5m, with the company now forecasting it will come in towards the upper end of its previous range of £120m to £126m for the full year.
This week, the UK’s Competition and Markets Authority launched an investigation into the sale of Bakkavor to Greencore.
The probe will look at whether the deal could affect competition in the UK or in other markets. A deadline of 27 October has been set for a decision.
The sale was agreed in May and is expected to be completed in early 2026.
Bakkavor completed the sale of its Chinese business in July, in a move it said would help “sharpen focus” on its core business.
The proceeds will also help the company’s efforts to reach a target margin of 6% adjusted operating profit, something it now expects to reach next year.
“The business is in great shape, with momentum expected to continue in the second half,” said CEO Mike Edwards.
“Looking further ahead, we have accelerated the delivery of our medium-term margin target of 6% to 2026, one year ahead of plan.
In the UK, the company’s annual revenue is expected to be broadly in line with 2024 as growth and price rises are offset by the closure of its Wigan factory. The move “saw the exit of a large proportion of the c£80m annualised sales, which particularly impacted volumes in meals and salads”, Bakkavor said.
In the US, the group expects “low single-digit growth” as it starts to close legacy businesses due to strong core growth.
The company increased its expected cost of inflation to £65m for 2025, up from £50m before. This is primarily driven by higher labour costs after the UK government raised National Insurance contributions and the minimum wage.
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