Ready meals maker and fresh foods producer Bakkavor saw a 4.6% drop in first half revenues as Covid-19 had a “significant impact” on performance.

Bakkavor’s overall revenues in the first six months of 2020 fell 4.6% to £880.5m with like for like revenues down 5.2% compared with the same period last year.

It said that the coronavirus outbreak had a significant impact on its overall performance during this period, with its business in China severely impacted towards the end of January, and its UK and US businesses experiencing a sharp reduction in sales volumes in the last week of March and into April.

This situation improved into May and June as volumes in all three regions started to stabilise and show early signs of recovery. However, markets remain volatile and consumer habits continue to adjust.

Adjusted operating profit was impacted by lower sales volume in the period and fell 32.3% to £28.7m.

Pre-tax profits were down 65.1% to £6.8m as it took measures to protect the bottom line, including a substantial cut in capital expenditure to £21m and a focus on essential maintenance projects.

However, Bakkavor said it had seen a steady recovery in trading across the business in June, which has been maintained into the second half of the year.

It said the macroeconomic uncertainty caused by Covid-19, combined with limited clarity as to the terms and implications of the UK’s exit from the EU, means that it maintains a cautious outlook for the rest of this year and into 2021.

“However, our performance in the first half of the year has proven our ability to withstand major operational challenges and gives us confidence in the quality of our business model and strength of our customer partnerships,” it stated.

CEO Agust Gudmun commented: “The first half of this year has been extremely challenging, but I am pleased to report that the group has produced a solid performance given the Covid-19 issues the business has faced. The scale and strength of our operations, coupled with our ability to react at speed, has proved a clear advantage to our customers during this period.

“But more than this, our performance is testament to the hard work and commitment of everyone at Bakkavor. In difficult circumstances, we have worked tirelessly to minimise disruption and continue to deliver for our customers. We are fortunate to have such dedicated colleagues and their health, safety and wellbeing continues to be our foremost priority. I am hugely grateful for their support.

“We have taken many difficult yet necessary decisions this year to protect the long-term success of our business. Whilst there will be further challenges ahead, we remain a robust, balanced and well capitalised group and the steps we have already taken to protect our business, combined with the recent improvement in trading, gives us confidence for the future.”

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