Business wins have helped Bakkavor shrug off the weak grocery market and deliver strong first-half growth.
On Thursday, the own-label supplier said it had grown like-for-like sales by 5% to £856.8m in the six months to 28 June and adjusted EBITDA by 6% to £57.2m.
Bakkavor said the effect of business wins was offset by what it called “the weaker underlying market”. It has, for example, gained market share in the pizza market following the closure of Paramount Foods at the end of 2012.
The group said it was increasing capital investment to support growth at its main supermarket customers.
“Although the discounters continue to gain ground, we remain absolutely committed to supporting the growth plans of our existing customers,” said Bakkavor CEO Agust Gudmundsson.
The company said it was increasing its stone-baking and wood-firing capacity in its pizza business, as well as undertaking significant investments in its salad factories to increase capacity and improve quality. In the US, it said it was tripling capacity at its East Coast facility to keep up with growing customer demand.
Bakkavor has also made progress to reduce its substantial debt pile, cutting net debt by £16m and leverage from 5x adjusted EBITDA a year ago to 4.4x at the end of the first half.