Bakkavör Group: earnings decline continues

Reykjavik / IS. (bk / ft) Icelandic Bakkavör Group, the United Kingdom´s largest producer of fresh prepared food and ready meals, was pushed into the red in the third quarter 2008 as a result of rising costs and higher interest charges. Stressing that more than 90 percent of its funding comes from non-Icelandic banks, the Iceland-listed group said its day-to-day trading activities were unaffected by the economic situation in its home country.

In the first nine months of the year, pre-tax profits declined from 48,7 million GBP to 7,8 million GBP on sales ten percent ahead at 1,2 billion GBP. The profit, however, was before a 62,5 million GBP loss on financial assets. The founders of Bakkavor, Agust and Lydur Gudmundsson, have offered to buy the 39,6 percent stake held by the investment group Exista. The Icelandic firm said it was selling its 855 million Bakkavor shares for 9,79 ISK, approximately 0,051 GBP per share. The deal was subject to creditors´ approval, Exista said in a statement.

Results for the first nine months 2008

In the financial statement release Chief Executive Officer Agust Gudmundsson said: «Bakkavör Group is progressing in very challenging conditions as we continue to focus on our business priorities to mitigate inflationary costs, improve operational efficiencies, increase market share and drive significant cash generation. As such we are making firm groundwork towards our stated intention of returning to profit growth in 2009». The results in highlights:

  • EBITDA 87,9 million GBP in the first nine months (9M/2008) of the year.
  • Turnover 1,2 billion GBP in 9M/2008, up ten percent and 402,8 million GBP in Q3/2008, up seven percent.
  • EBITDA 87,9 million GBP in 9M/2008, down 24 percent, and 29,4 million GBP in Q3/2008, down 26 percent, including restructuring costs of 4,8 million GBP in 9M/2008, of which 1,7 million GBP in Q3/2008.
  • EBITDA margin 7,3 percent in 9M/2008 and 7,3 percent in Q3/2008 (underlying EBITDA margin 7,7 percent in 9M/2008 and 7,7 percent in Q3/2008, excluding restructuring costs).
  • Operating profit (EBIT) 54,7 million GBP in 9M/2008, down 37 percent, and 18,2 million GBP in Q3/2008, down 39 percent.
  • Cash flow from operating activities 44,3 million GBP in 9M/2008, down 46 percent, and 28,8 million GBP, up 41 percent, in Q3/2008.
  • Shareholders´ earnings, excluding loss on other financial assets, amounted to 5,8 million GBP in the first nine months.
  • Return on equity 3,3 percent, excluding loss on other financial assets, compared with 19,2 percent in 9M/2008 2007.
  • Earnings per share 0,003 GBP in 9M/2008 excluding loss on other financial assets, compared with 0,017 GBP in 9M/2008 2007.
  • Loss on the Group´s economic interest in 10,9 percent shareholding in Greencore Group PLC under a CFD (contract for difference) 58,5 million GBP in 9M/2008, of which 12,3 million GBP in Q3/2008.
  • In October, the Group relinquished its 10,9 percent economic interest under a CFD, as a result of a withdrawal of the funding source.
  • As a part of ongoing review, further restructuring in ready meals proposed in Q3/2008 and October 2008.
bakenet:eu