Bakkavör: returns to profit in Q2/2009

Reykjavik / IS. (bkg) Fresh prepared food specialist Bakkavör Group has reported on a much-improved second quarter of the year, with net profit hitting 26,4 million GBP (30,1 million EUR) from the net loss of 23,5 million GBP (26,8 million EUR) recorded last year. In a Financial Statement about Q2/2009 the Group posts highlights and/or summary as follows:

• Q2 EBITDA up 5,7 percent to 37,3 million GBP (Q2/2008: 35,3 million GBP).
• Improved EBITDA margin in Q2 at 8,7 percent compared to 8,3 percent in Q2/2008.
• Q2 Net Profit of 26,4 million GBP compared with a loss of 23,5 million GBP in Q2/2008, a significant turnaround of 50 million GBP.
• Q2 earnings per share were 0,012 GBP compared with a loss per share of 0,011 GBP in Q2/2008.
• UK fresh prepared foods sales continue to accelerate with seven percent growth in the quarter, supported by a strong performance in ready meals.
• Cash inflow from operations, excluding one-off restructuring costs of 46,4 million GBP in Q2/2009, up 76 percent on Q2/2008.
• Q3 trading expected to remain strong. Management forecasting a 25 percent increase in EBITDA in the quarter and raising the forecast for the full year 20 percent to 130 million GBP.

CEO Ágúst Gudmundsson: «As anticipated when we reported our first quarter results in May, Bakkavor has now returned to EBITDA growth following the successful implementation of our restructuring plan at the start of the year. Furthermore, our cash position has improved considerably reflecting greater operational efficiencies, a marked improvement in profitability and greater control of working capital. As the benefits of these actions become more pronounced, we expect our cash generation to continue to grow throughout the second half of the year. Group sales in our UK fresh prepared foods business are accelerating, with strong sales growth of 10% in ready meals, one of our core drive markets. This demonstrates the inherent strength of our market positions, our operational flexibility and ability to adapt to a fast-changing marketplace. We now have a stable platform from which to grow the business going forward and our revised EBITDA guidance for the full year reflects our renewed confidence. At the holding company level, we are in the advanced stages of refinancing of all indebtedness. Our discussions with our Icelandic institutional creditors are constructive and we hope to announce a conclusion shortly. These discussions follow the successful renegotiation in March of facilities for our operating business providing fully secured financing for the next three years».