Bakkavor Group: Announced Full-year 2019 Results

Reykjavik / IS. (bkg) Island’s Bakkavör Group, a leading provider of fresh prepared food, announced its full year unaudited results for the 52-week period ended 28 December 2019.

Financial Highlights

  • Group revenue up 1.5 percent to GBP 1,885.9 million
  • Group like-for-like revenue1 up 1.7 percent to GBP 1,787.2 million:
    • UK up marginally 0.2 percent to GBP 1,559.8 million in a challenging market
    • International growth strong at 12.8 percent to GBP 227.4 million
  • Adjusted Ebitda1 pre IFRS 16 in line with prior year at GBP 153.5 million, with Adjusted Ebitda1 margins protected in the UK
  • Operating profit lower at GBP 69.4 million (2018: GBP 85.6 million), impacted by GBP 20.3 million of exceptional costs and GBP 15.5 million of start-up losses for new sites
  • Basic earnings per share of 6.4p and Adjusted earnings per share of 12.7 GBPence
  • Operational net debt increased by GBP 45.5 million to GBP 354.8 million due to planned capital investment
  • Proposed final dividend of 4 GBPence per Ordinary share, giving full year dividend of 6 GBPence per Ordinary share

Operational Highlights

  • Clear leadership position in the UK with share gain in three core categories
  • Completed investment at desserts site in Newark and integration of Blueberry Foods on track
  • UK benefited from transfer of significant new meals business following investment at four sites
  • Easing of commodity price inflation in H2 helped offset rising labour costs
  • Developing stronger US retail partnerships to build foundations for future growth
  • Three new sites in China now fully operational, increasing capacity to support growing demand
GBP million (unless otherwise stated) FY 2019 FY 2018 Change
Group revenue 1,885.9 1,857.2 1.5%
Like-for-like revenue 1,787.2 1,757.9 1.7%
Adjusted Ebitda pre IFRS 16 153.5 153.5
Adjusted Ebitda margin pre IFRS 16 8.1% 8.3% (20bps)
Adjusted operating profit 105.2 111.7 (5.8%)
Operating profit 69.4 85.6 (18.9%)
Basic EPS 6.4p 11.6p (5.2p)
Adjusted EPS 12.7p 14.5p (1.8p)
Free cash flow 51.1 55.1 (4.0)
Net debt (excluding IFRS 16 lease liabilities) 354.8 309.3 45.5
Interim dividend per share 6p 6p

Agust Gudmundsson, Chief Executive Officer, said: «This was another solid year for Bakkavor, in which we delivered further growth, increased market share, and strengthened our operations both in the UK and internationally, whilst reporting performance in line with expectations.

«In the UK, against difficult market conditions, and with further labour inflation and low consumer confidence, we successfully protected Ebitda margins and held our underlying profitability. We have significantly strengthened our market-leading position in the desserts category and launched a major new meals range for one of our strategic customers which give us confidence going into 2020.

«In our International businesses, we continue to develop our operations to take advantage of the long-term potential in both the US and China. Volumes are accelerating across our new sites, the demand for our products is growing and interest in our fresh prepared meal offer is gaining traction particularly with US regional retailers.

«More recently, the Coronavirus outbreak is having a significant impact on our business in China and our key priority is to safeguard the health and wellbeing of our colleagues through this challenging period. We continue to monitor the situation closely as it develops.

«Looking further ahead, we have strong foundations and the skills and expertise in place to deliver on our long-term strategy. We are confident that the strength of our business model, customer strategy and category excellence will enable us to capitalise on further growth opportunities.»

Key Statutory Financial Information

GBP million (unless otherwise stated) FY 2019 FY 2018 Change
Group revenue 1,885.9 1,857.2 1.5%
Operating profit 69.4 85.6 (18.9%)
Profit before tax 43.8 77.9 (43.8%)
Profit after tax 36.9 67.2 (45.1%)
Basic EPS 6.4p 11.6p (5.2p)