Bakkavor Group PLC: Announces Q1-2023 Trading Update

Reykjavik / IS. (bkg) Island’s Bakkavör Group, the leading international provider of fresh prepared food, updates on trading for the 13 weeks to 01 April, the first quarter of the current financial year (Q1-2023).

(GBP in million) Reported revenue Growth LFL revenue LFL growth
Group 529.3 9.0 percent 522.6 7.6 percent
UK 440.3 8.1 percent 440.3 8.1 percent
US 61.2 11.1 percent 55.4 0.4 percent
China 27.8 21.4 percent 26.9 17.1 percent

Encouraging Q1-2023 trading performance in-line with expectations

  • LFL (like-for-like) revenue up 7.6 percent, driven by price as well as volume recovery in China
  • UK: Continued to win market share, driven by strong service and net business gains
  • US: Good underlying volume and price growth offset by the loss of volume from a customer
  • China: Good revenue momentum reflects positive volume recovery post-Covid
  • Continued to largely mitigate ongoing inflationary pressures through pricing, value optimisation, operational efficiency improvements and cost control actions
  • Restructuring plans on track; new leadership team embedded, synergies materialising following two UK site closures and the alignment of our UK business to two sectors

Improving outlook for FY-2023

  • UK: Further share gains, strong operational performance and price recovery expected to offset subdued underlying volumes
  • US: Renewed focus on profitability is starting to deliver in line with our expectations
  • China: Volume momentum is expected to continue to build steadily, supported by diversification into retail
  • Accelerated delivery of restructuring plans now expected to result in £17m of savings in FY-2023, ahead of previous guidance
  • With momentum expected to continue in all three regions, Group adjusted operating profit expected to be at the upper end of the range of market expectations

Chief Executive’s statement

CEO Mike Edwards: «The Group has made an encouraging start to trading in 2023 and, with momentum expected to continue in all regions, our outlook for FY-2023 is now at the upper end of market expectations. There is no doubt that the changes we have made as part of our restructuring plans are underpinning performance. I would like to thank our teams for embracing and embedding these changes so quickly. The fundamentals of our business remain strong, as we continue to win market share, demonstrate strong operational delivery and maintain a robust balance sheet. We are confident of making further progress through the remainder of this year and into 2024.»