Reykjavik / IS. (bkg) Island’s Bakkavör Group, the leading international provider of fresh prepared food, updates on trading for the 13 weeks to 30 March (Q1-2024).
Strong Q1-2024 performance
- Group LFL revenue up 3.2 percent driven predominantly by the UK
- UK: Volumes strengthened through the quarter, supported by improving consumer confidence, successful innovation, and excellent service
- US: Revenue reduced in line with expectations given the region’s focus on accelerating profit improvement
- China: With the impact of Covid now annualised, LFL growth returns to more normalised levels
- Strong profit performance driven by a return to volume growth in UK and continued focus on operational efficiency across the Group
- Leverage reduced to 1.4x underpinned by improvements in profitability and working capital
- Strong financial performance replicated in our non-financial KPIs with good progress in food waste, carbon emissions and voluntary employee turnover
Improved outlook for FY-2024
- Guidance for full year adjusted operating profit upgraded, with a new range of GBP 103m to GBP 108m
- Confidence in delivering ahead of current market expectations3 is based on:
- Further synergies and efficiencies in the UK following successful implementation of our 2023 plan, with inflation moderating and price recovery secured;
- Accelerating profit improvement in the US; and
- Stability in China, which continues to be cash generative and self-funding
- Continue to focus on reducing debt and improving leverage
- Post Q1 two strategic transactions completed:
- In April, we sold our bakery business in China, further simplifying our operations in the region, leading to a profit on disposal of c.GBP 3.5m
- In May, we acquired Moorish, a c.GBP 2m revenue brand that supplies houmous to UK retail. This complements our dips business and provides an attractive opportunity to extend the brand into a broader range of Mediterranean products
Chief Executive’s commentary
CEO Mike Edwards: «Last year we executed a dynamic plan to reset the business and I am delighted that the momentum this has created across the Group has underpinned our strong Q1 performance. All three regions are making excellent progress against the Group’s strategic priorities of rebuilding margins and reducing leverage and, as a result, we are confident in delivering our increased guidance for 2024. I’d like to thank the entire Bakkavor team, because it is their exceptional commitment and dedication that ensures we continue to deliver for our customers and shareholders.»
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