Bakkavor Group PLC: Half Year Results 2019

Reykjavik / IS. (bkg) Island’s Bakkavör Group, a leading provider of fresh prepared food, announced its half year unaudited results for the 26-week period ended 29 June 2019 on 10 September 2019 (sorry for delay).

Financial Highlights

• Group revenue up 1.4 percent to 923.0 million GBP
• Group like-for-like revenue^[1] up 2.0 percent to 877.9 million GBP
  • UK performance held in very challenging market, with 0.7 percent increase to 772.2 million GBP
  • International growth accelerated, with growth of 12.7 percent to 105.7 million GBP
• Adjusted Ebitda^[1] pre IFRS 16 down 6.5 percent to 73.5 million GBP with margins down 60bps as expected
• Operating profit impacted by 13.1 million GBP of exceptional costs and 8.3 million GBP of start-up losses for new sites
• Basic earnings per share of 3.0p and adjusted earnings per share of 5.9p
• Operational net debt increased to 356.6 million GBP following a period of planned capital investment
• Interim dividend of 2.0p per share payable on 11 October 2019

Operational Highlights

• Acquisition of Blueberry Foods strengthens market leading desserts capability
• Integration of Haydens already delivering synergy benefits
• Closure of meals site in Lincolnshire protects profitability
• UK meals business set to benefit from launch of significant business gain in H2 2019
• Production ramping up at new meals site in Texas
• Consistent strong growth in China through existing customer partnerships and innovative new customers

(GBP in million – unless otherwise stated)	H1-2019	H1-2018	Change
Group revenue	923.0	909.9	1.4%
Like-for-like revenue[1]	877.9	860.9	2.0%
Adjusted Ebitda pre IFRS 16[1]	73.5	78.6	(6.5%)
Adjusted Ebitda[1] margin pre IFRS 16	8.0%	8.6%	(60bps)
Adjusted operating profit[1]	50.7	57.3	(11.5%)
Operating profit	29.3	54.1	(45.8%)
Basic EPS	3.0 GBPence	7.0 GBPence	(4.0 GBPence)
Adjusted EPS[1]	5.9 GBPence	7.4 GBPence	(1.5 GBPence)
Free cash flow[1]	17.6	32.4	(14.8)
Net debt (excluding IFRS 16 lease liabilities)	356.6	269.8	86.8
Interim dividend per share	2 GBPence	2 GBPence	–

[1] Alternative performance measures are referred to as ‘like-for-like’, ‘adjusted’, ‘underlying’ and are applied consistently throughout this news release.

Agust Gudmundsson, Chief Executive Officer, said: «During a challenging period, I’m pleased by the resilience we’ve shown across the business to deliver a solid first half performance. While the trading environment in the UK is still uncertain, we remain positive of our long-term prospects and the demand for fresh prepared food.

«Our UK operations have never been stronger and we’re the clear market leader across all four of our core categories. I’m encouraged by developments made across our US business; improving efficiencies, streamlining our customer proposition and building sales across new sites. Our business in China continues to go from strength to strength, expanding both our customer base and product offering.

«Despite a subdued start to the second half, we currently expect an uplift in performance, boosted in the UK by the impact of new business and an easing of raw material inflation. Our International business is making further progress and therefore the Group remains confident in delivering full-year performance broadly in line with 2018.

«Looking further ahead, we believe that our strategy, combined with our scale and expertise, leaves us well placed to capitalise on future growth opportunities.»