REG - Bakkavor Group PLC - Q1 2023 Trading Update

BakkavorAnnouncement

31/05/2023 07:00

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RNS Number : 0886B  Bakkavor Group PLC  31 May 2023

31 May 2023

Q1 2023 trading update

Encouraging Q1 performance; improving outlook for FY23

Bakkavor Group plc (the "Company") and its subsidiaries ("Bakkavor" or "the
Group"), the leading international provider of fresh prepared food ("FPF"),
today updates on trading for the 13 weeks to 1 April 2023 ("Q1 2023").

 £ million     Reported  Growth    Like-for-like(1) ('LFL') revenue  LFL growth

               revenue
 Group         529.3     9.0%      522.6                             7.6%
 UK            440.3     8.1%      440.3                             8.1%
 US            61.2      11.1%     55.4                              0.4%
 China         27.8      21.4%     26.9                              17.1%

 

Encouraging Q1 trading performance in-line with expectations

·      LFL revenue up 7.6%, 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 FY23

·      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 FY23, 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(2)

 

Mike Edwards, CEO, commented:

"The Group has made an encouraging start to trading in 2023 and, with momentum
expected to continue in all regions, our outlook for FY23 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."

 

 

1.     LFL revenue is revenue from continuing operations adjusted for the
revenue generated from businesses closed or sold in the current and prior
year, revenue generated from businesses acquired in the current and prior
period, and the effect of foreign currency movements.

2.     Based on company compiled consensus ("Consensus") which includes;
Citi, Goodbody, HSBC, Investec, Kepler, Numis and Peel Hunt, Adjusted
operating profit Consensus for 2023 of £82.9m, with a range of £80.0m to
£85.0m.

 

ENQUIRIES

Institutional investors and analysts:

Ben Waldron, Chief Financial Officer

Emily Daw, Head of Investor
Relations
+44(0)20 7908 6114

Financial media: bakkavor@mhpgroup.com (mailto:bakkavor@mhpgroup.com)

Katie Hunt, MHP
 
+44(0)20 3128 8794

Rachel Farrington, MHP
 
+44(0)20 3128 8613

Oliver Hughes, MHP
 
+44(0)20 3128 8622

 

About Bakkavor

We are the leading provider of fresh prepared food in the UK, and our presence
in the US and China positions the Group well in these, high-growth markets. We
leverage our consumer insight and scale to provide innovative food that offers
quality, choice, convenience, and freshness. Around 18,500 colleagues operate
from 44 sites across our three markets supplying a portfolio of over 2,900
products across meals, pizza & bread, salads and desserts to leading
grocery retailers in the UK and US, and international food brands in China.

LEI number: 213800COL7AD54YU9949

Disclaimer - forward-looking statements

This statement includes forward-looking statements. By their nature,
forward-looking statements involve risk, uncertainty and other factors, which
may cause the actual results and developments of the Group to differ
materially from any results and developments expressed or implied by such
forward-looking statements. You should not place undue reliance on any
forward-looking statements. These forward-looking statements are made as of
the date of this statement. The Group is under no obligation to publicly
update or review these forward-looking statements other than as required by
law.

 

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