REG - Bakkavor Group PLC - Sale of China Operations

BakkavorAnnouncement

Tue 07:00

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RNS Number : 5077G  Bakkavor Group PLC  29 April 2025

29 April 2025

Bakkavor Group plc

 

Bakkavor announces sale of its China operations

 

Bakkavor Group plc ("Bakkavor" or "the Group"), a leading international
provider of fresh prepared food, is pleased to announce it has entered into a
binding agreement to sell its China operations, with the sale of the entire
issued share capital of Bakkavor China Holdings Limited ("BCHL") to Lihe Xing
(Qingdao) Food Technology Co. Ltd., wholly owned by Lihoo's (Qingdao) Food
Industry Company Limited ("Lihoo's") ("the Transaction"), a company
headquartered in China.

 

Bakkavor's business in China is as a leading manufacturer of fresh prepared
food, supplying foodservice and retail customers nationally with salads,
sandwiches and meals from 7 manufacturing sites with c.2,300 colleagues. In
FY24, the business generated revenue of £105m.

 

Over the last two years, Bakkavor has made significant progress in simplifying
its operations in China and, as part of its previously stated review of its
strategic options, this sale completes the Group's exit from the region.

 

The cash consideration is RMB c.500m (c.£50m) on a cash and debt-free basis
and is expected to complete in the second half of 2025, subject to regulatory
approval. At 28 December 2024, the carrying value of net assets was £39m with
a net profit on disposal expected to be c.£15m, subject to completion
adjustments.

 

Transaction proceeds will be used to further reduce the Group's leverage and
the exit from China, historically dilutive to Group adjusted operating profit
margin, will support the delivery of the Group's medium-term margin target of
6%.

 

Mike Edwards, CEO, commented:

"Over the last 20 years, we have built a great business in China and I would
like to thank all our China colleagues for their contribution to the
significant progress we have made in recent years.  With strong foundations
in place, we are confident that going forward the business and its
stakeholders will benefit from Lihoo's local expertise and experience as a
frozen and fresh meal manufacturer.

 

We remain focussed on delivering the great service our customers are
accustomed to whilst we work towards completion."

 

 

ENQUIRIES

Institutional investors and analysts:

Lee Miley, 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
       +44 (0) 7884 494 112

Rachel
Farrington
       +44 (0) 7801 894 577

 

 

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 17,200 colleagues operate
from 40 sites across our three markets supplying a portfolio of c.3,100
products across meals, pizza & bread, salads and desserts to leading
grocery retailers in the UK and US, and international food brands in
China. Of this total, our China business comprises: 2,300 colleagues, 9 sites
(7 manufacturing sites, 1 head office, 1 farm) and c.1,100 products. Find out
more at www.bakkavor.com
(https://protect.checkpoint.com/v2/___http:/www.bakkavor.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkOWNiYmFkMTJiODBmMTllYmUzZjBmYjA4YzFlOTk3ODo2OjkzNmQ6NzZkZmEwZGQ0MWFlOWU1ZDI3ZjkzOGUxODQ3M2ZkNzU2N2NjZWY1YmNhNWQzYjI5MWZkMzcxNzFjOTJjMGY2ODpwOkY6Tg)
.

 

LEI number: 213800COL7AD54YU9949

 

Disclaimer - forward-looking statements

This statement, prepared by Bakkavor Group plc (the "Company"), may contain
forward-looking statements about the Company and its subsidiaries (the
"Group"). Forward-looking statements involve uncertainties because they relate
to events, and depend on circumstances, that will, or may, occur in the
future. If the assumptions on which the Company bases its forward-looking
statements change, actual results may differ from those expressed in such
statements. Forward-looking statements speak only as of the date they are
made, and the Company undertakes no obligation to update these forward-looking
statements other than as required by law. Nothing in this statement should be
construed as a profit forecast. Where relevant, some numbers and
period-on-period percentages have been rounded or adjusted to ensure
consistency with the financial information for the latest financial reporting
year unless otherwise stated.

 

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