REG - Bakkavor Group PLC - Q1 2025 Trading Update

BakkavorAnnouncement

15/05/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250515:nRSO7280Ia&default-theme=true

RNS Number : 7280I  Bakkavor Group PLC  15 May 2025

15 May 2025

Q1 2025 trading update

Strong Q1 performance; improving outlook for FY25

Bakkavor Group plc ("Bakkavor" or "the Group"), the leading international
provider of fresh prepared food ("FPF"), today updates on trading for the 13
weeks to 29 March 2025 ("Q1 25").

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

                                                               revenue
 Group         556.6                             3.9%          559.3     3.3%
 UK            471.0                             2.7%          471.0     2.7%
 US            59.2                              7.2%          59.6      8.0%
 China         26.4                              19.4%         28.7      3.6%

 

Strong Q1 25 trading performance

·      LFL revenue up 3.9%, driven by good volume growth internationally
and primarily price in the UK

·      Strong profit performance as we continue to deliver on our
strategy and focus on margin

·      Leverage(2) at 1.1x, down 0.3x year-on-year and in line with year
end, driven by profit improvement

 

Good strategic progress and upgrading guidance for FY25

·      Confidence builds given visibility on inflation recovery in the
UK and continued efficiency improvements in all three regions, leading to
upgrading guidance for full year adjusted operating profit to a new range of
£120m to £126m

·      Significant progress in simplifying China operations; Hong Kong
sale completed in March 2025 and sale of remaining mainland China business
agreed in April 2025(3) for a cash consideration of £50m (RMB c.500m)

·      Remain on track to deliver Group adjusted operating profit margin
target of 6% in FY27

 

The foregoing statement in relation to FY25 Adjusted Operating Profit (the
"Profit Forecast") constitutes an ordinary course profit forecast for the
purposes of Rule 28 of the City Code on Takeovers and Mergers (the "Takeover
Code"). The additional disclosures required by the Takeover Code are set out
in the Appendix to this announcement.

Mike Edwards, CEO commented:

"The Group delivered a strong performance in Q1 25, with excellent progress
against the strategy across all three regions. The momentum this has created
underpins our confidence in delivering both our increased guidance for FY25,
and our ambition of achieving 6% margin in FY27.

The business is in great shape and is largely down to the commitment and
energy of our colleagues, who I would like to thank for their hard work and
dedication."

 

1.     LFL revenue is revenue from continuing operations and removes the
effect of foreign currency movements. China LFL revenue excludes revenue from
the Hong Kong business, sold in March 2025, and the China Bakery business,
sold in March 2024.

2.     Leverage is the ratio of operational net debt to adjusted EBITDA.
Operational net debt is at 29 March 2025 and excludes the impact of non-cash
items on the Group's net debt. Adjusted EBITDA is the last 12 months to 29
March 2025 pre IFRS 16 and including covenant adjustments.

3.     On 29 April 2025, Bakkavor announced 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. 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.

 

 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, MHP                        +44 (0) 7884 494 112
 Rachel Farrington, MHP                 +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___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2ZDg5MjVmMDcwOGNmZDFiMWRhOGQ0YWY1ODM2OTAwMjo2OmNiYTQ6YjdkYmVlNzQ1OTI5Yjk3OGVlMTdiMDA1ODM2OThlYzU1YWE5Y2YyZDdmZGJjYzZlOTM4MDAyYTE1MmRkNzFhMjpwOlQ6Tg)
.

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.

 

 

APPENDIX

Application of Rule 28 of the Takeover Code

With the consent of Greencore Group plc to this announcement, the UK Panel on
Takeovers and Mergers has confirmed that the Profit Forecast constitutes an
ordinary course profit forecast for the purposes of Note 2(b) to Rule 28.1 of
the Takeover Code, to which the requirements of Rule 28.1(c)(i) of the
Takeover Code apply.

Directors' confirmation

The directors of Bakkavor confirm that the Profit Forecast has been properly
compiled on the basis of the assumptions set out below and that the basis of
accounting used is consistent with the Group's existing accounting policies.

Basis of preparation

The Profit Forecast has been compiled based on the Group's unaudited
management accounts for Q1 25 and has been prepared on a basis consistent with
the Group's existing accounting policies, which are consistent with
International Financial Reporting Standards.

The Profit Forecast has been compiled on the basis of the assumptions set out
below and should therefore be read in this context and construed accordingly.

Assumptions

In confirming the Profit Forecast, the directors of Bakkavor have made the
following assumptions in respect of Q1 25:

(i) Assumptions within the Company's control or influence:

·    no material change to the existing strategy or operation of the
Group's business;

·    no material change to the expected realisation of launch and
commercialisation of new products or achievement of sustainability goals;

·    no material deterioration in the Group's relationships with
customers, suppliers or partners, and no material adverse change to the
Group's ability to meet customer, supplier and partner needs and expectations
based on current practice;

·    no material unplanned capital expenditure, asset disposals, merger
and acquisition or divestment activity conducted by or affecting the Group;

·    no material change in dividend or capital policies of the Group; and

·    no material change to the present management of the Group.

(ii) Assumptions outside of the Company's control or influence:

·    no material change to existing prevailing macroeconomic, political,
fiscal/inflationary, international trade or social conditions or stability
during FY25 in the markets or regions in which the Group operates;

·    no material change in legislation, taxation or regulatory
requirements impacting the Group's operations, expenditure or its accounting
policies;

·    no material adverse change to the Group's business model or market
environment before the end of FY25 (including in relation to customer demand
or competitive environment, including regarding the Group's market share and
product demand rates);

·    no material adverse change to the Group's commercial relationships or
product service levels, and no material adverse events that will have a
significant impact on the Group's major customers or suppliers;

·    no material disruption or delays to international transport networks
or adverse changes in supply chain costs to the Group;

·    no material change in the Group's existing debt arrangements, ability
to access external finance and refinance existing debt upon maturity;

·    no material litigation, contractual dispute or regulatory
investigations, and no material unexpected developments in any existing
litigation, contractual dispute or regulatory investigation, each in relation
to any of the Group's operations, products or services;

·    no material adverse events that would have a significant impact on
the Group including climate change, adverse weather events or information
technology/cyber infrastructure disruption; and

·    there will be no material change in the control of the Group.

 

The Profit Forecast does not take into account any effects of the possible
offer for Bakkavor Group plc by Greencore Group plc.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTAIMPTMTMBBLA