REG - Bakkavor Group PLC - Half-year Report
Wed 07:00
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RNS Number : 7308X Bakkavor Group PLC 03 September 2025
3 September 2025
Bakkavor Group plc
Further upgrade to FY25 guidance: clear strategy underpins strong H1 25 and
further improvement in H2 25
Bakkavor Group plc ("Bakkavor" or "the Group"), the leading international
provider of fresh prepared food ("FPF"), today announces its unaudited results
for the 26-week period ended 28 June 2025 ("H1 25").
FINANCIAL HIGHLIGHTS
£m (unless otherwise stated) H1 25 H1 24 Change
Re-presented(1)
Continuing operations(1)
Reported revenue 1,076.3 1,066.8 0.9%
Like-for-like ("LFL") revenue(2) 1,079.3 1,066.8 1.2%
Adjusted operating profit(2) 61.5 56.0 9.8%
Adjusted operating profit margin(2) 5.7% 5.2% 50bps
Operating profit 37.5 55.4 (32.3%)
ROIC(2) 11.2% 9.3% 190bps
Discontinued operations(1)
Reported revenue 58.3 54.4 7.2%
Adjusted operating profit/(loss)(2) 0.5 (1.0) 150%
Adjusted operating profit/(loss) margin(2) 0.9% (1.8%) 270bps
Operating profit 1.2 3.4 (64.7%)
Group
Adjusted earnings per share(2) 6.4p 5.5p 0.9p
Basic earnings per share 2.9p 6.1p (3.2p)
Free cash flow(2) 47.3 53.2 (5.9)
Operational net debt(2) 194.8 201.8 (7.0)
Leverage(2) 1.1x 1.2x (0.1x)
Strong H1 25 performance and upgraded FY25 profit guidance
· Continuing operations (UK and US):
o LFL revenue up 1.2%, driven by strong US volume growth and price in the UK
o Adjusted operating profit up 9.8% to £61.5m and margin up 50 basis points
to 5.7%
o Operating profit of £37.5m includes £24.0m of exceptional costs,
including Greencore Group plc ('Greencore') transaction costs
o ROIC of 11.2% up 190bps as we drive enhanced returns
· Successful exit from China for £51m in July 2025, presented as a
discontinued operation in H1 25
· Leverage down 0.1x to 1.1x, remaining at the lower end of target
range (prior to receipt of proceeds from China sale, which equates to 0.3x
impact on leverage)
· FY25 guidance upgraded with adjusted operating profit (continuing
operations) now expected towards the upper end of previously guided range(3)
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.
Excellent strategic progress, accelerated delivery of 6% margin target, one
year ahead of plan
· UK: Strategy continues to drive margin improvement, with volume
impact in line with expectations
· INTERNATIONAL: US margin now accretive to the Group; strategic exit
from China complete
· EXCELLENCE: Bakkavor Operating System continues to drive efficiency
improvements in all regions
· TRUST: Progressive KPIs across people and ESG priorities
· Accelerated delivery of 6% adjusted operating profit margin target to
FY26, one year ahead of plan
Acquisition of Bakkavor by Greencore
· As announced on 15 May 2025, the Boards of Bakkavor and Greencore
agreed the terms of a recommended acquisition of Bakkavor
· The transaction was approved by shareholders in both companies in
early July
· In the process of obtaining regulatory approvals; the Competition and
Markets Authority announced the launch of its merger inquiry on 1 September
2025 and has a deadline of 27 October 2025 for its Phase 1 decision
Mike Edwards, CEO, commented:
"The first half of 2025 has seen another strong performance by the Group as we
continued to move at pace delivering on our strategy and driving further
margin improvement.
"The business is in great shape, with momentum expected to continue in the
second half and we now expect to deliver towards the upper end of our
previously guided FY25 profit range. Looking further ahead, we have
accelerated the delivery of our medium-term margin target of 6% to FY26, one
year ahead of plan.
"I am proud of what we have achieved and would like to thank the entire
Bakkavor team for their commitment and exceptional efforts which have
delivered such a great performance, while also working towards a significant
change in the Group's ownership."
1. The Group's continuing operations exclude the results of the China
business, which was sold on 11 July 2025, and the Hong Kong business sold on
14 March 2025, and therefore reflects the Group's remaining business in the UK
and US. The relevant prior year data has been re-presented accordingly. The
results of the China region in the period are presented as a discontinued
operation. Further detail is provided in Note 18.
2. Alternative performance measures are referred to as
'like-for-like', 'adjusted', 'underlying' and are applied consistently
throughout this document. These are defined in full and reconciled to the
reported statutory measures in Note 22.
3. FY25 adjusted operating profit (continuing operations) guidance
range of £120m to £126m. This range is in line with previous guidance, per
Q1 2025 trading update published on 15 May 2025, as whilst the China
operations has subsequently been disposed of and therefore is excluded from
FY25 guidance being issued in the H1 25 results, the expected FY25 profit
impact from China was limited. For reference, company compiled consensus as at
2 September 2025, (includes covering, non-restricted analysts - Investec,
Kepler, RBC) for FY25 adjusted operating profit on a continuing operations
basis is £120.7m, with a range of £120.0m to £121.3m.
Presentation
A copy of these results is available on Bakkavor's website: Bakkavor Group plc
- EN - Investors - Results & presentations
(https://protect.checkpoint.com/v2/r06/___https:/www.bakkavor.com/jsdnsAjxytwxdwjxzqyx-fsi-uwjxjsyfyntsxdijkfzqy.fxuC___.ZXV3MjpuZXh0MTU6YzpvOmJlY2ZmZjNiNWZhZmY1NWZlOTlmZWE4ODY1NGY3NTA4Ojc6MjM3Mzo3ZTdiNzcwNTljMWRmZTFjZTZiOGFmYTYwMTJhMzFlY2QyMDBkZDE0OWYzYjdkYWQ2Y2YyZGQyYzliNmI5ZmIzOnA6RjpU)
. Mike Edwards, CEO, and Lee Miley, CFO, will be presenting to analysts
in-person and via a webcast at 10.00am BST on 3 September 2025, with the
webcast link available in the Investor section of the Group's website at:
https://brrmedia.news/BAKK_HY25
(https://protect.checkpoint.com/v2/r06/___https:/brrmedia.news/GFPP_M37/___.ZXV3MjpuZXh0MTU6YzpvOmJlY2ZmZjNiNWZhZmY1NWZlOTlmZWE4ODY1NGY3NTA4Ojc6M2UzNTo2ZDI4NTQzMThlODEyOTYxYzg5ZmE5MjE1Y2I5YWJkNGE1N2VkYzVhYzU2Y2YxOTY3MTc3ZDJiOTFkZmYzOThiOnA6RjpU)
. A recording of the presentation will be available on the Company's website
later in the day.
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 positions the Group well in this high-growth
market. We leverage our consumer insight and scale to provide innovative food
that offers quality, choice, convenience, and freshness. Around 14,900
colleagues operate from 31 sites in our two markets supplying a portfolio of
c.2,000 products across meals, pizza & bread, salads and desserts to
leading grocery retailers in the UK and US. Find out more at www.bakkavor.com
(https://protect.checkpoint.com/v2/r06/___http:/www.bakkavor.com___.ZXV3MjpuZXh0MTU6YzpvOmJlY2ZmZjNiNWZhZmY1NWZlOTlmZWE4ODY1NGY3NTA4Ojc6OWQwZjowZDkzYTdkM2VhNDg0ZGUyNzRmMWZkOWNiMWMzNGE4ZTA5OWUwZTlhYmY1YmU1NmVmNWNiZjI2ZTRhOTU1Y2I5OnA6RjpU)
.
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 period unless otherwise stated.
CHIEF EXECUTIVE'S OVERVIEW
Excellent strategic progress underpins strong margin improvement
The Group delivered another strong performance in the first half as we have
continued to make excellent progress against all four pillars of our strategy:
1. UK: Drive returns by leveraging scale and market leadership.
2. INTERNATIONAL: Drive sustainable growth and Group accretive margin.
3. EXCELLENCE: Improve performance through operational excellence.
4. TRUST: Be a positive force and a trusted partner for all our
stakeholders.
As expected, reported revenue in continuing operations was up 0.9% to
£1,076.3m, driven by strong US volume growth and price in the UK, partially
offset by the planned impact on volume related to the closure of our UK Wigan
site. Adjusted operating profit for continuing operations was up 9.8% to
£61.5m and margin was up 50 basis points to 5.7%. This continued progress and
acceleration in margin delivery has driven increased confidence in our ability
to deliver our medium-term margin target of 6% one year ahead of plan in FY26
(versus FY27 previously communicated). Cash generation also remained strong,
with operational net debt down £7.0m on June 2024 and leverage down 0.1x to
1.1x at the lower end of our target range. This is before the receipt of
c.£50m proceeds from the sale of our China business (completed July 2025),
which equates to c.0.3x leverage impact.
Overall, the business is in great shape and has continued to move at pace to
deliver on our strategy. I am proud of what we have achieved and would like to
thank the entire Bakkavor team for their commitment and exceptional efforts
which have delivered such a great performance.
1. UK: Strategy continues to drive margin improvement, with volume impact
in line with expectations
Our UK business delivered a strong performance in the first half. We have
continued to deliver on our strategic initiatives to drive margin improvement,
with adjusted operating profit margin up 20 basis points to 5.7%.
Despite subdued consumer confidence in the first half, consumers have largely
adapted to ongoing pressure on household budgets and demand for convenient,
quality and value meal solutions has only increased. The fresh prepared food
("FPF") offer is resonating strongly with consumers desires, and the FPF
market delivered the strongest level of volume growth since 2020, up 4.4% on
last year, and well ahead of the wider grocery market (up 0.4%). Consumers are
favouring eating at home as they have continued to go out less often, which
has supported strong growth in more premium ranges and meal deals. Retailers
have also increased their focus on core innovation to ensure their ranges
maintain and grow their share of stomach. Shopping frequency, a key driver of
growth in the FPF market, also saw strong growth as shoppers conducted more
frequent, smaller trips to stores.
At a FPF category level, salads performed strongly with demand for variety,
health and value in lunchtime options driving growth in food-to-go, and sales
were also boosted by sunnier weather. Demand for elevated at-home dining
experiences benefited the meals category, along with new product development.
Desserts remain discretionary and ongoing inflation, notably in dairy, has
continued to put upward pressure on prices and impacted volumes. Pizza and
bread experienced good growth, driven by promotional activity and more premium
and takeaway offers benefitting from lower demand for eating out.
In terms of our own performance, we delivered strong progress on adjusted
operating profit and margin despite volume being down (-2.0%). Volume was in
line with plan as we executed on our strategy to exit low margin business,
including the closure of a UK site. Our strategic closure of Wigan saw the
exit of a large proportion of the c.£80m annualised sales, which particularly
impacted volumes in meals and salads. When compared to the overall FPF market,
our category mix also had some impact on volume driven by desserts, due to
price pressure from ongoing inflation and being a more discretionary purchase.
Price contributed meaningfully to our overall revenue growth, up 2.4%, with
support secured from our customers on inflation recovery.
Our relentless focus on providing our customers with best-in-class quality,
service and innovation has continued. Our technical KPIs across people
safety and food safety were progressive, and we delivered over 99% customer
service, which included the seamless delivery through the closure of our Wigan
site. We launched over 450 new exciting products responding to the latest
consumer trends, comprising 27% of our total product range. This included 18
new cheesecakes as part of a desserts category reset (commenced in 2024) and
has resulted in a strategic customer gaining market share. Supporting our
customers to deliver a great summer has also been a focus, and included a
double filled lemon éclair and modern deli products as part of sharing snacks
and plates ranges. We have also continued to improve our quality through
recipe and process development, with relaunched ranges of top-tier wraps and
pizza, houmous, and premium breads all performing strongly.
Operationally, we have continued to drive efficiencies across our business and
build on the strong momentum with which we exited 2024 to deliver further
margin improvement. The Bakkavor Operating System ("BOS") has continued to
underpin strong factory performance and overhead savings from the closure of
Wigan are delivering in line with plan.
2. INTERNATIONAL: US margin now accretive to the Group and strategic exit
from China complete
Building on the positive momentum achieved in 2024, our US business grew
strongly in the first half, with LFL revenue up 7.6% year-on-year all driven
by volume. This growth has been fuelled by successful new product launches and
good underlying growth with strategic customers, alongside broadening our
'Fresh & Simple' branded product range which now includes fresh meals,
burritos and artisan bread.
Sustained momentum in operational efficiencies has continued to enhance
adjusted operating profit and margin, up 260 basis points to 5.9%, now
delivering on our strategic objective to be accretive to the Group. Through
2024, we started to embed our BOS principles across our US sites, and the
implementation of our smart manufacturing system in Texas in summer 2024 has
driven further labour efficiencies. Our footprint rationalisation, with the
closure of Jessup and transfer of volume to our Charlotte site, has also
driven an improvement in factory performance and delivered overhead savings.
These actions, combined with the successful conversion and seamless onboarding
of volume growth, has supported the strong progress seen in the US.
The Group has achieved its strategic objective of successfully exiting its
margin dilutive China business. The disposal of the Hong Kong business
completed in March 2025, and the sale of the remaining China operations
completed in July 2025 for a net consideration of £51m with a net profit on
disposal (after tax) of at least £18m. This takes total proceeds from
disposals in the region over the last two years to c.£65m, contributing
positively to our overall financial position and will reduce leverage further
in the second half. The exit from the region enables us to sharpen our focus
on our core business and reduces the risk profile of the Group.
3. EXCELLENCE: Bakkavor Operating System continues to drive efficiency
improvements in all regions
Building on two strong years of progress, the Bakkavor Operating System
("BOS") and its key principles of standardisation, people and optimisation,
has fuelled further efficiencies which have been fundamental in driving the
Group's H1 25 margin improvement.
In our UK manufacturing operations, performance reporting and behaviours are
well-embedded and standardised. With these strong foundations, we are now
starting to leverage our core principles to drive wider 'business excellence',
and in the first half our UK commercial team adopted our BOS behaviours in
their approach to driving value optimisation for our customers. We have also
embedded our standardised performance reporting and data driven insight to
waste management, which whilst helping drive efficiencies, is also supporting
our sustainability agenda, with 40 live projects targeting food waste
reduction.
To ensure ways of working are standardised and colleagues are equipped to
drive further improvements upskilling and training our people has remained a
priority. The Operational Excellence Academy, launched in 2024, saw c.4,300
training sessions completed by more than 750 operational colleagues in H1 25,
and we now have operational excellence teams in place at all UK and US sites,
with well-established business partnering and standardised performance
reporting.
Our commitment to optimise performance and drive continuous improvement saw
multiple projects contribute to the Group's strong performance. For example,
the automation of our stuffed crust pizza process has improved quality and
reduced labour, and overhead savings from our strategic decision to close our
UK Wigan site and US Jessup site are delivering in line with plan. We
continued to enhance our UK performance management structure through the
introduction of an improved Management Control and Report Process. In the
US, the implementation of our smart manufacturing system - in San Antonio last
summer, in Carson in Q2 2025, and due to go live in Charlotte in Q1 2026 - is
helping fuel our future activity pipeline, and we remain excited about the
significant opportunity this provides to optimise performance further.
We have continued to leverage our approach to excellence in our supply chain.
Our scale and resilience, has once again, ensured we delivered excellent
service for our customers while navigating ongoing supply chain disruption and
inflationary pressures.
4. TRUST: Progressive KPIs across people and ESG priorities
Our people remain central to our business and our continued investment in pay
and wider benefits reflects this commitment. 2025 pay negotiations at all our
sites concluded by June 2025, reflecting the strength of offer for our
colleagues. In the UK, weekly colleagues have received an average pay increase
of 29.8% over the last four years, compared with 25.1% CPI inflation over the
same period. UK employee turnover has also improved by 360 basis points on
last year to 18.5%, (12m Jun-24: 22.1%) and is ahead of the year end (FY24:
18.9%), and we drove a significant reduction in the US with turnover down by
over 10 percentage points (12m Jun-25: 27.3%, 12m Jun-24: 38.0%).
We believe we have the best people in the industry and our commitment to
developing our future talent was once again recognised by 'TheJobCrowd', being
ranked the top company in Consumer Goods & FMCG for both our Graduate and
Apprenticeship programmes. We are also proud to now be able to offer every
leader in the business, from the factory floor through to senior management,
the opportunity to participate in a leadership development programme. The
positive steps we have taken to embed wellness across the business have been
recognised externally, with the Group receiving a 'Tier 3' rating in the 2025
CCLA Corporate Mental Health Benchmark UK 100 Report. Whilst we will always
strive for zero harm, we have continued to outperform the food industry
benchmark for accidents at work. In the UK, accidents (>7 day lost-time per
100k employees 12m Jun-25) reduced by 7.6% on last year.
We have made good progress in operationalising our sustainability priorities
across the Group, driving increased ownership and oversight. UK food waste
reduced by 80 basis points to 5.4% (H1 24: 6.2%), as sites have focused on
tackling root causes of waste and maximising surplus redistribution. Our staff
shop continues to be successful with c.£1m of savings on meals, versus high
street prices, provided to our colleagues in the first half. Group net carbon
emissions decreased 9.5% year-on-year (12m Jun-25), driven by a reduction in
energy usage in the UK and the closure of Wigan, fewer F-gas leaks in the US,
and China benefitted from the sale of our China Bakery and Hong Kong
businesses (completed in Mar-24 and Mar-25 respectively). On a continuing
basis, excluding the impact of the China region, emissions were down 7.7% (12m
Jun-25). The strong progress to date means we are ahead of our glidepath to
deliver on our commitment to reduce net emissions by 42% by 2030.
OUTLOOK: FY25 guidance upgraded and accelerated delivery of 6% margin target
to FY26
As we carry strong momentum from H1 25, trading through the summer has been in
line with expectations. The business is in great shape and we remain confident
in driving further margin improvement and delivering our upgraded profit
guidance for the full year.
With the successful completion of the sale of our China business in July 2025,
the results of China are excluded from our guidance for FY25. As previously
guided, FY25 revenue (continuing operations) is expected to be broadly in line
with FY24, with UK underlying growth and price largely offset by the
annualisation of the impact of our UK site closure. In the US, with our
innovation pipeline in full flight and underlying core growth expected to
remain strong, we have started to exit certain legacy business and therefore
anticipate low single digit growth for the full year. FY25 adjusted operating
profit (continuing operations) is expected to be towards the upper end of our
previously guided range (£120m to £126m) as we deliver further strategic
progress in both the UK and US.
On inflation, we expect a c.£65m impact in FY25 with certain key commodities
driving the increase versus the £50m previously guided to but overall remains
weighted to labour given the increases in National Insurance contributions
(c.£15m annualised impact) and the National Living Wage. We have good
visibility on inflation recovery with the support of our customers and,
combined with our continued focus on cost and significant pipeline of
efficiency opportunities, is expected to offset any shortfall in recovery.
The Group's balance sheet remains strong and continued strong cash generation,
along with proceeds from the sale of our China business, is expected to drive
further improvement to leverage below the bottom end of our target range (1.0x
- 2.0x). The Group is well-positioned to continue to make return-enhancing
investments to drive further efficiencies.
Looking further ahead, with the momentum we have created to drive margin
improvement through executing on all four pillars of our strategy, this gives
us confidence we will deliver our medium-term adjusted operating profit margin
target of 6% one year ahead of plan in FY26 (versus FY27 as previously
communicated).
We will also continue to drive action to deliver on our medium-term
sustainability targets, and by ensuring trust is kept at the core of our
business activities we strive to maintain an engaged, safe and thriving
workforce.
FINANCIAL REVIEW
The Group completed the disposal of its operations in China on 11 July 2025.
The results of this business have been presented as a discontinued operations
in the Group Financial Statements in H1 25 and the H1 24 comparatives have
been re-presented on the same basis.
Continuing operations - UK and US
Regional trading performance
H1 25 H1 24
re-presented
£m (unless otherwise stated) UK US Total UK US Total
Reported revenue 961.6 114.7 1,076.3 957.4 109.4 1,066.8
Change 0.4% 4.8% 0.9%
Like-for-like revenue(2) 961.6 117.7 1,079.3 957.4 109.4 1,066.8
Change 0.4% 7.6% 1.2%
Adjusted operating profit(2) 54.7 6.8 61.5 52.4 3.6 56.0
Change 4.4% 88.9% 9.8%
Adjusted operating margin(2) 5.7% 5.9% 5.7% 5.5% 3.3% 5.2%
Change 20bps 260bps 50bps
Operating profit/(loss) 40.0 (2.5) 37.5 52.4 3.0 55.4
Change (23.7%) (183.3%) (32.3%)
Operating profit / (loss) margin 4.2% (2.2%) 3.5% 5.5% 2.7% 5.2%
Change (130bps) (490bps) (170bps)
Note: Comparative information for H1 24 has been re-presented to remove China
discontinued operations.
Reported revenue (continuing operations) increased 0.9% to £1,076.3m (H1 24:
£1,066.8m). LFL revenue grew by 1.2% to £1,079.3m (H1 24: £1,066.8m), which
is adjusted for the impact of impact of currency movements, only applicable to
the US. LFL revenue growth was driven by strong volume growth in the US (up
7.6%) and price in the UK (up 2.4%), reflecting good support from our
customers as inflationary pressures have persisted (UK £30.8m of total
£34.2m inflation in H1 25), while our strategic decision to exit our Wigan
site was the key driver of UK volumes being down 2.0% in the period.
Adjusted operating profit (continuing operations) increased by £5.5m to
£61.5m (H1 24: £56.0m), with the benefit of US volume growth and our focus
on efficiency improvements in both the UK and US driving a 50 basis point
improvement to adjusted operating profit margin of 5.7% (H1 24: 5.2%).
Operating profit (continuing operations) of £37.5m was down £17.9m (H1 24:
£55.4m) and margin of 3.5% was down 170 basis points (H1 24: 5.2%). This is
due to the impact of £24.0m of exceptional costs (H1 24: £0.6m exceptional
costs) excluded from adjusted operating profit, primarily related to
transaction costs associated with the acquisition of Bakkavor by Greencore,
the costs of closure of our US Jessup site and spend on the UK ERP replacement
project (in line with our expectations).
Finance costs
Profit before tax (continuing operations) of £24.6m (H1 24: £41.8m), is
after finance costs (net) of £12.6m (H1 24: £13.9m). The reduction in
finance costs was driven by benefit of the margin reduction secured as part of
the refinancing completed in July 2024, lower average debt levels, and lower
base rate. The Group has £130m of interest rate swaps at an average rate of
3.73%, which remain in place until March 2026. For FY25, we expect finance
costs to reduce year-on-year to c.£20m (excluding IFRS 16), as we maintain
lower debt levels and benefit from the proceeds from the sale of our China
business.
Tax
The tax charge (continuing operations) for H1 25 was £9.3m (H1 24: £9.7m),
representing an effective tax rate of 37.8% (H1 24: 23.2%), higher than last
year largely due to the impact of certain non-deductible exceptional costs.
The underlying effective tax rate, which excludes exceptionals, was 25.7% (H1
24: 23.3%). The increase in underlying effective tax rate year-on-year is due
to the non-recurrence of one-off benefits (additional losses brought forward)
in the prior year. In line with previous guidance, we expect the FY25
underlying effective tax rate to remain at c.26%, marginally above the UK
corporation tax rate.
ROIC
ROIC (continuing operations) improved significantly, up 190 basis points to
11.2% (H1 24: 9.3%), reflecting the Group's improved profitability and lower
average invested capital, following two years of controlled capital spend,
along with rationalising our UK footprint. We have continued to see returns
from our investment in productivity and capacity materialise, as evidenced in
the strong efficiencies that have supported the step-up in profitability in
the year.
Discontinued operations - China
China performance
£m (unless otherwise stated) H1 25 H1 24 Change
Reported revenue 58.3 54.4 7.2%
Like-for-like revenue(2) 57.7 45.8 25.9%
Adjusted operating profit/(loss)(2) 0.5 (1.0) 150%
Adjusted operating margin(2) 0.9% (1.8%) 270bps
Operating profit 1.2 3.4 (64.7%)
Operating margin 2.1% 6.3% (420bps)
Finance costs - - -
Tax charge (0.1) (0.3) 0.2
On 29 April 2025, the Group entered a binding agreement to sell its China
operations and the sale completed on 11 July 2025, which concluded the Group's
exit from the region. At 28 June 2025, the carrying value of our China
operations net assets was £30.7m and will result in a net profit on disposal
(after tax) of at least £18m in H2 25. Net transaction proceeds (net of fees)
of £51m, less c.£3m cash held on disposal, will be used to further reduce
the Group's leverage. Results of the China business are presented as a
discontinued operations in the Financial Statements. More details are set out
in Note 18.
In the first half of the year, LFL revenue in China was up 25.9% to £57.7m
(H1 24: £45.8m), driven by volume in retail and strong growth with a new
foodservice customer acquired in 2024. Reported revenue was up 7.2% to £58.3m
(H1 24: £54.4m), which includes the Hong Kong business up to its disposal at
the beginning of March 2025, and the impact of currency movements, and the
prior period includes the China bakery business up to its disposal in March
2024.
Adjusted operating profit of £0.5m, compared to a £1.0m loss in H1 24, as
volume converted positively and our lean manufacturing initiatives delivered
further efficiencies. Operating profit of £1.2m (H1 24: £3.4m) includes
£0.7m of exceptional income (H1 24: £4.4m net income), reflecting the
benefit on the release of the liabilities held for sale of our Hong Kong
business.
Group
Exceptional items
In H1 25, the Group incurred a net exceptional charge before tax of £23.3m,
of which £24.0m net charge related to continuing operations and £0.7m net
income in discontinued operations, with a breakdown provided in the table
below. Note, the net profit on disposal from our China operations, which
completed on 11 July 2025, will be recognised in H2 25 and is therefore not
included in the numbers presented below. Further detail is provided in Note 4
of the accounts.
£m H1 25 H1 24
Continuing operations:
UK: Greencore transaction costs (11.0) -
UK: ERP transformation costs (3.7) -
US: site closure and impairments (9.3) (0.6)
Total exceptional items included in operating profit (24.0) (0.6)
Exceptional finance costs - (0.6)
Total exceptional items (before tax) (24.0) (1.2)
Tax on exceptional items 3.2 0.3
Total exceptional items (after tax) (20.8) (0.9)
Discontinued operations:
China: Net profit on disposal (H1 25: Hong Kong, H1 24: China Bakery) 0.7 4.4
Tax on exceptional items - (0.3)
Total exceptional items (after tax) 0.7 4.1
Earnings per share ("EPS")
Adjusted EPS increased by 0.9p to 6.4p (H1 24: 5.5p), driven by the strong
improvement in trading performance and decrease in finance costs, partially
offset by higher tax costs. Basic EPS decreased by 3.2p to 2.9p (H1 24: 6.1p),
driven by the above factors, offset by exceptional costs which are excluded
from adjusted EPS.
Cash flow and net debt
Free cash generation continued to be strong, with a £47.3m inflow in H1 25
(H1 24: £53.2m), primarily driven by the improvement in operating profit,
partially offset by a small working capital outflow and an increase in capital
spend on last year. Capital expenditure in H1 25 of £21.1m was up £6.5m (H1
24: £14.6m) driven largely by the timing of spend and includes £1.7m related
to the replacement of our legacy UK ERP system.
Continued strong cash generation has enabled a further £7.0m reduction in
operational net debt to £194.8m (H1 24: £201.8m) and up £1.0m compared to
the year-end (Dec-24: £193.8m). Leverage, the ratio of operational net debt
to adjusted EBITDA, improved by 0.1x to 1.1x (versus June 2024) and is in line
with the year end, and remains at the lower end of the Group's target range of
1.0x to 2.0x.
For FY25, we expect capital spend to be c.£65m, c.£5m lower than previously
guided to due to the sale of our China operations and a re-phasing of certain
UK spend into 2026. Our spend in relation to the UK ERP transformation remains
unchanged, with c.£7m of capital spend in FY25 and c.£8m to be expensed and
treated as an exceptional cost (with £3.7m incurred in H1 25).
By the year end, we expect to reduce debt further and bring leverage below the
bottom end of our target range (1.0x to 2.0x), driven by the net proceeds from
the sale of our China business, remaining in the Group, which has c.0.3x
impact on leverage, combined with the expected improvement in trading.
Cash flow and net debt (continued)
£m H1 25 H1 24
Operating profit - continuing operations 37.5 55.4
Operating profit - discontinued operations 1.2 3.4
Exceptional items (before tax) 23.3 (3.8)
Adjusted operating profit 62.0 55.0
Depreciation, amortisation & other 36.5 35.1
Net working capital (excl. exceptional items) (4.6) 3.5
Purchases of property, plant and equipment (net) & intangible assets (21.1) (14.6)
Net interest and tax paid (18.2) (19.1)
Net retirement benefits charge less contributions (0.5) (1.1)
IFRS 16 lease payments (6.8) (5.6)
Free cash flow 47.3 53.2
Dividend
During the period, the Group paid £27.6m in respect of the final dividend for
FY24.
In relation to the acquisition of Bakkavor by Greencore, under the terms of
the Co-operation Agreement (published on 15 May 2025), Greencore and Bakkavor
have agreed that if completion does not occur on or before 31 January 2026,
Bakkavor will be entitled to declare and pay an interim dividend in respect of
the 26-week period ending 28 June 2025 of an amount equal to no more than 75%
of Bakkavor's adjusted EPS, subject further to a cap of 3.20 pence per
Bakkavor share (H1 24: 3.20 pence).
A further dividend in respect of FY25 may also be declared and paid, which,
when aggregated with the interim dividend (if any) in respect of the 26-week
period ending 28 June 2025, is equal to no more than 75% of Bakkavor's
adjusted EPS, subject to a further cap of 5.20 pence per Bakkavor share
provided that the declaration of such dividend is in line with Bakkavor's
ordinary course dividend timetable. If completion does not occur on or before
31 July 2026, Bakkavor will be entitled to declare and pay an additional
interim dividend in respect of the 26-week period ending 27 June 2026 of an
amount equal to no more than 75% of Bakkavor's adjusted EPS, subject to a cap
of 3.53 pence per Bakkavor share, provided that the declaration of such
dividend is in line with Bakkavor's ordinary course dividend timetable. A
further condition in respect of all such dividends is that they are declared
and paid, with the record date for such dividend being, prior to completion.
Pensions
Under the IAS 19 valuation principles, at 28 June 2025 the Group recognised a
surplus of £22.9m for the UK defined benefit scheme (28 December 2024:
£18.8m surplus). This increase is mainly due to a decrease in the market
expectations for inflation, and the Schemes investment return was slightly
above that expected over the period. The Group and the Trustees agreed the
triennial valuation of the UK defined benefit pension scheme as at 31 March
2022 in May 2023, resulting in the Group agreeing to make recovery payments of
£2.5m per annum through to 31 March 2025. As the scheme was in surplus at
December 2024 and January 2025, final deficit contributions in H1 25 were
£0.6m and were paid over a recovery period ending on 31 March 2025.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out on pages 66
to 74 of the 2024 Annual Report and Accounts, published on 4 March 2025. The
principal risks themselves remain unchanged as at 28 June 2025. Developments
through the first half of the year have, however, resulted in the risk profile
of four of our principal risks changing, as outlined in the table below:
Principal risks and uncertainties (continued)
Principal risk Severity Description
(likelihood x impact)
Strategic growth and change programmes ↑ The strategic decision to accept Greencore's offer to buy Bakkavor increases
our risk profile as we navigate through the acquisition and legalities of the
deal. However, partially offsetting this increase in risk is the completion of
strategic review of our China business, with the sale of our China operations
in July 2025 which concludes our exit from the region.
Availability, recruitment & retention of colleagues ↓ The early conclusion of 2025 pay negotiations in June 2025 reduces the
likelihood of further industrial action or strikes within the year.
Disruption to operations ↓ Our strong factory performance in H1 25, supported by the cessation of
industrial action at one of our UK sites in March 2025, the completion of site
closures in the UK and US, and the positive early conclusion of 2025 UK pay
negotiations in June 2025, have reduced the potential for disruption to
operations.
Corporate and regulatory ↓ The resolution of industrial action at one of our UK sites in March 2025,
related to our 2024 pay negotiations, has reduced the likelihood of potential
legal disputes.
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 H1 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 H1 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 offer for
Bakkavor Group plc by Greencore Group plc.
Condensed Consolidated Income Statement
26 weeks ended 28 June 2025 (Unaudited) 26 weeks ended 29 June 2024
(Unaudited)
Re-presented(1)
£m Note Underlying activities Exceptional items(2) Total Underlying activities Exceptional Total
items(2)
(Note 4)
(Note 4)
Continuing operations
Revenue 3 1,076.3 - 1,076.3 1,066.8 - 1,066.8
Cost of sales (767.2) - (767.2) (766.3) - (766.3)
Gross profit 309.1 - 309.1 300.5 - 300.5
Distribution costs (38.5) - (38.5) (41.4) - (41.4)
Other administrative costs (209.1) (24.0) (233.1) (203.1) (0.6) (203.7)
Operating profit 61.5 (24.0) 37.5 56.0 (0.6) 55.4
Finance costs, net 5 (12.6) - (12.6) (13.3) (0.6) (13.9)
Other (losses) and gains 6 (0.3) - (0.3) 0.3 - 0.3
Profit before tax 48.6 (24.0) 24.6 43.0 (1.2) 41.8
Tax 7 (12.5) 3.2 (9.3) (10.0) 0.3 (9.7)
Profit from continuing operations 36.1 (20.8) 15.3 33.0 (0.9) 32.1
Profit/(loss) from discontinued operations 18 0.8 0.7 1.5 (1.0) 4.1 3.1
Profit for the period 36.9 (20.1) 16.8 32.0 3.2 35.2
Earnings per share for profit for the period
Basic 8 2.9p 6.1p
Diluted 8 2.8p 6.0p
(1) Comparative information has been re-presented due to a discontinued
operation. See Note 18.
(2) The Group presents its Condensed Consolidated Income Statement with three
columns. The Directors consider that the underlying activities are more
representative of the ongoing operations and key metrics of the Group. Details
of exceptional items can be found in Note 4 and include material items that
are non-recurring, significant in nature and are important to users in
understanding the business, including restructuring, transaction and ERP
transformation costs, and impairment of assets. In addition, the Group uses
further Alternative Performance Measures which can be found in Note 22.
Condensed Consolidated Statement of Comprehensive Income
£m 26 weeks ended 26 weeks ended
28 June 2025 (Unaudited) 29 June 2024
(Unaudited)
Re-presented(1)
Profit for the period 16.8 35.2
Other comprehensive income/(expense)
Items that will not be reclassified to the income statement:
Actuarial gain on defined benefit pension schemes 3.6 5.6
Tax relating to components of other comprehensive income (0.9) (1.4)
Items that may be reclassified to the income statement:
Exchange differences on translation of continuing foreign operations (11.1) 0.6
Exchange differences on translation of discontinued foreign operations (2.8) 0.2
Gain on cash flow hedges 0.9 2.3
Hedging losses reclassified to profit or loss (0.4) (2.0)
Tax relating to components of other comprehensive (expense)/income (0.4) 0.5
Total other comprehensive (expense)/income net of tax (11.1) 5.8
Total comprehensive income 5.7 41.0
Total comprehensive income for the period attributable to owners of the Group
from:
Continuing operations 7.0 37.7
Discontinued operations (Note 18) (1.3) 3.3
5.7 41.0
(1) Comparative information has been re-presented due to a discontinued
operation. See Note 18.
Condensed Consolidated Statement of Financial Position
£m Note 28 June 2025 28 December 2024 (Audited)
(Unaudited)
Non-current assets
Goodwill 10 649.0 653.1
Other intangible assets 16.5 16.1
Property, plant and equipment 11 437.8 483.0
Other Investments 0.1 0.1
Deferred tax asset 13.2 16.2
Retirement benefit asset 22.9 18.8
Derivative financial instruments 0.6 -
1,140.1 1,187.3
Current assets
Assets held for sale 18 66.7 2.3
Inventories 12 75.0 82.5
Trade and other receivables 13 178.5 195.4
Cash and cash equivalents 15 21.2 29.9
Derivative financial instruments 1.4 1.2
342.8 311.3
Total assets 1,482.9 1,498.6
Current liabilities
Liabilities held for sale 18 (33.9) (3.0)
Trade and other payables 14 (463.1) (492.7)
Current tax liabilities (1.5) (1.7)
Borrowings 15 (7.2) (6.9)
Lease liabilities 15 (14.0) (12.1)
Provisions (10.6) (15.9)
Derivative financial instruments (1.0) (2.1)
(531.3) (534.4)
Non-current liabilities
Borrowings 15 (212.4) (215.4)
Lease liabilities 15 (77.5) (72.2)
Provisions (18.6) (18.3)
Deferred tax liabilities (45.0) (42.2)
(353.5) (348.1)
Total liabilities (884.8) (882.5)
Net assets 598.1 616.1
Equity
Called up share capital 17 11.6 11.6
Own shares held 17 (1.7) (6.3)
Merger reserve (130.9) (130.9)
Hedging reserve 1.0 (0.5)
Translation reserve 19.8 33.7
Retained earnings 698.3 708.5
Total equity 598.1 616.1
Condensed Consolidated Statement of Changes in Equity
£m Share capital Own shares held Merger reserve Hedging reserve Translation reserve Retained earnings Total
Balance at 28 December 2024 11.6 (6.3) (130.9) (0.5) 33.7 708.5 616.1
(Audited)
Profit for the period - - - - - 16.8 16.8
Other comprehensive income/(expense) for the period - - - 0.1 (13.9) 2.7 (11.1)
Total comprehensive income/(expense) for the period - - - 0.1 (13.9) 19.5 5.7
Reclassification to inventory - - - 1.4 - - 1.4
Share-based payments - 4.6 - - - (4.6) -
Dividends (Note 9) - - - - - (27.6) (27.6)
Proceeds from exercise of share options (Note 17) - - - - - 0.1 0.1
Credit for share-based payments - - - - - 2.4 2.4
Balance at 28 June 2025 11.6 (1.7) (130.9) 1.0 19.8 698.3 598.1
(Unaudited)
£m Share capital Own shares held Merger reserve Hedging reserve Translation reserve Retained earnings Total
Balance at 31 December 2023 11.6 (4.4) (130.9) 1.1 32.8 697.4 607.6
(Audited)
Profit for the period - - - - - 35.2 35.2
Other comprehensive income for the period - - - 0.8 0.8 4.2 5.8
Total comprehensive income for the period - - - 0.8 0.8 39.4 41.0
Reclassification to inventory - - - (1.6) - - (1.6)
Purchase of own shares - (2.8) - - - - (2.8)
(Note 17)
Share-based payments - 5.8 - - - (5.8) -
Dividends (Note 9) - - - - - (25.3) (25.3)
Proceeds from exercise of share options (Note 17) - - - - - 0.3 0.3
Balance at 29 June 2024 11.6 (1.4) (130.9) 0.3 33.6 706.0 619.2
(Unaudited)
Condensed Consolidated Statement of Cash Flows
£m Note 26 weeks 26 weeks
ended ended
28 June 29 June
2025 2024
(Unaudited) (Unaudited)
Net cash generated from operating activities 19 56.1 70.7
Investing activities
Interest received 0.3 0.2
Purchases of property, plant and equipment (18.9) (13.2)
Purchase of intangibles (2.2) (1.4)
Acquisition of subsidiary - (1.8)
Proceeds on disposal of subsidiaries 18 6.5 6.9
Net cash used in investing activities (14.3) (9.3)
Financing activities
Dividends paid 9 (27.6) (25.3)
Own shares purchased 17 0.1 (2.5)
Increase in borrowings - 15.0
Repayment of borrowings (3.2) (33.9)
Principal elements of lease payments (6.9) (5.6)
Net cash used in financing activities (37.6) (52.3)
Net increase in cash and cash equivalents 4.2 9.1
Cash and cash equivalents at beginning of period 29.9 36.6
Effect of foreign exchange rate changes (1.4) (0.2)
Cash and cash equivalents at end of period 32.7 45.5
Included in cash and cash equivalent per the balance sheet 21.2 45.5
Included in assets held for sale 11.5 -
Notes to the condensed CONSOLIDATED INTERIM financial statements
1. General information
Bakkavor Group plc is a company limited by shares, incorporated and domiciled
in England, United Kingdom. Its registered office and principal place of
business is Fitzroy Place, 5(th) Floor, 8 Mortimer Street, London, W1T 3JJ,
England (Company number: 10986940). Its ordinary shares are listed on the
London Stock Exchange.
The principal activities of the Group comprise the manufacture of fresh
prepared foods and fresh produce. These activities are undertaken in the UK
and US where products are primarily sold through high-street supermarkets and
China where products are primarily sold through foodservice operators.
The Condensed Consolidated Interim Financial Statements ("Interim Report") for
the 26 weeks ended 28 June 2025 ("H1 25") and 26 weeks ended 29 June 2024 ("H1
24") do not comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 28 December 2024
were approved by the board of directors on 3 March 2025 and delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under section 498 of the Companies Act 2006.
The Interim Report has been reviewed, not audited.
The Interim Report has been prepared in accordance with the UK-adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency rules of the Financial Conduct Authority.
The Interim Report does not include all of the information and disclosure
required in the Annual Consolidated Financial Statements and should be read in
conjunction with the Bakkavor Group plc (the "Group") Annual Consolidated
Financial Statements for the 52 weeks ended 28 December 2024, which have been
prepared in accordance with UK-adopted International Accounting Standards, and
any public announcements made by the Group during the interim reporting
period.
Controlling parties
As at 28 June 2025, two of the Company's Directors, Agust Gudmundsson and
Lydur Gudmundsson, hold shares in the Company through their beneficial
ownership of Carrion Enterprises Limited (the corporate holding structure of
Agust Gudmundsson) and Umbriel Ventures Limited (the corporate holding
structure of Lydur Gudmundsson). Umbriel Ventures Limited holds 139,062,764
ordinary shares (representing 24.01% of the issued share capital of the
Company) and Carrion Enterprises Limited holds 142,103,505 ordinary shares
(representing 24.52% of the issued share capital of the Company). Lydur
Gudmundsson also holds 3,240,741 ordinary shares in the Company (following a
transfer from Umbriel Ventures Limited on the 29 July 2025).
Lixaner Co Limited, a company owned and controlled by Sigurdur Valtysson, who
runs the family office for Agust and Lydur Gudmundsson, holds 6,457,750
ordinary shares (representing 1.11% of the issued share capital of the
Company). Given the close relationship between the parties, Sigurdur Valtysson
is to be considered as acting in concert with Agust and Lydur Gudmundsson for
the purposes of the definition in the Takeover Code and the parties are
controlling shareholders of the Company. The aggregate shareholding in the
Company of Lydur Gudmundsson, Carrion Enterprises Limited and Umbriel Ventures
Limited and their concert party group (Lixaner Co Limited) is 290,864,760
ordinary shares (representing 50.20% of the issued share capital of the
Company).
Seasonality of operations
The Group's cash flows are affected by seasonal variations. Sales of fresh
prepared food have historically tended to be marginally higher during the
summer months and in the weeks leading up to Christmas.
2. Significant accounting policies
Basis of accounting
The financial information has been prepared on the historical cost basis,
except for the revaluation of financial instruments and retirement benefit
plan assets, which are stated at fair value
2. Significant accounting policies (continued)
Accounting policies
The accounting policies adopted are consistent with those of the previous
Group's Annual Financial Statements for the 52 weeks ended 28 December 2024.
The Group has taken advantage of the relief to amendments to IAS 7 and IFRS 7
in relation to supplier finance arrangements (SFAs) for the Interim Report.
Critical accounting judgements and key sources of estimation uncertainty
There have been no changes in the period to the Group's critical accounting
judgements and key sources of estimation uncertainty as disclosed in the
Group's Annual Financial Statements for the 52 weeks ended 28 December 2024.
Going concern
The Directors have reviewed the historical trading performance of the Group
and the forecasts for the 12-month period through to end of September 2026.
The Directors, in their detailed consideration of going concern, have reviewed
the Group's future revenue projections, and cash requirements, which they
believe are based on prudent interpretations of market data and past
experience.
The Directors have also considered the Group's level of available liquidity
under its financing facilities. The Group has a £350m corporate loan facility
with an initial maturity of four years through to July 2028, with options to
request two one-year extensions. The agreement comprises revolving credit
facilities of £200m and a Term Loan of £150m. In addition, at the end of
June 2025 the Group had £25 million of other debt facilities that will be
repaid on an amortising basis by August 2028.
The Directors have carried out a robust assessment of the significant risks
currently facing the Group. This has included scenario planning on the
implications of the potential impact of lower sales volumes and the associated
impact on factory performance, along with the potential impact of further cost
inflation on the Group's performance.
Having taken these factors into account under the scenario, which is
considered to be severe but plausible, the Directors consider that adequate
headroom is available based on the forecasted cash requirements of the
business. At the date of this report, the Group has complied in all respects
with the terms of its borrowing agreements, including its financial covenants,
and forecasts to continue to do so in the future.
Consideration of the firm offer by Greencore Group plc
On 7 July 2025 the shareholders of Bakkavor Group plc approved the terms of
the recommended cash and shares offer by Greencore Group plc ("Greencore") to
acquire the entire issued and to be issued share capital of Bakkavor Group
plc. Completion of the acquisition remains subject to the satisfaction or
waiver of the remaining conditions set out in the document sent to
shareholders to approve the transaction (Scheme document), including,
regulatory approval. Subject to obtaining this approval and the scheme
receiving the sanction of the court, the scheme is expected to become
effective during the first quarter of 2026. The Directors have assessed the
impact of this on the going concern basis of accounting below.
As set out in the Scheme document, Greencore has stated the cash consideration
for the transaction and the cash required to repay Group's existing bank
facilities, as a result of a change of control clause in these facilities,
will be funded from third party debt incurred by Greencore's UK subsidiary,
Greencore UK Holdings Limited. This third party debt is to be provided under a
new term loan facilities agreement entered into on 15 May 2025 with
Coöperatieve Rabobank U.A. (as facility agent) and BNP Paribas and
Coöperatieve Rabobank U.A. (as underwriters), pursuant to which senior term
loan facilities of a total of £825m have been made available to Greencore UK
Holdings Limited. Such facilities are in addition to Greencore's existing
£350m revolving credit facility.
The Directors of Bakkavor Group plc consider that as a result of the proposed
transaction there is a material uncertainty around Greencore's refinancing of
existing bank facilities as a result of change in control and the level of
funding that may be available to the existing Group's operations if the sale
to Greencore completes. The current Directors will not have control over the
Group if the sale completes and they do not currently have full knowledge of
the new ultimate parent undertaking's future funding plans in relation to the
Group and Company. Therefore the change of control position indicates the
existence of a material uncertainty which may cast significant doubt about the
Group's ability to continue as a going concern.
Notwithstanding this uncertainty, the Directors of Bakkavor Group plc consider
that the Group has adequate resources to meet its liabilities as they fall due
for the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the Financial Statements. The interim financial
statements do not include the adjustments that would result if the Group were
unable to continue as a going concern.
3. Segment information
The chief operating decision-maker ("CODM") has been defined as the Senior
Executive Team headed by the Chief Executive Officer. They review the Group's
internal reporting in order to assess performance and allocate resources.
Management has determined the segments based on these reports.
The China segment was held for sale as at 28 June 2025. Information about this
discontinued segment is provided in Note 18.
As at the statement of financial position date, the Group is organised into
continuing operations for the UK and US and discontinued operations for China
and manufactures fresh prepared foods and produce in each region.
The Group manages the performance of its businesses through the use of
'Adjusted operating profit' as defined in Note 22.
The following table provides an analysis of the Group's segment information
for the period from 29 December 2024 to 28 June 2025:
Continuing Operations Discontinued Group
£m Note UK US China
Total
Total
Revenue 961.6 114.7 1,076.3 58.3 1,134.6
Adjusted EBITDA 22 83.4 12.4 95.8 2.7 98.5
Depreciation (24.7) (5.4) (30.1) (2.2) (32.3)
Amortisation (1.7) (0.1) (1.8) - (1.8)
Share scheme charges (2.3) (0.1) (2.4) - (2.4)
Adjusted operating profit 22 54.7 6.8 61.5 0.5 62.0
Exceptional items 4 (14.7) (9.3) (24.0) 0.7 (23.3)
Operating profit 22 40.0 (2.5) 37.5 1.2 38.7
The following table provides an analysis of the Group's segment information
for the period from 31 December 2023 to 29 June 2024:
Re-presented(1)
Continuing Operations Discontinued Group
£m Note UK US Total China
Total
Revenue 957.4 109.4 1,066.8 54.4 1,121.2
Adjusted EBITDA 22 80.7 9.2 89.9 2.0 91.9
Depreciation (24.9) (5.5) (30.4) (3.0) (33.4)
Amortisation (1.5) (0.1) (1.6) - (1.6)
Share scheme charges (1.9) - (1.9) - (1.9)
Adjusted operating profit/(loss) 22 52.4 3.6 56.0 (1.0) 55.0
Exceptional items 4 - (0.6) (0.6) 4.4 3.8
Operating profit 22 52.4 3.0 55.4 3.4 58.8
3. Segment information (continued)
Major customers
For the 26 weeks ended 28 June 2025, the Group's four largest UK customers
accounted for 79.1% (H1 24: 78.9%) of total Group revenue from continuing
operations. These customers accounted for 88.6% (H1 24: 87.9%) of total UK
revenue from continuing operations. The Group does not enter into long-term
contracts with its retail customers. The percentage of Group revenue from
continuing operations for these customers is as follows:
26 weeks ended Re-presented(1)
28 June
2025 26 weeks ended
29 June
2024
Customer A 33.3% 33.5%
Customer B 23.3% 23.2%
Customer C 15.4% 15.2%
Customer D 7.1% 7.0%
4. Exceptional items
The Group's financial performance is analysed in two ways: review of
underlying performance (which does not include exceptional items) and separate
review of exceptional items. The Directors consider that the underlying
performance, which is reported as our "Adjusted" measures, is more
representative of the ongoing operations and key metrics of the Group.
Exceptional items are those that, in management's judgement, should be
disclosed by virtue of their nature or amount and include material items that
are non-recurring in nature and are important to users in understanding the
business. They may include, but is not limited to restructuring costs,
impairment of assets, profits or losses on sale of operations and associated
transaction costs, and transformation projects.
26 weeks ended Re-presented(1)
28 June
Continuing operations 2025 26 weeks ended
29 June
2024
£m
UK: Greencore transaction costs (11.0) -
UK: ERP transformation costs (3.7) -
US: Site closure and impairment costs (9.3) (0.6)
Total exceptional items included in operating profit (24.0) (0.6)
Exceptional finance costs (Note 5) - (0.6)
Total exceptional items before tax (24.0) (1.2)
Tax on exceptional items 3.2 0.3
Total exceptional items from continuing operations after tax (20.8) (0.9)
Discontinued Operations
Net profit on disposal of China operations 0.7 4.4
Tax on exceptional items - (0.3)
Total exceptional items from discontinued operations after tax 0.7 4.1
Total exceptional items before tax (23.3) 3.2
Total tax on exceptional items 3.2 -
Total exceptional items after tax (20.1) 3.2
4. Exceptional items (continued)
H1 25:
The Group recognised net exceptional costs of £23.3m in H1 25, which
included:
· £11.0m of transaction costs related to costs incurred in relation to
the proposed takeover of Bakkavor Group plc by Greencore Group plc.
· £3.7m related to our UK ERP transformation. In 2024, the Group
commenced a multi-year project to replace its legacy UK ERP systems with a new
ERP system which is a cloud-based solution. The total project cost is expected
to be c.£40m and be incurred over four years, with c.£20m to be expensed and
recognised within exceptional items and the balance to be capital spend.
· £9.3m of US Closure and impairment costs. The decision to
discontinue the operations at Jessup site resulted in closure costs of £2.7m
relating to property costs and redundancy. In addition there were impairment
charges for owned assets of £5.3m and £1.3m for leased assets relating to
redundant assets at Jessup, and Charlotte as result of the transfer of
business to this site.
· £0.7m of exceptional income included in discontinued operating
profit related to the release of Hong Kong liabilities 'held for sale' at 28
December 2024. The sale of the Hong Kong operations completed in March 2025.
H1 24:
The Group recognised net exceptional income of £3.2m in H1 24, which
included:
· £0.6m impairment charge in the US relating to equipment that is no
longer in use; and
· £0.6m charge relating to accelerated amortisation of refinancing
fees, see Note 5 for further details.
· £4.4m of exceptional items included in discontinued operating profit
related to profit on disposal arising from our China operations, of which
£3.9m being profit on disposal from the 100% owned subsidiary Bakkavor
(Taicang) Baking Company Limited on 28 March 2024; and a further £0.5m of net
profit arising from the sale of our Hong Kong associate in 2023 (with £1.4m
of exceptional income recognised in FY23).
5. Finance costs, net
Continuing operations
£m 26 weeks ended 26 weeks ended
28 June 29 June
2025 2024
Interest on borrowings 7.5 8.1
Interest on non-recourse receivables financing 3.2 3.4
Interest on lease liabilities 1.5 1.5
Unwind of discount on provisions 0.5 0.5
Other Interest 0.2 -
Total finance costs pre exceptionals 12.9 13.5
Exceptional finance costs - 0.6
Total finance costs 12.9 14.1
Interest income (0.3) (0.2)
Total finance costs, net 12.6 13.9
Exceptional finance costs all relate to continuing operations.
In H1 24, exceptional finance costs of £0.6m wholly related to the
accelerated amortisation of refinancing fees relating to the Group's
refinancing of its core debt facilities which completed on 25 July 2024, with
the process having launched on 7 June 2024.
6. Other (losses) and gains
Continuing operations 26 weeks ended 26 weeks ended
28 June 29 June
2025 2024
£m
Foreign exchange (losses)/gains (0.3) 0.3
7. Tax
The Group's effective tax rate for the period was 36% (H1 24: 22.0%).
Excluding the impact of net exceptional costs and discontinued operations, the
effective tax rate was 25.7% which is 0.7% higher than the UK statutory tax
rate of 25.0%, and 2.4% higher than prior year (H1 24: 23.3%). The increase in
underlying effective tax rate year-on-year is driven by the non-recurrence of
one-off benefits in the prior year. The tax charge for the period has been
calculated by applying the effective tax rate which is expected to apply for
the year ending 27 December 2025.
On 20 June 2023, legislation in respect of the OECD Pillar Two model rules
were substantively enacted in the UK, Finance (No.2) Act 2023, and came into
effect from 1 January 2024. The Group is within the scope of the Pillar Two
rules and the IAS 12 exception to recognise and disclose information about
deferred tax assets and liabilities related to Pillar Two income taxes has
been applied. An assessment has previously been undertaken to consider the
impact of the rules in the jurisdictions in which the group operates for the
accounting periods ended 30 December 2023 and 28 December 2024 and has now
been updated to reflect the forecasted position for the year ending 27
December 2025. It is anticipated that there will be no material amounts of
top up tax due or that the jurisdictions in which the Group operates will meet
at least one of the transitional CbCR safe harbour tests (which potentially
apply up to the year ending December 2026).
A reconciliation of the expected tax rate to the forecast effective tax rate
is as follows:
Re-presented(1)
26 weeks ended 26 weeks ended
28 June 29 June
2025 2024
£m Tax rate Tax rate
Profit before tax - continuing operations 24.6 41.8
Profit before tax - discontinued operations 1.6 3.4
Profit before tax 26.2 45.2
Expected tax at 25.0% 6.5 25.0% 11.3 25.0%
Impact of:
Non-deductible costs 3.2 12.2% - -
Non-taxable income (0.2) (0.8%) (0.8) (1.8%)
Overseas utilised losses not previously recognised (0.1) (0.4%) - -
Overseas losses not recognised - - 0.3 0.6%
Prior year adjustment - - (0.8) (1.8%)
Total tax charge 9.4 36.0% 10.0 22.0%
Tax Charge - continuing operations 9.3 37.8% 9.7 23.2%
Tax Charge - discontinued operations 0.1 0.3
Total tax charge 9.4 10.0
Add: Tax credit on exceptional costs - continuing operations 3.2 0.3
Deduct: Tax charge on exceptional costs - discontinued operations - (0.3)
Deduct: Tax charge on discontinued operations (0.1) -
Tax charge continuing operations pre-exceptional items 12.5 25.7% 10.0 23.3%
8. Earnings per share
The calculation of earnings per Ordinary share is based on earnings after tax
and the weighted average number of Ordinary shares in issue during the period.
For diluted earnings per share, the weighted average number of Ordinary shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
shares.
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings
26 weeks ended 28 June 2025 26 weeks ended 29 June 2024
£m Continuing Discontinued Total Continuing Discontinued Total
Profit for the period 15.3 1.5 16.8 32.1 3.1 35.2
Number of shares
26 weeks ended 28 June 2025 26 weeks ended 29 June 2024
Number 000's Total Total
Weighted average number of Ordinary shares 578,383 577,790
Effect of potentially dilutive Ordinary shares 10,434 8,423
Weighted average number of Ordinary shares for diluted earnings per share 588,817 586,213
Earnings per share
26 weeks ended 28 June 2025 26 weeks ended 29 June 2024
Continuing Discontinued Total Continuing Discontinued Total
Basic earnings per share 2.7p 0.2p 2.9p 5.6p 0.5p 6.1p
Diluted earnings per share 2.6p 0.2p 2.8p 5.5p 0.5p 6.0p
9. Dividends
No dividend has been declared for H1 25 interim results.
In relation to the acquisition of Bakkavor by Greencore, under the terms of
the Co-operation Agreement (published on 15 May 2025), Greencore and Bakkavor
have agreed that if completion does not occur on or before 31 January 2026,
Bakkavor will be entitled to declare and pay an interim dividend in respect of
the 26 week period ending 28 June 2025 of an amount equal to no more than 75%
of Bakkavor's adjusted EPS, subject further to a cap of 3.20 pence per
Bakkavor share (H1 24: 3.20 pence).
Reporting period ended Dividend per share Date Approved Date Paid Number of dividend rights waived(1) Amount Paid
28 December 2024
Final dividend 4.80p May 2025 28 May 2025 4,057,116 £27,617,687
Interim dividend 3.20p September 2024 11 October 2024 1,917,903 £18,480,246
30 December 2023
Final dividend 4.37p May 2024 29 May 2024 1,065,145 £25,274,351
Interim dividend 2.91p September 2023 13 October 2023 3,264,816 £16,766,278
(1)Dividend rights waived in relation to Ordinary shares held in the Bakkavor
Group plc Employee Benefit Trust.
10. Goodwill
£m
At 28 December 2024
Cost 705.1
Accumulated impairment losses (52.0)
Net book amount 653.1
At 28 December 2024 653.1
Exchange rate difference during the period (4.1)
At 28 June 2025 649.0
11. Property, plant and equipment
£m
At 28 December 2024
Cost 1,230.8
Accumulated depreciation and impairment (747.8)
Net book amount 483.0
At 28 December 2024 483.0
Additions 37.8
Disposals (0.6)
Depreciation charge for the period (32.3)
Reclassified as held for sale (note 18) (34.3)
Impairment charge (6.5)
Exchange rate difference during the period (9.3)
At 28 June 2025 437.8
12. Inventories
£m 28 June 28 December
2025
2024
Raw materials, packaging and consumables 60.4 68.3
Work-in-progress 3.2 3.6
Finished goods 11.4 10.6
75.0 82.5
13. Trade and other receivables
£m 28 June 28 December
2025
2024
Amounts receivable from trade customers 138.5 159.5
Expected credit loss (1.3) (2.5)
Net amounts receivable from trade customers 137.2 157.0
Other receivables 16.4 22.8
Prepayments 24.9 15.6
Trade and other receivables due within one year 178.5 195.4
During the period, the Group has continued to operate trade receivable
factoring arrangements. These are non-recourse arrangements and therefore
amounts are de-recognised from trade receivables. At 28 June 2025 £161.1m was
drawn under factoring facilities (28 December 2024: £138.3m) representing
cash collected before it was contractually due from the customer.
As at 28 June 2025, the Group's amounts receivable from trade customers
includes £88.2m (28 December 2024: £83.7m) which could be factored under the
non-recourse trade receivable factoring arrangement.
14. Trade and other payables
£m 28 June 28 December
2025
2024
Trade payables 272.5 297.9
Other taxation 0.1 2.3
Other payables 29.1 28.0
Accruals and deferred income 161.4 164.5
Trade and other payables due within one year 463.1 492.7
During the period, the Group has continued to operate an arrangement which
provides financing for the Group's suppliers. This is a voluntary programme
that potentially gives suppliers earlier access to cash. At 28 June 2025,
trade payables amounting to £47.6m (28 December 2024: £51.2m) were subject
to these arrangements. These balances are classified as trade payables, and
the related payments as cash flows from operating activities since the
original obligation to the supplier remains and has not been replaced with a
new obligation to the bank.
15. Net debt
£m 28 June 28 December
2025
2024
Cash and cash equivalents 21.2 29.9
Cash included in assets held for sale (Note 18) 11.5 -
Borrowings (6.5) (6.4)
Interest accrual (1.3) (1.2)
Unamortised fees 0.6 0.7
Lease liabilities (14.0) (12.1)
Total debt due within one year (21.2) (19.0)
Borrowings (213.9) (217.2)
Unamortised fees 1.5 1.8
Lease liabilities (77.5) (72.2)
Total debt due after one year (289.9) (287.6)
Group net debt (278.4) (276.7)
15. Net debt (continued)
Group net debt is the sum of cash and cash equivalents, prepaid fees to be
amortised over the term of outstanding borrowings, outstanding borrowings,
interest accrued on borrowings and lease liabilities.
Cash and cash equivalents is net of £11.5m held by the China business that
has been reclassified to assets held for sale.
On 25 July 2024, the Group completed a refinancing of its core debt
facilities, with an aggregate loan amount of £350m, comprising a £150m term
loan and a £200m revolving credit facility. These new facilities will mature
in July 2028 with the option of two one-year extensions.
16. Financial instruments
The categories of financial instruments are as follows:
£m 28 June 28 December
2025
2024
Financial assets
Fair value through OCI or profit and loss:
Trade receivables 88.2 83.7
Derivative financial instruments 2.0 1.2
Measured at amortised cost:
Trade receivables 49.0 73.3
Other receivables 6.9 8.7
Cash and cash equivalents 21.2 29.9
167.3 196.8
£m 28 June 28 December
2025
2024
Financial liabilities
Fair value through OCI or profit and loss:
Derivative financial instruments 1.0 2.1
Other financial liabilities at amortised cost:
Trade payables 272.5 297.9
Other payables 6.2 13.3
Accruals 161.4 163.7
Borrowings 219.6 222.3
Lease liabilities 91.5 84.3
752.2 783.6
The fair value of financial assets approximates to their carrying values due
to the short-term nature of the receivables. The fair value of trade
receivables and derivative financial instruments has been determined as level
2 under IFRS 7 Financial Instruments: Disclosures. Quoted prices are not
available for the derivative financial instruments and so valuation models are
used to estimate fair value. The models calculate the expected cash flows
under the terms of each specific contract and then discount these values back
to a present value. These models use as their basis independently sourced
market parameters including, for example, interest rate yield curves and
currency rates.
16. Financial instruments (continued)
The fair value of other financial liabilities at amortised cost approximates
to their carrying value. The trade and other payables approximate to their
fair value due to the short-term nature of the payables. The lease liabilities
fair value approximates to the carrying value based on discounted future cash
flows.
The borrowings fair value is £220.4m (28 December 2024: £223.6m).
Trade and other receivables, trade and other payables and cash and cash
equivalents classified as held for sale are not included in the table above.
See note 18.
There have been no changes to fair values as a result of change in credit risk
of the Group or the Group's customers.
17. Share capital and own shares held
Issued share capital as at 28 June 2025 and 28 December 2024 amounted to
£11.6m (579,425,585 Ordinary shares of £0.02 each).
The Company purchases shares through an Employee Benefit Trust called the
Bakkavor Group plc Employee Benefit Trust (the "Trust"). Own shares purchased
are recorded at cost and deducted from equity.
The own shares held represents the cost of shares in Bakkavor Group plc
purchased in the market and held by the Trust to satisfy share awards under
the Group's share scheme plans. The number of Ordinary shares held by the
Trust at 28 June 2025 was 1,239,284 which represents 0.2% of total called up
share capital (28 December 2024: 4,237,328 and 0.7% respectively).
No own shares held in Bakkavor Group plc were cancelled during the periods
presented.
The table below shows the number of own shares purchased and distributed by
the Trust and the related cost recognised within equity:
Number of shares £m
Balance at 28 December 2024 4,237,328 6.3
Distribution of shares under share scheme plans (2,998,044) (4.6)
Balance at 28 June 2025 1,239,284 1.7
The table below shows amounts included in the Condensed Consolidated Statement
of Cash Flows in relation to own shares purchased for share schemes:
£m 26 weeks ended 26 weeks ended
28 June
29 June
2025
2024
Cash paid to purchase own shares - (2.8)
Cash received from distribution of shares under share scheme plans 0.1 0.3
Included in financing activities cash flows 0.1 (2.5)
18. Discontinued operations and Assets Held for Sale
On 29 April 2025, the Group announced that it had entered into a binding
agreement to sell its China operations, with the sale of the entire issued
share capital of Bakkavor China Holdings Limited to Lihe Xing (Qingdao) Food
Technology Co. Limited, wholly owned by Lihoo's (Qingdao) Food Industry
Company Limited, a company headquartered in China.
The China operations was classified as held for sale and as a discontinued
operation in the 26 weeks ended 28 June 2025. The sale completed on 11 July
2025.
On 24 December 2024, a business transfer agreement was signed for the sale of
trade and assets of the Hong Kong business. The assets and liabilities of the
Hong Kong business, which was recognised as a "disposal group", were presented
as £2.3m of assets held for sale and £3.0m of liabilities held for sale at
28 December 2024. The sale completed on 14 March 2025.
The China and Hong Kong operations are classified as discontinued operations
as they were held for sale at 28 June 2025 and 28 December 2024 respectively.
In addition, on 28 March 2024, the Group disposed of Bakkavor (Taicang) Baking
Company Limited, a 100% owned subsidiary. The sale of these businesses has
resulted in the Group no longer operating in a major geographic region.
In the FY24 financial statements, the Group did not consider Hong Kong and
China Bakery as a discontinued operation on their own as they were not
significant operations within the China region.
The comparative condensed consolidated income statement and statement of
comprehensive income has been re-presented to show the discontinued operations
separately from continuing operations.
Financial performance
£m 26 weeks ended 26 weeks ended
28 June
29 June
2025
2024
Revenue 58.3 54.4
Cost of sales (46.6) (42.0)
Gross profit 11.7 12.4
Distribution costs (1.9) (2.0)
Other administrative costs (9.3) (11.4)
Exceptional income (Note 4) 0.7 4.4
Operating profit 1.2 3.4
Other gains 0.4 -
Profit before tax of discontinued operations 1.6 3.4
Tax (0.1) (0.3)
Profit after tax from discontinued operations 1.5 3.1
Exchange differences on translation of discontinued operations (2.8) 0.2
Other comprehensive (expense) / income from discontinued operations (1.3) 3.3
Earnings per share from discontinued operations
Basic 0.2p 0.5p
Diluted 0.2p 0.5p
18. Discontinued operations and Assets Held for Sale (continued)
Included in the "Proceeds on disposal of subsidiaries" in the Consolidated
Statement of Cash Flows, £7.1m is related to a deposit received during HY25
for the sale of the China operation, and £0.6m is related to costs for the
sale of trade and assets of the Hong Kong business.
Assets held for sale
£m
28 June
2025
China
Property, plant and equipment (Note 11) 32.2
Inventories 2.6
Trade and other receivables 18.3
Cash and cash equivalents 11.5
64.6
UK
Property, plant and equipment - Wigan land and building (Note 11) 2.1
2.1
Assets held for sale 66.7
China
Trade and other payables (33.3)
Borrowings (0.6)
Liabilities held for sale (33.9)
Net assets held for sale 32.8
£m
28 December
2024
Hong Kong
Assets held for sale 2.3
Liabilities held for sale (3.0)
Net liability held for sale (0.7)
19. Notes to the Condensed Consolidated Statement of Cash Flows
£m 26 weeks ended 26 weeks ended
28 June
29 June
2025
2024
Re-presented(1)
Operating profit from:
Continuing operations 37.5 55.4
Discontinued operations 1.2 3.4
Operating profit including discontinued operations 38.7 58.8
Adjustments for:
Depreciation of property, plant and equipment 32.3 33.4
Amortisation of intangible assets 1.8 1.6
Impairment of property, plant, equipment and intangible assets 6.6 0.6
Profit on disposal of subsidiary and associates (0.7) (4.4)
Share scheme charges 2.4 0.1
Net retirement benefits charge less contributions (0.5) (1.1)
Operating cash flows before movements in working capital 80.6 89.0
Decrease/(increase) in inventories 4.9 (3.4)
Increase in receivables (1.5) (26.6)
(Decrease)/increase in payables (7.9) 32.2
(Decrease)/increase in provisions (0.1) 1.3
Decrease in exceptional provisions (1.4) (2.2)
Cash generated from operations 74.6 90.3
Income taxes paid (6.7) (7.2)
Interest paid (11.8) (12.4)
Net cash generated from operating activities 56.1 70.7
20. Contingent liabilities
The Group may from time to time, and in the normal course of business, be
subject to claims from customers and counterparties. The Group regularly
reviews all of these claims to determine any possible financial loss to the
Group. No provision was considered necessary in the Condensed Consolidated
Interim Financial Statements.
21. Events after the Statement of Financial Position date
The Shareholders of both Bakkavor Group plc and Greencore Group plc approved
the terms of the recommended cash and shares offer by Greencore Group plc to
acquire the entire issued and to be issued share capital of Bakkavor Group plc
at Extraordinary General Meetings (EGMs) held on 4 and 7 July. The Competition
and Markets Authority announced the launch of its merger inquiry on 1
September 2025 and has a deadline of 27 October 2025 for its Phase 1 decision.
On 11 July 2025, the Group completed the sale of its entire issued share
capital of Bakkavor China Holdings Limited, a 100% owned subsidiary, to Lihe
Xing (Qingdao) Food Technology Co. Limited. The Group received cash
consideration of £51m after fees and the gain on disposal is expected to be
at least £18m after tax.
22. Alternative performance measures
The Group uses various non-IFRS financial measures to evaluate growth trends,
assess operational performance and monitor cash performance. The Directors
consider that these measures enable investors to understand the ongoing
operations of the business. They are used by management to monitor financial
performance as it is considered to aid comparability of the financial
performance of the Group from year to year.
Like-for-like ("LFL") revenue
The Group defines LFL revenue as revenue from continuing and discontinued
operations adjusted for the revenue generated from businesses closed, sold or
acquired in the current and prior year, and the effect of foreign currency
movements and revenues.
The following table provides the information used to calculate LFL revenue for
the Group and for each segment:
Group
£m 26 weeks ended Re-presented(1) Change %
28 June
2025 26 weeks ended
29 June
2024
Statutory revenue including discontinued operations 1,134.6 1,121.2 1.2%
Less: Statutory revenue discontinued operations (58.3) (54.4)
Statutory revenue continuing operations 1,076.3 1,066.8 0.9%
Effect of currency movements 3.0 -
Like-for-like revenue continuing operations 1,079.3 1,066.8 1.2%
UK
£m
Statutory and like-for-like revenue continuing operations 961.6 957.4 0.4%
US
£m
Statutory revenue continuing operations 114.7 109.4 4.8%
Effect of currency movements 3.0 -
Like-for-like revenue continuing operations 117.7 109.4 7.6%
China (Discontinued operation)
£m
Statutory revenue 58.3 54.4 7.2%
Effect of currency movements 1.8 -
Revenue from sold business (2.4) (8.6)
Like-for-like revenue 57.7 45.8 25.9%
22. Alternative performance measures (continued)
Adjusted EBITDA and Adjusted operating profit
The Group manages the performance of its businesses through the use of
'adjusted EBITDA' and 'adjusted operating profit', as these measures exclude
the impact of items that hinder comparison of profitability year-on-year. In
calculating adjusted operating profit, we exclude restructuring costs, asset
impairments and those additional charges or credits that are considered
significant or one-off in nature. In addition, for adjusted EBITDA we exclude
depreciation, amortisation and share scheme charges, as these are non-cash
amounts. Adjusted operating profit margin is used as an additional profit
measure that assesses profitability relative to the revenues generated by the
relevant segment. It is calculated by dividing the adjusted operating profit
by the statutory revenue for the relevant segment.
The Group calculates adjusted EBITDA on a pre-IFRS 16 basis for the purposes
of determining covenants under its financing agreements.
The following table provides a reconciliation from the Group's operating
profit to adjusted operating profit and adjusted EBITDA for continuing and
discontinued operations.
26 weeks ended 29 June 2024
26 weeks ended 28 June 2025
£m Continuing Discontinued Total Continuing Discontinued Total
Operating profit 37.5 1.2 38.7 55.4 3.4 58.8
Exceptional items (Note 4) 24.0 (0.7) 23.3 0.6 (4.4) (3.8)
Adjusted operating profit 61.5 0.5 62.0 56.0 (1.0) 55.0
Depreciation 30.1 2.2 32.3 30.4 3.0 33.4
Amortisation 1.8 - 1.8 1.6 - 1.6
Share scheme charges 2.4 - 2.4 1.9 - 1.9
Adjusted EBITDA 95.8 2.7 98.5 89.9 2.0 91.9
Less IFRS 16 impact (8.4) (0.2) (8.6) (6.9) (0.2) (7.1)
Adjusted EBITDA pre IFRS 16(1) 87.4 2.5 89.9 83.0 1.8 84.8
(1) Excludes the impact of IFRS 16 as the Group's bank facility agreement
definition of Adjusted EBITDA excludes the impact of this standard.
Operational net debt and leverage
Operational net debt excludes the impact of non-cash items on the Group's net
debt. The Directors use this measure, as it reflects actual net borrowings at
the relevant reporting date and is most comparable with the Group's free cash
flow and aligns with the definition of net debt in the Group's bank facility
agreements which exclude the impact of IFRS 16 and restricted cash. The
following table provides a reconciliation from the Group's net debt to the
Group's operational net debt:
£m 28 June 28 December 29 June
2025
2024
2024
Group net debt (278.4) (276.7) (288.4)
Restricted cash* (7.1) - -
Unamortised fees (2.1) (2.5) (0.2)
Interest accrual 1.3 1.2 0.5
Lease liabilities recognised under IFRS 16 91.5 84.2 86.3
Group operational net debt (194.8) (193.8) (201.8)
Adjusted EBITDA (last 12 months pre IFRS 16 and including covenant 177.8 172.6 166.5
adjustments)
Leverage (Operational net debt/Adjusted EBITDA pre IFRS 16 and including 1.1 1.1 1.2
covenant adjustments)
*The restricted cash of £7.1m relates to deposit proceeds for the disposal of
the China business. Under the banking agreement, restricted cash is not
included when calculating leverage and is therefore adjusted to arrive at
Operational net debt.
22. Alternative performance measures (continued)
Free cash flow
The Group defines free cash flow as the amount of cash generated by the Group
after meeting all of its obligations for interest, tax and pensions, and after
purchases of property, plant and equipment (excluding development projects)
and intangible assets but before payments of refinancing fees and other
exceptional or significant non-recurring cash flows. Free cash flow has
benefitted from non-recourse factoring of receivables as set out in Note 13
and the extension of payment terms for certain suppliers as described in Note
14. The Directors view free cash flow as a key liquidity measure, and the
purpose of presenting free cash flow is to indicate the underlying cash
available to pay dividends, repay debt or make further investments in the
Group. The following table provides a reconciliation from net cash generated
from operating activities to free cash flow:
£m 26 weeks ended 26 weeks ended
28 June
2025 29 June
2024
Net cash generated from operating activities 56.1 70.7
Interest received 0.3 0.2
Purchases of property, plant and equipment (18.9) (13.2)
Purchase of intangible assets (2.2) (1.4)
Impact of IFRS 16 (6.8) (5.6)
Cash impact of exceptional items 18.8 2.5
Free cash flow 47.3 53.2
22. Alternative performance measures (continued)
Adjusted earnings per share
The Group calculates Adjusted basic earnings per share by dividing Adjusted
earnings by the weighted average number of Ordinary shares in issue during the
period. The Group calculates Adjusted diluted earnings per share by dividing
Adjusted earnings by the weighted average number of Ordinary shares (including
dilutive shares) for diluted earnings per share. Adjusted earnings is
calculated as profit for the period adjusted to exclude exceptional items. The
Directors use this measure as it tracks the underlying profitability of the
Group and enables comparison with the Group's peer companies. The following
table reconciles profit for the period to Adjusted earnings for continuing and
discontinued operations:
26 weeks ended 28 June 2025 26 weeks ended 29 June 2024
£m Continuing Discontinued Total Continuing Discontinued Total
Profit for the period 15.3 1.5 16.8 32.1 3.1 35.2
Exceptional items (Note 4) 24.0 (0.7) 23.3 1.2 (4.4) (3.2)
Tax on exceptional items (3.2) - (3.2) (0.3) 0.3 -
Adjusted earnings 36.1 0.8 36.9 33.0 (1.0) 32.0
Add back: Tax on adjusted profit before tax 12.5 0.1 12.6 10.0 - 10.0
Adjusted profit before tax 48.6 0.9 49.5 43.0 (1.0) 42.0
Effective tax rate on underlying activities 25.7% 11.1% 25.5% 23.3% -% 24.0%
(Tax on Adjusted profit before tax/Adjusted profit before tax)
26 weeks ended 28 June 2025 26 weeks ended 29 June 2024
Number 000's Total Total
Weighted average number of Ordinary shares 578,383 577,790
Effect of dilutive Ordinary shares 10,434 8,423
Weighted average number of Ordinary shares for diluted earnings per share 588,817 586,213
Continuing Discontinued Total Continuing Discontinued Total
Adjusted basic earnings per share 6.3p 0.1p 6.4p 5.7p (0.2p) 5.5p
Adjusted diluted earnings per share 6.2p 0.1p 6.3p 5.7p (0.2p) 5.5p
22. Alternative performance measures (continued)
Return on Invested Capital ("ROIC")
The Group defines ROIC as Adjusted operating profit after tax divided by the
average invested capital for the year. Adjusted operating profit after tax is
defined as operating profit excluding the impact of exceptional items less tax
at the Group's effective tax rate. Invested capital is defined as total assets
less total liabilities excluding; net debt and pension assets and liabilities
(net of deferred tax) at the period end. The Group utilises ROIC to measure
how effectively it uses its invested capital. Average invested capital is the
simple average of invested capital at the beginning of the period and the end
of the period.
The Directors believe that ROIC is a useful indicator of the amount returned
as a percentage of shareholders' invested capital. The Directors believe that
ROIC can help analysts, investors and stakeholders to evaluate the Group's
profitability and the efficiency with which its invested capital is employed.
The following table sets out the calculations of Adjusted operating profit
after tax and invested capital used in the calculation of ROIC for continuing
and discontinued operations:
52 weeks ended 28 June 2025
52 weeks ended 29 June 2024
£m Continuing Discontinued Total Continuing Discontinued Total
Operating profit 75.1 (1.8) 73.3 107.7 1.9 109.6
Exceptional items 45.5 1.8 47.3 0.7 (4.4) (3.7)
Adjusted operating profit 120.6 - 120.6 108.4 (2.5) 105.9
Taxation at the underlying effective rate (26.0) - (26.0) (25.8) 0.6 (25.2)
Adjusted operating profit after tax 94.6 - 94.6 82.6 (1.9) 80.7
Invested capital
Total assets 1,418.3 64.6 1,482.9 1,434.2 69.6 1,503.8
Total liabilities (852.1) (32.7) (884.8) (860.4) (24.2) (884.6)
Net debt at period end 289.9 (11.5) 278.4 297.4 (9.0) 288.4
Deposit for sale of China - 7.1 7.1 - - -
Retirement benefit scheme surplus (22.9) - (22.9) (18.7) - (18.7)
Deferred tax liability on retirement benefit scheme 5.7 - 5.7 4.7 - 4.7
Invested capital 838.9 27.5 866.4 857.2 36.4 893.6
Average invested capital for ROIC calculation 848.1 31.9 880.0 887.2 38.3 925.5
ROIC (%) 11.2% -% 10.8% 9.3% (5.0%) 8.7%
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, the Condensed
Consolidated Interim Financial Statements has been prepared in accordance with
IAS 34: 'Interim Financial Reporting', with ASB's 2007 Statement Half-Yearly
Reports, as contained in the UK adopted International Accounting Standard 34,
'Interim Financial Reporting', and that the interim management report includes
a fair review of the information required by Disclosure Guidance and
Transparency Rules ("DTR") 4.2.7R and DTR 4.2.8R, namely:
· an indication of important events that have occurred during the first
six months of the financial year and their impact on the Condensed
Consolidated Interim financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year;
and
· material related party transactions that have taken place in the
first six months of the current financial year and any material changes in the
related party transactions described in the last annual report.
The Board of Directors that served during the 26 weeks ended 28 June 2025, and
their respective responsibilities, can be found on pages 86 to 92 of the
Annual Report & Accounts 2024. A list of current directors is maintained
on the Bakkavor Group plc website at: Bakkavor Group plc - EN - About us -
Leadership - Group Board
(https://protect.checkpoint.com/v2/r06/___https:/www.bakkavor.com/jsdfgtzy-zxdqjfijwxmnudlwtzu-gtfwidijkfzqy.fxuC___.ZXV3MjpuZXh0MTU6YzpvOmJlY2ZmZjNiNWZhZmY1NWZlOTlmZWE4ODY1NGY3NTA4Ojc6OTRiMDpjNTQzNWM4MWI0YjNhM2M4MWM4NTljY2QzODM3ZWNlMWI5ZDgyZDBjNWI5ZTQ2ZDI5ZjkwMGQwOGY3ZDJkYTUzOnA6RjpU)
The financial statements on pages 12 to 35 were approved by the Group Board on
2 September 2025 and signed on their behalf by:
Mike
Edwards
Lee Miley
Chief Executive
Officer
Chief Financial Officer
2 September 2025
Independent review report to Bakkavor Group plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Bakkavor Group plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Condensed Consolidated
Interim Financial Statements of Bakkavor Group plc for the 26 week period
ended 28 June 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Statement of Financial Position as at 28
June 2025;
· the Condensed Consolidated Income Statement and the Condensed
Consolidated Statement of Comprehensive Income for the period then ended;
· the Condensed Consolidated Statement of Changes in Equity for the
period then ended;
· the Condensed Consolidated Statement of Cash Flows for the period
then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Condensed Consolidated
Interim Financial Statements of Bakkavor Group plc have been prepared in
accordance with UK adopted International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Condensed Consolidated
Interim Financial Statements and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the interim
financial statements.
Material uncertainty related to going concern
In forming our conclusion on the interim financial statements, which is not
modified, we have considered the adequacy of the disclosure made in note 2 to
the interim financial statements concerning the group's ability to continue as
a going concern. On 7 July 2025 the shareholders of Bakkavor Group plc
approved the terms of the recommended cash and shares offer by Greencore Group
plc ("Greencore") to acquire the entire issued and to be issued share capital
of Bakkavor Group plc ("the Group"). Completion of the acquisition remains
subject to the satisfaction or waiver of the remaining conditions set out in
the document sent to shareholders to approve the transaction ('Scheme
document'), including regulatory approval. Subject to obtaining this approval
and the scheme receiving the sanction of the court, the Scheme is expected to
become effective during the first quarter of 2026, at which point Greencore
will acquire the Group.
The Directors of Bakkavor Group plc consider that as a result of the proposed
transaction there is a material uncertainty around Greencore's refinancing of
the Group's existing bank facilities as a result of change in control and the
level of funding that may be available to the existing Group's operations if
the sale to Greencore completes. The current Directors will not have control
over the Group if the sale completes and they do not currently have full
knowledge of the new ultimate parent undertaking's future funding plans in
relation to the Group and Company. Therefore the change of control position
indicates the existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern. These
conditions, along with the other matters explained in note 2 to the interim
financial statements, indicate the existence of a material uncertainty which
may cast significant doubt about the group's ability to continue as a going
concern. The interim financial statements do not include the adjustments that
would result if the group were unable to continue as a going concern.
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately applied the going concern basis of accounting in the
preparation of the interim financial statements.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Condensed Consolidated Interim Financial Statements, including the interim
financial statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Condensed
Consolidated Interim Financial Statements in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Condensed Consolidated Interim Financial
Statements, including the interim financial statements, the directors are
responsible for assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Condensed Consolidated Interim Financial Statements based on
our review. Our conclusion is based on procedures that are less extensive than
audit procedures, as described in the Basis for conclusion paragraph of this
report. This report, including the conclusion, has been prepared for and only
for the company for the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this conclusion,
accept or assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Birmingham
2 September 2025
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