TIDMBAKK
RNS Number : 6751M
Bakkavor Group PLC
25 May 2022
25 May 2022
Bakkavor Group plc
Q1 2022 trading update
Resilient Q1 trading performance; FY22 in line with management
expectations
Bakkavor Group plc (the "Company") and its subsidiaries
("Bakkavor" or "the Group"), the leading international provider of
fresh prepared food ("FPF"), today announces its trading update for
the 13 weeks to 26 March 2022.
Q1 2022 financial summary
Reported Like-for-like(1)
GBP million revenue Growth ('LFL') revenue LFL growth
------------- --------- ------- ----------------- -----------
Group 485.4 11.5% 483.1 11.0%
UK 407.4 8.7% 407.4 8.7%
US 55.1 40.9% 53.8 37.4%
China 22.9 5.5% 21.9 1.4%
------------- --------- ------- ----------------- -----------
Resilient Q1 trading performance; Group in a strong financial
position
-- Reported revenue up 11.5% to GBP485.4m. LFL revenue up 11.0% on 2021 and up 8.0% on 2020
-- UK LFL sales growth driven by price and good volumes against a period impacted by lockdown
-- Strong sales momentum in the US, driven by continued volume
growth with strategic customers, particularly in fresh meals
-- In China, regional restrictions have significantly impacted
performance from March onwards, with Q1 LFL sales marginally up
-- Whilst inflationary headwinds have intensified in the period,
successful price recovery, strict focus on cost control and
continued efficiency improvements have helped to offset the
impact
-- Leverage maintained at 1.9x, with over GBP180m of liquidity
headroom on debt facilities of GBP487.8m
Continued strategic and operational progress
-- Our UK business remains in a strong position, and our scale,
category leadership and strong customer relationships underpin the
resilience of our business model
-- The Delicious Dessert Company, our new brand launched in the
UK in April 2021, has delivered ahead of expectations and is now in
over 900 stores, successfully attracting new consumers to the
category
-- Productivity improvements from our new automated 'smart'
manufacturing system are being realised, and the remaining seven UK
sites are on-track to have this system implemented by the end of
2022
-- To support continued strong growth in the US, planned
capacity investment in our existing sites is underway
-- Continued focus on initiatives to support recruitment and
retention which have included out-of-cycle pay increases, training
programmes and launching our new values
-- Development of our 'roadmap' to reach Net Zero by 2040, and
initiatives to drive energy efficiency and reduce food waste, are
progressing well; Bakkavor received a rating of A in the recent
MSCI ESG Ratings assessment(2)
FY22 in line with management expectations
-- While the operating environment remains challenging, we are
working in partnership with our customers to mitigate the impact of
inflationary headwinds, alongside maintaining strict cost control
and enhancing productivity
-- In the UK, further price increases in the market may have
some impact on volumes, however, our category breadth and strong
pipeline of innovation mean we are well placed to underpin
growth
-- Strong volume growth is expected to continue in the US, and
whilst a lag on inflation recovery is expected to hold back margin
in the short-term, we remain positive about the margin potential
for our US business
-- The near-term outlook in China remains uncertain while the
government's zero-tolerance COVID-19 policy remains in place
-- We currently anticipate the full year outturn to be in line with management expectations
Agust Gudmundsson, CEO, commented:
"The Group has had a positive start to the year; successful
price recovery has helped offset the impact of inflation in the
period, and our teams have worked hard to deliver excellent service
levels for our customers.
"We expect the trading environment to remain challenging and for
input costs to continue to escalate. However, we remain well placed
to navigate the ongoing headwinds as our price recovery to date,
combined with our continued drive for efficiency improvements and
disciplined approach to cost control will help to mitigate the
impact. Despite further recent increasing pressure on household
budgets, we are highly focused on driving volumes across our
categories and further strengthening our customer relationships by
bringing innovation to our product ranges. We remain confident in
our medium-term growth opportunity, both in the UK and
internationally."
1. The Group defines 'like-for-like' as revenue from continuing
operations adjusted for the revenue generated from businesses
closed or sold in the current and prior year, revenue generated
from businesses acquired in the current and prior period and the
effect of foreign currency movements.
2. MSCI rating improved from BBB in 2021 to A in 2022.
ENQUIRIES
Institutional investors and analysts:
Ben Waldron, Chief Financial Officer
Emily Daw, Head of Investor Relations +44 (0) 20 7908 6114
Financial media:
Rachel Farrington, MHP Communications +44 (0) 20 3128 8613
Oliver Hughes, MHP Communications +44 (0) 20 3128 8622
Katie Hunt, MHP Communications +44 (0) 20 3128 8794
About Bakkavor
We are the leading provider of fresh prepared food ("FPF") in
the UK, and our presence in the US and China positions the Group
well in these, high-growth markets. We leverage our consumer
insight and scale to provide innovative food that offers quality,
choice, convenience, and freshness. Over 19,000 colleagues operate
from 46 sites across our three markets supplying a portfolio of
over 3,200 products across meals, pizza & bread, salads and
desserts to leading grocery retailers in the UK and US, and
international food brands in China.
LEI number: 213800COL7AD54YU9949
Disclaimer - forward-looking statements
This statement, prepared by Bakkavor, may contain
forward-looking statements about Bakkavor. These represent
expectations for the Group's business, and involve known and
unknown risks and uncertainties, many of which are beyond the
Group's control. The Group has based these forward -- looking
statements on current expectations and projections about future
events. These forward-looking statements may generally, but not
always, be identified by the use of words such as 'will', 'aims',
'anticipates', 'continue', 'could', 'should', 'expects', 'is
expected to', 'may', 'estimates', 'believes', 'intends',
'projects', 'targets', or the negative thereof, or similar
expressions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Group's current expectations and assumptions as to such future
events and circumstances that may not prove accurate. A number of
material factors could cause actual results and developments to
differ materially from those expressed or implied by
forward-looking statements. There may be risks and uncertainties
that the Group is unable to predict at this time or that the Group
currently does not expect to have a material adverse effect on its
business. You should not place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this announcement. The Group expressly
disclaims any obligation to publicly update or review these
forward-looking statements other than as required by law. Some
numbers and period on period percentages in this statement have
been rounded or adjusted in order to ensure consistency with the
financial information.
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