Good Progress By Bakkavor
Bakkavor, the UK and international provider of fresh prepared foods, increased revenue by 2.6% to £1.693 billion and adjusted EBITDA by 9% to £119.9 million for the 52 weeks ended 27 December 2014. On a like-for-like basis, excluding sold and closed businesses and at constant currency, revenue growth was 4.4%. Adjusted EBITDA margin increased by 50 basis points to 7.1% as increased volumes and productivity investments helped to support margins. The restructuring of Bakkavor’s UK business was also fundamental in reducing both cost and complexity to enable margin growth.
The restructuring of the UK businesses, which was announced earlier in the year, is already delivering greater efficiencies and a strong pipeline of new product launches. As a consequence of this restructure and other reorganisation initiatives, Bakkavor incurred exceptional charges of £6.6 million in 2014, principally arising from redundancy payments.
Agust Gudmundsson, chief executive of Bakkavor.
Agust Gudmundsson, chief executive of Bakkavor, comments: “In a tough trading environment with low market growth, the group has made good progress, increasing revenues, market share, margins and cash generation. Against a backdrop of challenging market conditions, we have continued our strategy of leadership in innovation, and close partnering with our customers.”
Once again Bakkavor outperformed the fresh prepared foods market in the UK with 4% growth in like-for-like revenues to £1.520 billion. Bakkavor’s market share has grown for the third consecutive year and importantly it has increased year-on-year revenues with all of its key customers. Growth remained predominantly volume driven as the annualised effect of business wins offset the weaker underlying market.
Bakkavor’s International business has undergone significant restructuring in the past two years with the sale of its Czech and South African operations, and the closure of its Canadian unit. As a result of these transactions, revenues, as presented on a statutory basis, declined in the period by 7.7% to £172.5 million. On a like-for-like basis however, excluding the effect of these disposals and closures and adjusting for currency movements, revenues grew by 9.5%.
