Like-for-like revenue was 3% up at £425.9M, while earnings before interest, tax, depreciation and amortisation (EBITDA) were 15% up at £27.3M.
Bakkavor ceo Agust Gudmundsson said: “We continued the group’s positive performance through this latest quarter with a year-on-year improvement in revenues, margin and cash generation.
“Our strategy of focusing on the UK, US and Asia is working well and we are excited about our recent US acquisition [of B Robert’s Foods], the first since 2008.”
Pizza, salads and bread
Bakkavor’s UK business delivered revenue of £372.2M – an increase of 2% on the same quarter of last year. The growth was driven by improved volumes in pizza, salads and bread, said the firm.
“While our UK business has benefited from deflation across a broad range of raw materials, we continue to see pressure on labour costs in a period of rising employment,” it said a statement accompanying the results.
The manufacturer posted exceptional charges of £1.1M during the quarter relating to its decision to “resign from its low-margin” prepared fruit business. The closure of Yorkshire Fresh Fruit, threatening 445 jobs, was announced in January. Production at the business is expected to end this month.
Bakkavor’s international business delivered like-for-like growth of 14% with revenue of £53.3M. EBITDA rose by 127% to £3.4M.
Despite recovering consumer confidence and continuing low inflation, Bakkavor predicted more challenges, as shoppers responded to “unprecedented structural changes.” In response, the business pledged to focus on its strategic priorities of close partnership with customers and investment to drive growth and innovation.
Meanwhile, Bakkavor acquired the US own-label, fresh prepared foods manufacturer B Robert's Foods in January for an undisclosed sum.
Acquiring the business was said to be in line with its strategy to build a growing presence in the fresh prepared foods sector. Based in Charlotte, North Carolina B Robert’s employed about 240 people and was founded more than 20 years ago.
Commenting on the deal, Gudmundsson said in January: “The acquisition reinforces our commitment to seek growth opportunities within the US market and complements our existing operations in California and Pennsylvania. We are excited to be working with the team in Charlotte on the next stage of the development of our business.”
- May: 3% rise in first quarter like-for-like revenue
- April: Installs spiral pizza chiller
- April: Sells remaining Italian pizza business
- April: Upgraded credit rating
- April: Completes refinancing deal
- February: Closure announced of Yorkshire Fresh Fruit, threatening 445 jobs
- January: Acquires US firm B Robert’s Foods