Bakkavor confident of ‘good Christmas momentum’

By Michael Stones

- Last updated on GMT

Ceo Agust Gudmundsson said the business approached Christmas with 'good momentum'
Ceo Agust Gudmundsson said the business approached Christmas with 'good momentum'
Fresh prepared foods manufacturer Bakkavor expects good Christmas sales despite tough trading conditions arising from the continuing sharp competition between retailers, according to its third quarter results for the 39 weeks to September 26 2015.

Bakkavor posted third-quarter revenue up by 3% to £408.7M, with year-to-date revenue reaching £1,221.1M.

Rose by 16%

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 16% over the quarter to £30.9M and by 12% to £85.8M in year-to-date results.

Ceo Agust Gudmundsson said: “The group has reported an excellent set of results with revenue growth, margin improvement and strong cash conversion.

“We expect trading conditions to remain challenging, particularly due to intense retailer competition, however we approach the Christmas period with good momentum and we remain confident in our strategy for the future.”

International business

Bakkavor’s revenue growth was underpinned by a strong performance from its international business, he added.

Strict cost control and efficiency benefits were said to have resulted in an improved EBITDA margin.

The manufacturer’s debt to equity ratio – known as leverage ratio – was down to 3.3 times, what the firm termed “strong cash conversion through excellent working capital management”.

Meanwhile, yesterday (Monday, November 23), Bakkavor announced the creation of 160 full-time jobs​ at its Newark desserts factory.

Bakkavor’s head of human resources for desserts Caron Brooks said: “Now is a really exciting time for Bakkavor Desserts Newark as we continue to grow from strength­-to-­strength and this is demonstrated by the sheer scale of our recruitment drive.”

In July the manufacturer completed the sale of its Italian pizza business​ to Dreamfood.

Bakkavor results – at a glance

  •  Third-quarter revenue up by 3% to £408.7M
  • Year-to-date revenue reached £1,221.1M
  • EBITDA up by 16% to £30.9M in third quarter
  • Year-to-date EBITDA up by 12% to £85.8M
  • Leverage ratio down to 3.3 times

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