Bakkavor results boosted by ‘constant innovation’

By Michael Stones

- Last updated on GMT

Bakkavor boss Agust Gudmundsson attributed growth to investment, improved efficiency and constant innovation
Bakkavor boss Agust Gudmundsson attributed growth to investment, improved efficiency and constant innovation

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Ready meal specialist Bakkavor has reported revenue growth across the group due to “constant innovation” in third-quarter results, says ceo Agust Gudmundsson.

Like-for-like revenue rose by 3% to £427.1M compared with the same period last year during the 13 weeks to September 24 2016. Year-to-date like-for-like revenue was also 3% up at £1.27bn.

Adjusted earnings before interest tax, tax, depreciation and amortisation (EBITDA) were 5% up at £37.6M over the quarter. Year-to-date adjusted EBITDA was 14% up at £109.5bn.

UK revenues

Third-quarter UK revenues reached £390.6M – a like-for-like rise of 2.8%. Bakkavor said the increase was in line with the wider fresh prepared food market.

Accelerated capital expenditure was said to be supporting continuing growth. And there had been a further reduction in leverage, or borrowing, down to 2.7 times.

Bakkavor’s recipe for success

  • Continued investment
  • Focus on efficiency
  • Constant innovation

Gudmundsson said: “We are pleased that we have delivered another strong quarter, with good growth in both revenue and EBITDA across the group. Our success is driven by our continued investment in our business, a focus on efficiency and constant innovation.”

The manufacturer explained in a statement accompanying the results: “Benefiting from a strong innovation pipeline, we continued to see good volumes with all our key customers over the period.​The firm was said to have secured a number of business wins across core categories, which were expected to boost growth further.

‘Cost pressures’

But the Bakkavor boss anticipated further challenging times in the food sector.

“Looking ahead, our sector faces a number of challenges from increasing inflation and cost pressures, but our strong operational model and strong partnerships with our customers mean that we are well placed to continue the progress of recent years,” ​he said.

Meanwhile, in September the manufacturer launched a recruitment drive hire new staff for 40 full-time roles​ at its soups and sauces factory in Spalding, Lincolnshire. Bakkavor was looking for staff to work in roles such as: cooking, filling, hygiene and dispatch.

Bakkavor, founded by brothers Agust and Lydur Gudmundsson, now employed more than 18,000 people worldwide, producing more than 5,000 products in 18 different categories.

In the UK, the manufacturer claimed to be number one producer in 12 of the 16 categories it supplies to the market. It customers included: Tesco, Marks & Spencer, Waitrose, Sainsbury, Asda and the Co-op.

Bakkavor results – at a glance

  • Third quarter like-for-like revenue up 3% to £427.1M
  • Year-to-date like-for-like revenue up 3% to £1.27bn
  • Third quarter EBITDA up 5% at £37.6M 

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