Bakkavor Group PLC Trading Statement (6091L)
January 14 2021 - 2:00AM
UK Regulatory
TIDMBAKK
RNS Number : 6091L
Bakkavor Group PLC
14 January 2021
14 January 2021
Bakkavor Group plc
Trading update
A strong and resilient performance in unprecedented
conditions
Bakkavor, the international provider of fresh prepared food
(FPF), provides an update on trading for the 52 weeks ended 26
December 2020, ahead of its full-year results announcement on 16
March 2021.
At a Group level, the encouraging recovery in sales reported at
the end of H1 continued into the second half, with Group revenue
for the full year 4.9% lower than the prior year and 4.9% lower on
a like-for-like basis.
In the UK, we were reassured by a recovery in sales as the first
COVID-19 lockdown was lifted, however, volumes were adversely
impacted in the final quarter by further restrictions, particularly
within the 'Food to go' category. Forward planning and preparation
for the all-important Christmas period enabled us to maintain very
high customer service levels and deliver Christmas volumes in line
with the prior year. Overall, UK like-for-like sales for the full
year were 5.3% lower than last year.
Looking at our International segment, the US business grew by
12.7% on a like-for-like basis as we benefited from the growing
trend for FPF and greater collaboration with our customers. This
revenue uplift, together with a strategic restructuring of our
operations, has led to a turnaround in performance and secured
sustainable and profitable growth for the second half of the
year.
The growth reported within the US was, however, offset by a
decline in revenues of 21.6% in China; our business most severely
impacted by the pandemic. Whilst we continued to see reduced demand
in Hong Kong due to ongoing civil unrest, we saw a steady
improvement in sales in mainland China in the second half of the
year, giving us confidence in the overall recovery in the
region.
Decisive mitigating actions were taken to lower our cost base
and preserve cash at an early stage of the pandemic. We rapidly
adapted factory operations and completed strategic restructurings
in all regions to accommodate lower volumes. As a result, when
combined with improved trading in H2, the Group believes it will
deliver adjusted EBITDA (pre IFRS 16) for the full year broadly in
line with the GBP138m reported in the prior year. Furthermore, we
maintained our focus on cash management, which included a temporary
reduction in non-essential capital expenditure and a suspension of
dividend payments. We therefore continue to operate with
significant headroom of GBP200m against our debt facilities of
GBP537.5m.
Thorough planning ensured we were well-prepared ahead of the
UK's exit from the European Union on 31 December 2020. We worked
closely with suppliers and customers to put in place processes to
mitigate any adverse risk to supply, and we continue to support
colleagues in obtaining UK settled status. Although it is early
days, these measures have minimised disruption to our business and
our supply chain continues to operate effectively.
Agust Gudmundsson, Chief Executive Officer, said:
"These are unprecedented times but the hard work and dedication
of our teams, together with our scale and long-standing customer
relationships, has delivered a strong and resilient performance. I
am incredibly proud of our colleagues who have gone above and
beyond in the toughest of circumstances. Their performance has been
exceptional and I would like to thank them once again.
"Notwithstanding the ongoing impact of COVID-19, we have a sound
business model and solid platform that leaves us well placed to
navigate the current environment and achieve long-term sustainable
growth."
ENQUIRIES
Institutional investors and analysts:
Ben Waldron, Chief Financial Officer
Sally Barrett-Jolley, Head of Corporate
Affairs +44 (0) 20 7908 6143
Media
Tulchan Communications +44 (0) 20 7353 4200
Will Smith, Will Palfreyman
ABOUT BAKKAVOR
Bakkavor is the leading provider of fresh prepared food ("FPF")
in the UK, with a growing international presence in the US and
China. The Group is the number one by market share in the UK in the
four FPF product categories of meals, salads, desserts and pizza
& bread, providing high-quality, fresh, healthy and convenient
food. Its customers include some of the UK's leading grocery
retailers, including Tesco, Marks & Spencer, Sainsbury's and
Waitrose. The Group's International segment operates in the US and
China. Bakkavor was founded in 1986 and has its headquarters in
London. The Group has over 20,000 employees and operates 23
factories in the UK, 5 in the US and 9 in China.
DISCLAIMER - FORWARD-LOOKING STATEMENTS
This statement, prepared by Bakkavor Group plc (the "Company"),
may contain forward-looking statements about Bakkavor Group plc and
its subsidiaries (the "Group"). Forward-looking statements involve
uncertainties because they relate to events, and depend on
circumstances, that will, or may, occur in the future. If the
assumptions on which the Group bases its forward-looking statements
change, actual results may differ from those expressed in such
statements. Forward-looking statements speak only as of the date
they are made, and the Company undertakes no obligation to update
these forward-looking statements. Nothing in this statement should
be construed as a profit forecast. Some numbers and period on
period percentages in this statement have been rounded or adjusted
in order to ensure consistency with the financial information.
LEI number: 213800COL7AD54YU9949
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END
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