TIDMBAKK
RNS Number : 2656H
Bakkavor Group PLC
23 November 2022
23 November 2022
Bakkavor Group plc
Q3 2022 trading update
Robust Q3 performance; full year within expectations
Bakkavor Group plc (the "Company") and its subsidiaries
("Bakkavor" or "the Group"), the leading international provider of
fresh prepared food ("FPF"), today updates on trading for the 13
weeks to 25 September 2022 ("Q3 2022") and guidance for the full
year.
Q3 2022 9 months 2022
---------------------------------------- --------------------------------------
Like-for-like
Reported (1) ('LFL') LFL Reported LFL
GBP million revenue Growth revenue growth revenue Growth LFL revenue growth
------------ -------- ------ ------------- ------- -------- ------ ----------- -------
Group 542.5 15.3% 530.5 12.7% 1,552.7 12.0% 1,530.7 10.4%
UK 445.3 11.9% 445.3 11.9% 1,294.8 9.2% 1,294.8 9.2%
US 67.5 46.3% 58.3 26.3% 184.1 44.5% 167.6 31.6%
China 29.7 12.9% 26.9 1.5% 73.8 0.7% 68.3 (7.1%)
------------ -------- ------ ------------- ------- -------- ------ ----------- -------
Robust Q3 revenue growth in line with expectations; continue to
navigate a challenging trading environment
-- Robust growth in reported revenue, up 15.3% to GBP542.5m, with LFL revenue up 12.7%.
-- UK LFL revenue growth largely driven by price. Volumes held
up through the Summer and, although pressure on household budgets
impacted volumes in September, we outperformed the FPF market and
gained market share.
-- Strong US revenue momentum reflects sustained demand and
price increases also taking effect. Operational performance has,
however, remained challenging due to disruption as significant
volumes were onboarded.
-- Volumes in China have continued to recover, with LFL revenue
ahead of FY21, and this has supported some margin improvement.
-- Ongoing Group-wide mitigation of inflationary headwinds
through price recovery, productivity improvements and tight cost
control.
-- Retained significant liquidity headroom against core debt
facilities. Interest rate swaps provide a good level of protection
against rate increases through to March 2024.
FY22 outlook within the range of market expectations(2)
-- The Group has continued to trade in line with market
expectations, and preparations for the Christmas period are
progressing in line with our plan.
-- There has been a recent threat of industrial action at one of
our UK sites, and we have now reached an agreement with the offer
being recommended by the union to the workforce.
-- In the US, a reduction in volume due to a contractual dispute
with a customer is expected to impact profits in the remaining
weeks of the year.
-- As a result, we expect Group adjusted operating profit for
FY22 to remain within, but at the lower end of the range of market
expectations(2) .
Clear plans in place to protect profits against sustained
headwinds into 2023
-- Macro-headwinds will persist through 2023, we are therefore
taking decisive action to protect future profits. Our plan is
focused on three areas:
1. Leaner organisation structure: new Management Board and
leadership structure with renewed focus and purpose; operationally
align UK business to two sectors driving further synergies.
2. Clear and focused regional priorities:
UK - leveraging operational scale through footprint
rationalisation, with two proposed site closures; collaborating
with customers on inflation recovery and value optimisation.
US - a renewed focus on operational performance to support
margin improvement.
China - rebuilding volume to leverage our well invested platform
for growth.
3. Enhanced focus on managing cash: Reviewing capital plans to
target efficiency improvements; remain committed to strategic
investments; driving working capital benefits.
-- Our plan to protect future profits is expected to deliver
savings of GBP15m in FY23, and GBP25m on an annualised basis(3) .
Cash costs of implementation are estimated at GBP20m. These costs,
together with asset impairment charges, will be recognised as
exceptional costs in FY22, whilst most of the cash outflow will be
in FY23.
Mike Edwards, CEO, commented:
"We continue to operate in an incredibly challenging
environment. Bakkavor has proven itself to be a resilient business
effectively navigating the turbulence of recent years. We are now
taking further decisive action to ensure we deal with the ongoing
headwinds and protect future profits.
"These actions, combined with our strong balance sheet, breadth
of capability and products, customer relationships and growing
market share, means we are well-placed to deal with the short-term
challenges, and deliver our longer-term ambitions for colleagues
and stakeholders."
1. The Group defines 'like-for-like revenue' as revenue from
continuing operations adjusted for the revenue generated from
businesses closed or sold in the current and prior year, revenue
generated from businesses acquired in the current and prior period,
and the effect of foreign currency movements.
2. Based on company compiled consensus ("Consensus") which
includes the following institutions; Berenberg, Citi, Goodbody,
HSBC, Investec, Kepler, Numis and Peel Hunt. Group adjusted
operating profit consensus range for 2022 of GBP88.6m to GBP91.7m,
with consensus at GBP90.3m. Last updated on 22 November 2022.
3. Our plan includes the proposal to close two sites, as
previously reported on our website on 9 November 2022.
Consultations at both sites are underway and therefore no final
decisions have been made.
ENQUIRIES
Institutional investors and analysts:
Ben Waldron, Chief Financial Officer
Emily Daw, Head of Investor Relations +44 (0) 20 7908 6114
Financial media: bakkavor@mhpgroup.com
Katie Hunt, MHP +44 (0) 20 3128 8794
Rachel Farrington, MHP +44 (0) 20 3128 8613
Oliver Hughes, MHP +44 (0) 20 3128 8622
About Bakkavor
We are the leading provider of fresh prepared food ("FPF") in
the UK, and our presence in the US and China positions the Group
well in these, high-growth markets. We leverage our consumer
insight and scale to provide innovative food that offers quality,
choice, convenience, and freshness. Over 19,000 colleagues operate
from 46 sites across our three markets supplying a portfolio of
over 3,200 products across meals, pizza & bread, salads and
desserts to leading grocery retailers in the UK and US, and
international food brands in China.
LEI number: 213800COL7AD54YU9949
Disclaimer - forward-looking statements
This statement, prepared by Bakkavor, may contain
forward-looking statements about Bakkavor. These represent
expectations for the Group's business, and involve known and
unknown risks and uncertainties, many of which are beyond the
Group's control. The Group has based these forward -- looking
statements on current expectations and projections about future
events. These forward-looking statements may generally, but not
always, be identified by the use of words such as 'will', 'aims',
'anticipates', 'continue', 'could', 'should', 'expects', 'is
expected to', 'may', 'estimates', 'believes', 'intends',
'projects', 'targets', or the negative thereof, or similar
expressions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Group's current expectations and assumptions as to such future
events and circumstances that may not prove accurate. A number of
material factors could cause actual results and developments to
differ materially from those expressed or implied by
forward-looking statements. There may be risks and uncertainties
that the Group is unable to predict at this time or that the Group
currently does not expect to have a material adverse effect on its
business. You should not place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this announcement. The Group expressly
disclaims any obligation to publicly update or review these
forward-looking statements other than as required by law. Some
numbers and period on period percentages in this statement have
been rounded or adjusted in order to ensure consistency with the
financial information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTBTBFTMTATBPT
(END) Dow Jones Newswires
November 23, 2022 02:00 ET (07:00 GMT)
Bakkavor (LSE:BAKK)
Historical Stock Chart
From Apr 2024 to May 2024
Bakkavor (LSE:BAKK)
Historical Stock Chart
From May 2023 to May 2024