Bakkavor trading in line; UK performance solid, China weak

Food provider Bakkavor hailed a solid full-year performance on Thursday, in line with expectations, as it posted record revenues.

In an update on trading for the 53 weeks to the end of December, the company said group reported revenue exceeded £2bn for the first time, up 14.3% on the previous year, with like-for-like revenue ahead 10.6%. This was driven primarily by price in the UK, along with strong volume growth in the US, while volumes in China were affected by Covid.

FY22 adjusted operating profit remains in line with market expectations of £88.6m. "Whilst we have been successful in largely mitigating inflation through pricing and internal levers, there has been some impact on profits, which are down year-on-year," Bakkavor said.

"This reflects a solid performance in the UK; market share gains underpinned by high service levels and breadth of product portfolio, and Christmas trading in line with expectations and well-executed operationally."

Bakkavor said its performance in the US was hit by disruption from taking on board volume growth and, as reported in its third-quarter update, a contractual dispute with a customer at one site since November.

Chief executive Mike Edwards said: "Despite 2022 being another challenging year, Bakkavor delivered a robust performance and once again demonstrated the strength of our customer relationships and the resilient foundations of our business.

"Whilst market challenges will persist in 2023, the actions we are taking to protect profits, our clear strategy and our balance sheet strength, allow us to move forward with purpose and confidence, enabling us to deliver on our medium- to long-term ambitions."