TIDMBAKK
RNS Number : 0541A
Bakkavor Group PLC
18 January 2024
Full year 2023 trading update
2023 profits, net debt and leverage ahead of market expectations
with encouraging outlook for 2024
Bakkavor Group plc ("Bakkavor" or the "Group"), the leading
international provider of fresh prepared food ("FPF"), today
updates on trading for the 52 weeks to 30 December 2023 ("FY23"),
ahead of the publication of its full year results on 5 March
2024.
Like-for-like
Reported (1) ('LFL')
GBP million revenue Growth revenue LFL growth
------------ -------- ------- ------------- ----------
Group 2,203.8 3.0% 2,214.2 5.3%
UK 1,852.7 3.9% 1,852.7 5.7%
US 229.4 (10.1%) 230.6 (8.4%)
China 121.7 20.7% 130.9 32.0%
------------ -------- ------- ------------- ----------
2023 profits, net debt and leverage all expected to be ahead of
market expectations
-- LFL revenue up 5.3% driven by price, as well as volume recovery in China
-- UK: Continued to win market share, driven by strong service,
targeted innovation and net business gains
-- US: As previously guided, focus shifted from revenue growth
to profit, with a return to profitability in H2 after a break-even
H1
-- China: Seamlessly built back volumes and continued to
diversify into the retail channel, importantly the business is now
cash generative and self-sustaining
-- Our Group-wide plan to protect profitability, which we
enacted in November 2022, has delivered synergies and efficiencies
ahead of our expectations
-- The Group anticipates FY23 Group adjusted operating profit to
be at least in line with the upper end of the range of market
expectations(2)
-- Our focus on working capital improvement, combined with a
targeted approach to capital expenditure, delivered a further
reduction in operational net debt in the second half, with the full
year outturn significantly ahead of market expectations(3) , at c.
GBP230m. As a result, leverage is also ahead of expectations
Encouraging outlook for 2024
-- Momentum is building in all three regions, with refreshed
priorities providing clear direction to our local teams, which will
underpin delivery in 2024
-- 2024 revenue to be slightly ahead of 2023, as we expect
volumes to remain subdued given the continued challenging consumer
environment in the UK and the reshaping of our US business
-- Despite this, we are confident 2024 will be another year of
increased profitability as we continue to effectively mitigate
inflation and drive internal improvements
-- We will continue our focus on leverage reduction, despite
increasing capital investment, through sustaining working capital
improvements and increasing profitability
Development in the Group's ownership structure
-- As announced on 15 January 2024, Baupost, who previously held
a significant shareholding (20.1%) in the Group, have now sold this
entire stake to LongRange Capital
-- Bob Berlin, who leads LongRange, will join the Board as
Patrick Cook (Baupost's representative) steps down
-- Bob previously held a position on our Board, between January
2016 and July 2018. He has a wide range of experience holding a
number of strategic roles in the consumer goods, food, technology
and financial sectors
Mike Edwards, CEO, commented:
"2023 required us to develop a decisive and dynamic plan to
successfully manage another year of external challenges. We
executed this plan at pace and as a result we expect to deliver
improved profitability and reduced leverage for the full year.
As we enter 2024, momentum is building in all three regions,
which gives us confidence to deliver further financial improvements
in the year ahead. This is clearly important as unprecedented
levels of inflation have impacted profit margins over the last two
years.
I would like to take this opportunity to thank everyone at
Bakkavor for their continued commitment and energy during a year of
significant change, which saw the Group exceed expectations and set
a clear path for delivery in 2024.
Finally, I would like to extend a warm welcome to Bob Berlin,
who rejoins our Board representing LongRange capital. He has a deep
understanding of our business as well as our markets and his
experience will be invaluable as we continue to build positive
momentum and deliver our strategic ambition."
1. LFL revenue adjusts reported revenue to exclude the
additional 53(rd) trading week in FY22 and adjusts for the effect
of foreign currency movements.
2. Based on company compiled consensus ("Consensus") which
includes; Citi, Goodbody, HSBC, Investec, Kepler, Numis and Peel
Hunt. Adjusted operating profit Consensus for 2023 of GBP90.2m,
with a range of GBP89.7m to GBP91.1m.
3. Based on company compiled consensus ("Consensus") which
includes; Citi, Goodbody, HSBC, Investec, Kepler, Numis and Peel
Hunt. Operational net debt Consensus for 2023 of GBP273.6m, with a
range of GBP256.4m to GBP298.2m.
ENQUIRIES
Institutional investors and analysts:
Ben Waldron, Chief Financial Officer
Richard Wooldridge, Interim Head of Investor Relations +44(0)20 7908 6114
Financial media: bakkavor@mhpgroup.com
Katie Hunt, MHP +44(0)20 3128 8100
+44(0)7884 494112
Rachel Farrington, MHP +44(0)7801 894577
Oliver Hughes, MHP +44(0)7885 224532
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 18,500 colleagues operate
from 44 sites across our three markets supplying a portfolio of
over 2,900 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 includes forward-looking statements. By their
nature, forward-looking statements involve risk, uncertainty and
other factors, which may cause the actual results and developments
of the Group to differ materially from any results and developments
expressed or implied by such forward-looking statements. You should
not place undue reliance on any forward-looking statements. These
forward-looking statements are made as of the date of this
statement. The Group is under no obligation to publicly update or
review these forward-looking statements other than as required by
law.
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END
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