Prepared foods manufacturer Bakkavor is witnessing an encouraging recovery in sales despite restrictions due to the COVID-19 pandemic, the company said in a trading update.
As lockdown restrictions eased in the UK in March, shopping visits to stores became more frequent with a steady return to more normalised shopping habits, the company noted.
The company’s like-for-like (LFL) sales in the UK were down 6.4% for the quarter ended 27 March. However, in March alone, the LFL sales decline was only 3.5%.
The overall group revenue declined 4.4% year-on-year during the quarter (-2.6% on a like-for-like basis), Bakkavor added.
In the US, Bakkavor continued to experience strong like-for-like sales growth of 17.9%, in line with the levels reported at the end of 2020.
The company plans to accelerate investments in the division to meet the demand for freshly prepared meal solutions.
In China, the company recovered much of the volumes lost in mainland China, with first-quarter sales up 56.2% year-on-year.
However, demand in Hong Kong remains low due to due to ongoing lockdown restrictions.
The company has opened a new site in Wuhan to replace its existing factory to strengthen production capacity.
‘Robust’ Financial Position
Bakkavor said that it is in a ‘robust’ financial position and has demonstrated a resilient financial performance by restricting costs and focusing on cash, which has led to a reduction in net debt.
The company’s board is confident about the group’s liquidity position on the back of improved visibility in sales for the coming months.
The board will recommend the previously suspended final dividend payment for 2019 of 4 pence per share at its AGM on 25 May 2021.