Prepared food group Bakkavor has reported a 10.3% increase in reported revenue in the first half of its financial year, to £1.01 billion (€1.17 billion), with like-for-like revenues up 9.2%.
Operating profit was down 9.5% at the food business, with Bakkavor saying that its international business has been impacted by inflation and COVID-19 restrictions, while its UK performance was 'broadly in line' with the previous period.
In its core UK market, revenue rose by 7.9% in the period, which was largely driven by price increases, the group said.
In order to mitigate the impact of inflation, the group 'successfully executed pricing and cost actions, along with productivity improvements', it noted.
Like-for-like revenues in the US were up 34.6%, with Bakkavor citing 'strong demand' for its products, however its China operations were 'severely impacted' by the re-introduction of pandemic restrictions.
'Strong' Operational Delivery
“Against a backdrop of macro uncertainties and inflationary headwinds, our operational delivery has been strong and we have continued to deliver for our customers," commented Agust Gudmundsson, chief executive.
"This, once again, demonstrates the continuing resilience of the Group, underpinned by the strength of our customer partnerships, supply chain management, scale and category leadership."
Looking ahead, Bakkavor said that it 'remains confident' in delivering adjusted operating profit within expectations, adding that while inflation and consumer headwinds are likely to continue into next year, the business remains 'well-placed' to continue to drive positive performance.
“We remain confident in our ability to deliver a full year performance in line with the range of market expectations as we continue to focus on managing costs, price recovery, and driving demand in our categories," Gudmundsson added.
"The current geo-political uncertainty, however, will result in significant levels of inflation and consumer spending headwinds persisting through 2023."
© 2022 European Supermarket Magazine – your source for the latest A Brands news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.