Fresh prepared food maker Bakkavor Group has reported robust financial performance in 2021, despite unprecedented challenges in the form of supply chain constraints, labour shortages, and cost inflation.
Bakkavor and its subsidiaries made the announcement in a trading update for the 52 weeks to 25 December 2021, ahead of its full-year results to be announced on 8 March 2022.
Bakkavor Group Performance
Bakkavor Group's reported revenue saw 4.4% year-on-year growth, while like-for-like revenue increased by 6.2% compared to 2020 and by 1.2% compared to 2019.
Operating margin is expected to be ahead of previous guidance and at the top end of the range of current market expectations of 5.0% to 5.2%, the company said.
As industry-wide challenges intensified in the last quarter of 2021 and continued into 2022, the group plans to work closely with customers and suppliers to mitigate the ongoing impact.
Improved trading performance has supported a reduction in net debt and brought leverage within medium-term target range at 1.9 times.
The company added that its liquidity position remained strong, with significant headroom of over £190 million against its debt facilities of £489 million, of which the majority mature in 2025.
In 2021, the group saw strong sales momentum in the UK as lockdown restrictions eased and frequency of shopping visits returned, it said.
A new range of products supported the reinvigoration of the group's categories and the Bakkavor Group hopes it will continue to drive growth.
All categories, except for salads, were in growth compared to 2019, driven by strong underlying performance, new product launches, and seasonal events.
While salads volumes were more severely impacted by lockdown restrictions and subsequently constrained by labour availability through the summer, the category recovered through the year.
In the UK, overall like-for-like sales increased by 2.9% compared to 2020, and were down 2.3% compared to 2019.
In the US, Bakkavor Group saw positive momentum through the period, supported by growth in grocery retail and online customers.
Revenue increased 31.8% on a like-for-like basis compared to 2020 and 48.4% compared to 2019.
In China, the company said that it continued to see steady progress despite ongoing regional restrictions, impacting volumes, particularly in the second half.
Like-for-like revenue increased 24.6% compared to 2020, and was down 2.4% compared to 2019.
With the strategic investment across the group's business in China largely complete, Bakkavor hopes for significant headroom for growth in the future.