Prepared food firm Bakkavor Group expects increased profitability in 2024 after its profits exceeded expectations in full-year 2023.
Like-for-like revenue at Bakkavor increased 5.3% to £2.2 billion, driven by price, as well as volume recovery in China, according to a trading update issued by the company.
In the UK, the company continued to win market share, helped by strong service, targeted innovation and net business gains.
The US division returned to profit in the second half after breaking even in the first half.
Bakkavor rebuilt volumes in China and continued to diversify into the retail channel during the financial year.
The group expects adjusted operating profit for its financial year 2023 to be at least in line with the upper end of the range of market expectations between £89.7 million to £91.1 million.
Chief executive, Mike Edwards 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.”
Outlook 2024
Bakkavor's is confident that 2024 will be another year of increased profitability and it will focus on leverage reduction, despite increasing capital investment.
Revenue in FY 2024 is projected to be slightly ahead of 2023 as volumes could remain subdued given the continued challenging consumer environment in the UK and the reshaping of its US business.
Edwards added, “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.”
Bakkavor will publish its full year results on 5 March 2024.
Elsewhere, BP-PE5 L.L.C., an affiliate of the Boston-based investment manager Baupost Group, has sold 100% of its shareholding in Bakkavor Group to LongRange Capital Fund I, L.P.
