Bakkavor Group PLC, a leading international provider of fresh prepared food, has released its Q1 2024 trading update, showcasing a robust performance and positive momentum that has led to an improved outlook for the fiscal year 2024. The Group reported a like-for-like revenue growth of 3.2%, amounting to £543.3 million, with the UK driving the majority of this growth. The UK segment saw a 4.1% increase in revenue, supported by strengthening volumes, successful innovation, and improved consumer confidence. In the US, revenue reduction was in line with expectations as the region focused on accelerating profit improvement. Meanwhile, China experienced a return to more normalized levels of like-for-like growth, with a 9.8% increase in revenue. The Group's strong profit performance was driven by volume growth in the UK and a continued focus on operational efficiency across all segments.
The company also reported a reduction in leverage to 1.4x, underpinned by improvements in profitability and working capital. This strong financial performance was mirrored in non-financial key performance indicators, with significant progress in food waste reduction, carbon emissions, and voluntary employee turnover. As a result of the positive Q1 performance, Bakkavor Group PLC has upgraded its guidance for full-year adjusted operating profit, now expecting a range of £103m to £108m. This improved outlook is based on further synergies and efficiencies in the UK, accelerating profit improvement in the US, and stability in China, which continues to be cash generative and self-funding.
Following the Q1 results, the company completed two strategic transactions. In April, Bakkavor sold its bakery business in China, simplifying its operations in the region and leading to a profit on disposal of approximately £3.5m. In May, the company acquired Moorish, a brand with around £2m in revenue that supplies houmous to UK retail, complementing its dips business and providing an opportunity to extend the brand into a broader range of Mediterranean products.
Mike Edwards, CEO of Bakkavor Group PLC, expressed confidence in the company's increased guidance for 2024, attributing the strong Q1 performance to the momentum created by the dynamic plan executed in the previous year. He emphasized the excellent progress made across all regions against the Group's strategic priorities and thanked the entire Bakkavor team for their commitment and dedication in delivering for customers and shareholders.
Bakkavor Group PLC operates in the UK, US, and China, supplying a portfolio of over 3,000 products across meals, pizza & bread, salads, and desserts to leading grocery retailers in the UK and US, as well as international food brands in China.