Bakkavor Group plc, a leading international provider of fresh prepared food, has announced its unaudited half-year results for the 26-week period ended 1 July 2023. The company reported a strong financial performance, with like-for-like revenue up 7.4% and reported revenue up 7.9%. Adjusted operating profit increased by 2.1% to £43.4 million, while operating profit rose by 12.7% to £46.3 million. Bakkavor also generated strong free cash flow of £51.6 million and reduced its operational net debt by £16.2 million. The company's basic earnings per share remained unchanged at 4.4p, and an interim dividend of 2.91p was declared, representing a 5.0% increase from the prior period.
Bakkavor attributed its strong performance to its restructuring plans across three focus areas: a leaner organisational structure, clear and focused regional priorities, and enhanced cash management. The company's UK segment outperformed the market, with volume recovery and price recovery mitigating inflation. In the US, the business stabilized, and operational improvement plans began to deliver results. In China, volume recovery led to reduced operating losses, and the company simplified operations through an associate disposal. Bakkavor's actions are expected to deliver £17 million in savings in FY23, ahead of the initial forecast of £15 million.
The company expressed confidence in a strong full-year performance and upgraded its outlook. Bakkavor anticipates that its adjusted operating profit for FY23 will be at least in line with the prior year of £89.4 million, which is approximately £4 million ahead of current consensus. The revised outlook is supported by restructuring savings, a strong pipeline to support UK share gains, ongoing volume recovery in China, and strong cash generation that is expected to further improve net debt.
Mike Edwards, CEO of Bakkavor Group, expressed satisfaction with the company's strong performance in the first half and the momentum it has created. He credited the company's employees for their hard work and commitment. Edwards highlighted the market share gains in the UK and the progress made in the US and China. He stated that the company is in a strong position to capitalize on opportunities and is confident in delivering an upgraded full-year performance.
A copy of the results is available on the company's website, and a presentation to analysts will be held on September 6, 2023.