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Bakkavor sales growth slows but full-year targets unchanged
Prepared food producer Bakkavor Group said it expected slower sales in the first four and a half months of the year to reverse as market conditions improve and new business rolls in later in the year.
Bakkavor, which makes microwave meals, sandwiches, salads and desserts for the likes of Tesco, Sainsbury's, Marks & Spencer and Waitrose, said trading for the 19 weeks to 12 May had been in line with management's expectations, with revenue up 1.5% on a like-for-like basis against last year. This was down from a 5.4% LFL growth rate in 2017.
"Overall, management expectations for the full year remain unchanged," the FTSE 250 company assured, saying UK growth has been hit by ongoing retail price inflation. Bakkavor, which floated in November with a £100m fundraising, said at its annual results announcement in February that volume growth was being affected by UK consumers reacting to significant inflationary pressure in the market.
In a statement ahead of its annual shareholder meeting on Wednesday, directors said they have mitigating cost inflation by staying strict on costs and extracting its efficiency benefits from its ongoing capital investment programme.
"We continue to expect revenue to benefit from improved market conditions and new business later in the year. Growth in our international businesses remained strong, driven by the success of new products and increased consumer demand," they added.
Construction of four "key" developments in the UK, US and China was "progressing as planned", with all four expected to be operational later in the year.