Bakkavor in "great shape" ahead of planned takeover by Greencore

(Alliance News) - Bakkavor Group PLC on Wednesday said it was on track to deliver profit towards the upper end of guidance and hit a margin target one year ahead of schedule after of its proposed takeover.

The London-based manufacturer and distributor of fresh prepared foods said pretax profit from continuing operations dropped 41% to GBP24.6 million in the 26 weeks to June 28 from GBP41.8 million the year prior, on revenue little changed at GBP1.08 billion compared to GBP1.07 billion.

Adjusted operating profit grew 9.8% to GBP61.5 million from GBP56.0 million the year prior, with an adjusted operating profit margin of 5.7%, improved from 5.2%.

Group free cash flow was GBP47.3 million, down 5.9% from GBP53.2 million, while net debt fell 7.0% to GBP194.8 million from GBP201.8 million.

Bakkavor said like-for-like revenue was up 1.2%, driven by strong US volume growth and prices in the UK.

Reflecting the "excellent" strategic progress, the firm expects accelerated delivery of the 6% margin target, one year ahead of plan.

"The business is in great shape, with momentum expected to continue in the second half and we now expect to deliver towards the upper end of our previously guided FY25 profit range," said Chief Executive Mike Edwards.

Bakkavor said the guidance range for full-year adjusted operating profit from continuing operations is GBP120 million to GBP126 million.

In the financial year to December 28, 2024, the firm reported adjusted operating profit of GBP113.6 million.

On Monday, the UK Competition & Markets Authority confirmed it has launched a formal phase 1 inquiry into the acquisition of Bakkavor by Greencore Group PLC.

The two convenience food providers, both FTSE 250 listings, had announced their agreed merger back in May. Dublin-based Greencore will buy Bakkavor in a cash-and-shares deal that valued Bakkavor at GBP1.2 billion at the time. Greencore will pay 85 pence in cash, plus 0.604 of a new Greencore share for each Bakkavor share.

Shares in Bakkavor were down 0.9% at 226.00p each in London on Wednesday morning.

By Jeremy Cutler, Alliance News reporter

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