(Alliance News) - Bakkavor Group PLC on Wednesday reported a steady recovery in profit and sales in the UK and elsewhere, as shopping visit frequency returned to pre-pandemic levels.
As a result of improved sales visibility, the London-based fresh prepared food company booked pretax profit of GBP34.6 million in the first half of 2021, multiplying from GBP6.8 million in the same period last year.
It made interim revenue of GBP915.7 million, up 4% from GBP880.5 million a year prior.
Shares in Bakkavor were up 6.8% at 118.58 pence in London on Wednesday morning.
Revenue momentum was underpinned by new products launched as shopping visit frequency improved, the company said.
"In the UK, Covid-19 continued to impact the business at the beginning of the year, but we have been strongly encouraged by the recovery in sales as we lap the beginning of the pandemic and lockdown restrictions have eased. Importantly, in May we saw a return in the frequency of shopping visits, a key driver of demand for our FPF categories, to pre-Covid-19 levels," said Bakkavor.
Particularly, there was a strong demand for fresh prepared food in the US, where like-for-like sales grew 32% in the half-year. Like-for-like sales grew 2.4% in the UK.
Meanwhile in China, like-for-like sales were up 47% on a year before, representing Bakkavor's biggest regional rebound. It said that sales growth reflected how low prior year comparatives were as China was hit by virus restrictions.
Bakkavor reinstated an interim dividend of 2.64 pence per share. It paid no interim dividend for 2020, and a 2.0p one for 2019.
It noted it has GBP200 million in headroom on its debt facilities of GBP531 million.
"While recognising the unprecedented fast-evolving challenges in labour availability and its subsequent impact on the supply chain, most significantly in raw material inflation and logistics disruption, the group is well placed to manage these challenges as a result of our continued focus on people, the strength of our supply chain and our collaborative approach to customer relationships," the company said.
"We continue to invest across the group to underpin capacity and productivity improvements leaving us well positioned to continue to drive growth and enhance our return on invested capital going forward."
It expects to deliver a full-year operating margin in line with the first half's figure of 5.1%.
By Josie O'Brien; josieobrien@alliancenews.com
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Bakkavor (BAKK)