Bakkavor reports 'strong sales momentum' as Covid-19 restrictions ease

(Sharecast News) - Food manufacturer Bakkavor said on Wednesday that it has seen "strong sales momentum" following the easing of Covid-19 restrictions, helping it deliver growth on the equivalent periods in both 2019 and 2020.
Group reported revenues were up 13.0% on the second quarter of 2020 and 0.7% higher when measured against the comparative period in 2019. Overall, interim revenues were up 4.0% compared to the first half of 2020.

The FTSE 250-listed firm stated that in the UK, sales in the first quarter had been "adversely impacted by lockdown restrictions", however it noted early signs of recovery became apparent in March as government restrictions began to ease.

As a result, UK like-for-like sales increased 12.0% in the quarter compared to 2020 and were down only 1.4% when compared to 2019.

In the US, Bakkavor saw "continued strong sales momentum", with like-for-like sales increasing 48.7% in the quarter compared to 2020 and rising 50.3% ahead of 2019, while in China, the group continued to experience "significant like-for-like sales growth" of 40.8% in the quarter as volumes returned and it built back to pre-Covid-19 levels, leaving sales down 5.5% compared to 2019.

Chief executive Agust Gudmundsson said: "We are pleased to see improving trends across all of our businesses as lockdown measures have eased, with group sales for the quarter ahead of 2019. We are also encouraged by the return to pre-pandemic levels of shopping visit frequency, a key driver for our fresh prepared food offering.

"Looking ahead, industry-wide cost pressures and labour challenges are expected to persist and we will continue to work hard across the group to attract, recruit and retain talent, and with our customers, to mitigate the impact. Overall trading remains in line with management expectations."

As of 0915 BST, Bakkavor shares were down 1.80% at 133.36p.