(Alliance News) - Bakkavor Group PLC hailed a "strong" performance in the first quarter of 2024, with revenue improving on a reported and like-for-like basis, while raising guidance for annual operating profit.
In the 13 weeks that ended March 30, the London-based fresh prepared food manufacturer said revenue rose 2.3% to GBP541.3 million from a year earlier, and was up 3.2% to GBP543.3 million on a like-for-like basis.
UK revenue rose 4.1% to GBP458.4 million on both a reported and like-for-like basis, which Bakkavor said was due to strengthening volumes in the quarter, supported by "improving consumer confidence, successful innovation, and excellent service".
Meanwhile, US reported revenue fell 9.8% to GBP55.2 million, while like-for-like revenue fell 5.8% to GBP57.7 million. Bakkavor said this was in line with expectations, "given the region's focus on accelerating profit improvement".
China reported revenue declined 0.4% to GBP27.7 million, but rose 9.8% to GBP27.2 million on a like-for-like basis. "With the impact of Covid now annualised, LFL growth returns to more normalised levels," the company said.
Chief Executive Officer Mike Edwards commented: "Last year we executed a dynamic plan to reset the business and I am delighted that the momentum this has created across the group has underpinned our strong [first quarter] performance. All three regions are making excellent progress against the group's strategic priorities of rebuilding margins and reducing leverage and, as a result, we are confident in delivering our increased guidance for 2024."
Looking ahead, Bakkavor upgraded its guidance for 2024 adjusted operating profit to a new range of GBP103 million to GBP108 million. It previously guided for annual adjusted operating profit to be in excess of GBP100 million, up from a reported GBP94.3 million in 2023.
Bakkavor said its confidence in delivering ahead of current market expectations is based on: "further synergies and efficiencies in the UK following successful implementation of our 2023 plan, with inflation moderating and price recovery secured; accelerating profit improvement in the US; and stability in China, which continues to be cash generative and self-funding."
Bakkavor added it continues to focus on reducing debt and improving leverage. At December 30, operational net debt stood at GBP229.6 million, down 19% from GBP284.9 million a year earlier.
Shares in Bakkavor were up 1.3% to 134.76 pence each in London on Thursday late morning.
By Greg Rosenvinge, Alliance News senior reporter
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Bakkavor (BAKK)