Changes made at bread, pizza, and dessert supplier Bakkavor are paying off as the business reveals an ‘encouraging’ performance for Q1 2023.
Group revenue rose 9% to £529.3m in the 13 weeks to 1 April 2023. Within this, UK revenue grew by 8.1% to £440.3m, while the US and China both reported double-digit growth to £61.2m and £27.8m, respectively.
The UK performance was thanks to Bakkavor continuing to win market share, which it said was driven by strong service and net business gains.
It has also continued to ‘largely mitigate’ ongoing inflationary pressures through pricing, value optimisation, operational efficiency improvements, and cost control actions, it added.
The results come amid a period of change for the fresh prepared food manufacturer, which has embedded a new leadership team and made changes to its UK operations, including the closure of two UK production sites – Bakkavor Desserts in Leicester and Bakkavor Salads in Sutton Bridge.
The business has also restructured its UK operations around two core sectors – meals and bakery – in a move designed to deliver greater synergies. The meals division combines Bakkavor’s existing meals and salads businesses, while the bakery division combines the company’s pizza, bread, and desserts businesses to make the most of production similarities. It also streamlined its operations by moving to functional reporting for HR and finance, which resulted in redundancies.
Moving forward, it expects to see further share gains in the UK with price recovery expected to offset ‘subdued underlying volumes’.
“The group has made an encouraging start to trading in 2023 and, with momentum expected to continue in all regions, our outlook for FY23 is now at the upper end of market expectations,” said Bakkavor CEO Mike Edwards.
“There is no doubt that the changes we have made as part of our restructuring plans are underpinning performance. I would like to thank our teams for embracing and embedding these changes so quickly.”
Edwards added that the business is confident of making further progress throughout the remainder of this year and into 2023.
“The fundamentals of our business remain strong, as we continue to win market share, demonstrate strong operational delivery and maintain a robust balance sheet.”