Bakkavor price increases in the UK have supported revenue growth as it looks towards its acquisition by fellow food-to-go giant Greencore.
In its half-year report for the 26 weeks to 28 June 2025, the London-headquartered manufacturer reported a 1.2% rise in like-for-like sales up to £1,079m, driven by price in the UK and strong US volume growth.
Adjusted operating profit jumped up 9.8% to reach £61.5m, which left its expectations for the full year to be towards the upper end of its previous guided range of £120m to £126m.
“The first half of 2025 has seen another strong performance by the Group as we continued to move at pace delivering on our strategy and driving further margin improvement,” commented Bakkavor CEO Mike Edwards.
“Looking further ahead, we have accelerated the delivery of our medium-term margin target of 6% to FY26, one year ahead of plan,” he added.
Bakkavor incurred exceptional costs of £24m including those relating to the Greencore transaction agreed on 15 May and subsequently approved by shareholders in July.
The deal, which is expected to become effective in early 2026, is currently under scrutiny from the Competition and Markets Authority (CMA). An update to the merger inquiry posted earlier this week confirmed the deadline for phase 1 decision to be on 27 October.
Meanwhile, the successful exiting from its “margin dilutive” China business in July for a net consideration of £51m was presented as a discontinued operation in its H1 FY25 results. It noted this strategic exit from the region would enable it to sharpen focus on its core business and reduce the risk profile of the Group.
The company revised its expected cost of inflation for 2025 from £50m up to £65m. It said the overall increase remains weighted to labour given the rises in National Insurance contributions and National Living Wage, but also noted “certain key commodities” were driving the hikes.
Meeting desires
Bakkavor highlighted that, despite subdued consumer confidence, the demand for convenient, quality, and value meal solutions has only increased in the UK. Its fresh prepared food offer resonated strongly with consumers desires, it added, delivering the strongest level of volume growth since 2020, up 4.4% on last year (well ahead of the wider grocery market growth of 0.4%).
Demand for elevated at-home dining experiences benefited the meals category, along with new product development, said Bakkavor. Its pizza and bread ranges experienced good growth, driven by promotional activity and more premium and takeaway offers benefitting from lower demand for eating out.
Among its over 450 new products launched since the start of the year were 18 new cheesecakes as part of its desserts category reset (commenced in 2024), which it said has resulted in a strategic customer gaining market share. It also rolled out a new double-filled lemon éclair and relaunched ranges of top-tier wraps and pizza with updated recipes.
In the US, volume growth was fueled in part by successful NPD lauches such new fresh meals, burritos, and artisan bread under its ’Fresh & Simple’ branded range.
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