Bakkavor delivers strong ebitda growth despite revenue slump

Food manufacturer, Bakkavor, has seen adjusted UK ebitda grow 10% from £112.9m to £124.1m for the 52 weeks to 26 December.

In the full-year results released by the company, it was revealed this growth came despite UK revenues dropping slightly from £1.520bn to £1.519bn, which the company blamed on the ongoing deflationary environment and its exit from certain low-margin business.

Internationally, the company fared better, with total group adjusted ebitda rising 14% from £113.3m to £129.7m, and revenues rising 3% from £1.63bn to £1.68bn.

In the report, the company warned that the introduction of the National Living Wage in April would present a challenge to the whole UK food sector.

Agust Gudmundsson, chief executive officer at Bakkavor, said: “I am very pleased that, as we celebrate Bakkavor’s 30th anniversary in 2016, we can report that the group is in a very strong position, with revenue growth, margin improvement and excellent cash conversion.

“In January this year we also announced the strengthening of the group’s ownership structure and I am delighted to welcome The Baupost Group L.L.C., our new shareholder, to the group. This marks a turning point for Bakkavor and we look forward to working with Baupost to deliver on our long term strategic objectives.”

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