Bakkavor has reported a small increase in revenue for the first half of 2015 as international business offset a tough UK market.
The prepared food giant posted a 3 per cent increase in turnover to £866.4 million in the 26 weeks to 27 June 2015.
It credited productivity investments and strict cost control for a 14 per cent increase in EBITDA to £65.4m for the half year.
The company’s improved performance was driven by growth in international markets, while the UK faced “challenging market conditions”, the company said. In the UK, revenues remained virtually unchanged at £760m for the half year.
“Revenues in our UK business totalled £387.8m in the second quarter, reflecting the slowdown in growth seen by major customers, the ongoing impact of deflation and our exit from low-margin business such as the recent closure of our Yorkshire fresh prepared fruit facility,” said chief executive Agust Gudmundsson.
“We have passed on price reductions from raw material deflation, but we continue to see pressure on labour costs across our operations and this is likely to accelerate with the introduction of the national living wage in April 2016.”
The salad category continues to perform strongly following investment and restructuring, Gudmundsson added.
“It has been another quarter of good progress but we expect the trading environment to continue to be challenging due to a combination of price deflation and a highly competitive grocery market,” he said.
“We remain focused on our core strategic objectives of close partnering with our customers and selective investment to drive growth, technical excellence and product innovation. This strategy, combined with our leading market position and improved financial strength is a strong platform and gives us confidence for the period ahead.”
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