Own-label chilled food manufacturer Bakkavor said consumer confidence had been dented by the horsemeat scandal, while reporting a 5.4% increase in like-for-like sales in its full-year results ended December 29 2012.
Last year Bakkavor launched an Indian meal range with Tesco
The firm’s ceo Agust Gudmundsson said: “The worries over contamination in the food chain have understandably impacted consumer confidence. Bakkavor remains absolutely committed to the highest standards of food safety and integrity and we are continuing to work with our customers, suppliers and the authorities on rebuilding consumer trust.”
Last week Gudmundsson joined bosses from nine firms – including Tesco, Greencore and Morrisons – in sending an open letter to the Prime Minister protesting against claims from Downing Street insiders that the retailers had remained silent on the horse meat scandal.
Tesco, Greencore and Morrisons
Meanwhile, Bakkavor reported total group revenue up by 1% at pound 1,694.2M for the year.
Earnings before interest, tax, depreciation and amortisation rose by 7% to pound 115.1M.
Cash flow generated from operations was up by nearly 5% at pound 40.7M.
Gudmundsson said: “The Group made good progress in 2012, particularly in the last quarter which gave the business momentum going into 2013. Although the economic climate remains tough, we are confident of our strategy and are well positioned in the chilled convenience market.”
The manufacturer’s UK business generated a revenue of pound 1.407M last year – contributing nearly 87% of group revenue and an increase of 1.4% on the previous year.
But on a like-for-like basis, Bakkavor delivered 5.5% growth in the year and 10.2% in the final quarter. Sales in the final quarter were up by 9.4%.
‘Strong seasonal offering’
The firm attributed the growth to “the successful delivery of a strong seasonal offering”. The result was also supported by its capital investment strategy over the past two years and increased spend on innovation, it claimed. More than 2,000 products were launched across the business last year.
New products in the UK included an extension of the New York Soup Co range and a new pizza category range.
It also launched an Indian meal range for Tesco.
Full-year growth was achieved almost entirely through increased volumes and new business, said the firm. Adverse factors during the period included: subdued consumer spending and unusually poor spring and summer weather, which dented the sale of cold eat products.
Revenue from Bakkavor’s international business was pound 181.6M last year, accounting for 11.4% of group revenue and a 2% rise on the previous year.
The firm’s North American and Asian businesses drove like-for-like revenue growth of 8% for the year and 7% for the final quarter.
Net debt on December 29 was pound 563.9M, down by pound 27.5M on the previous year.
