Revenue lifts at fresh food provider Bakkavor, but labour shortages bite
Fresh food provider Bakkavor’s revenue has lifted above pre-pandemic levels, despite “unprecedented challenges in labour availability” which risk its operations running stale.
Like-for-like revenue swelled by 6.4 per cent to £924.9m in the six months to 26 June, and 1.2 per cent ahead of the same period in 2019.
The Fitzroy headquartered-based company, which also operates in the US and China, has balanced itself after the turbulence seen at the height of the pandemic last year.
The company said that its profitability has improved “significantly”, as its operating profits have surged 243.1 per cent to £47m.
CEO Agust Gudmundsson said he was “pleased with the overall performance”, adding that: “The UK has shown a positive recovery, benefiting from a return of shopping habits to 2019 levels and a strong pipeline of innovation, as well as a meaningful pick up in operational gearing as volumes recover.”
The labour shortages, which have so far hit several retail heavyweights, have pushed supply chain hang-ups, as well as raw material inflation.
Despite these pressures, the group said it expects to deliver a full year operating profit margin in line with its first half.
“We, and the industry, face a unique set of challenges in labour availability and this is also impacting the entire supply chain, contributing to raw material price inflation and logistics disruption,” the fresh food boss explained.
“Our performance in the period and the continuation of these mitigating actions, combined with our track record of delivery through previous challenging periods over our thirty-five year history, gives us confidence in our full year outlook.”
Bakkavor’s basic earnings per share jumped 3.3p to 4.2p. It has also reinstated an interim dividend of 2.64p per share, which it says reflected its “confidence in the future”.