31 Oct, 2008 - Bakkavor Group has posted results for the first nine months trading of 2008.
Highlights
* Turnover £1.2 billion in 9M, up 10% and £402.8 million in Q3, up 7%
* EBITDA £87.9 million in 9M, down 24%, and £29.4 million in Q3, down 26%, including restructuring costs of £4.8 million in 9M, of which £1.7 million in Q3
* EBITDA margin 7.3% in 9M and 7.3% in Q3 (underlying EBITDA margin 7.7% in 9M and 7.7% in Q3, excluding restructuring costs)
* Operating profit (EBIT) £54.7 million in 9M, down 37%, and £18.2 million in Q3, down 39%
* Cash flow from operating activities £44.3 million in 9M, down 46%, and £28.8 million, up 41%, in Q3
* Shareholders' earnings, excluding loss on other financial assets, amounted to £5.8 million in the first nine months
* Return on equity 3.3%, excluding loss on other financial assets, compared with 19.2% in 9M 2007
* Earnings per share 0.3 pence in 9M excluding loss on other financial assets, compared with 1.7 pence in 9M 2007
* Loss on the Group's economic interest in 10.9% shareholding in Greencore Group PLC under a CFD (contract for difference) £58.5 million in 9M, of which £12.3 million in Q3
* In October, the Group relinquished its 10.9% economic interest under a CFD, as a result of a withdrawal of the funding source
* As a part of ongoing review, further restructuring in ready meals proposed in Q3 and October 2008
Ágúst Gudmundsson, Chief Executive Officer daid: "Bakkavör Group is progressing in very challenging conditions as we continue to focus on our business priorities to mitigate inflationary costs, improve operational efficiencies, increase market share and drive significant cash generation. As such we are making firm groundwork towards our stated intention
of returning to profit growth in 2009.
"As expected, the Group's profitability in the quarter continued to be affected by its withdrawal from a proportion of its ready meals business in the second half of 2007 and subsequent restructuring, as well as steep increases in raw material and utility costs. The quarter was also marked by a further downturn in consumer confidence and unsettled summer weather in the UK which affected our sales performance during the period. The Group however successfully gained market share in ready meals and other core categories late in the quarter which will increase sales revenues in the remainder of the year.
"This month the Group relinquished its 10.9% economic interest in Greencore Group. Turmoil and fluctuations in the global financial markets resulted in the withdrawal of the funding source, making it necessary for the Group to relinquish this economic interest. The withdrawal of the funding source was in no way a reflection of the financial standing of Bakkavör Group.
"Looking ahead, we expect the trading environment to remain tough for the remainder of the year and into 2009. We will continue to focus on our key business priorities in order to drive sales and profit performance and remain confident of our commitment to the fresh prepared foods sector. The Group has a diverse range of products across a wide and strong customer base as well as the ability to develop new products and ranges rapidly. Bakkavör Group remains focused on upholding and strengthening its position in the fresh prepared foods and produce markets, underpinned by its ability to successfully meet changing consumer needs."