International food manufacturing company Bakkavor Group Plc (LON: BAKK) shares made good progress during trading on Tuesday, despite regression in its earnings fundamentals.
Group revenue growing 1.4% and like-for-like revenue rising 2.0% in a year-on-year comparison of H1, up to £923 million and £977.9 million respectively.
Despite this, Adjusted EBITDA pre IFRS 16 contracted 6.5% to £73.5 million and adjusted operating profit narrowed by 11.5%, from £57.3 million, to £50.7 million. Even more notable, Bakkavor operating profits dived 45.8% on-year, from £54.1 million to £29.3 million.
Further, the Company’s interim dividend per share remained flat at 2.0p, while their basic EPS contracted by 4.0p and their adjusted EPS narrowed by 1.5p, to 3.0p and 5.9p.
Bakkavor Group comments
Agust Gudmundsson, CEO, said,
“During a challenging period, I’m pleased by the resilience we’ve shown across the business to deliver a solid first half performance. While the trading environment in the UK is still uncertain, we remain positive of our long-term prospects and the demand for fresh prepared food.”
“Our UK operations have never been stronger and we’re the clear market leader across all four of our core categories. I’m encouraged by developments made across our US business; improving efficiencies, streamlining our customer proposition and building sales across new sites. Our business in China continues to go from strength to strength, expanding both our customer base and product offering.”
“Despite a subdued start to the second half, we currently expect an uplift in performance, boosted in the UK by the impact of new business and an easing of raw material inflation. Our International business is making further progress and therefore the Group remains confident in delivering full-year performance broadly in line with 2018.”
“Looking further ahead, we believe that our strategy, combined with our scale and expertise, leaves us well placed to capitalise on future growth opportunities.”
The Company’s shares rallied 8.01% or 8.60p per share despite today’s – at best – mixed update, up to 116.00p per share 10/09/19 16:35 BST. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Bakkavor stock. The Group’s p/e ratio is 7.31, their dividend yield stands at 3.45%.
Elsewhere, there have been updates from other food and drink retailers; Avangardco Investments Public Limited (LON: AVGR), Loungers PLC (LON: LGRS), The Coca-Cola Co (NYSE: KO), Devro plc (LON: DVO), Greencore Group plc (LON: GNC), NWF Group plc (LON: NWF) and Cranswick plc (LON: CWK).