UK fresh food provider Bakkavor plc (LON:BAKK) issued a tentative update at the end of the week, stating that its sales were stable, and were even beginning to improve.
The company said that its Chinese business had been ‘severely’ impacted by Coronavirus in January, while a positive start to the year in its UK and US operations was blighted by a sharp dip in sales volumes between March and April.
Since then, Bakkavor said that it had seen early signs of recovery, with sales having stabilised in all three regions. Despite this, the company’s like-for-like revenue was down by 5% year-on-year, for the five months to the end of May.
The company spoke on its UK operations, saying that its like-for-like revenues were down on-year by 19% in April and 13% in May, with its salad and ‘food-to-go’ offering being the hardest hit. It said, however, that it had seen a gradual increase in demand for these products, and that it would work to expand ranges it had simplified at the start of the outbreak.
Regarding its overseas operations, Bakkavor said it had adjusted its US offerings to accommodate lower demand, and that these measures had helped it to mitigate against the worst of the financial fallout. In China, the company said that the lifting of restrictions has allowed restaurants and stores to open, which will allow the Group to resume regular service.
Bakkavor weathers the storm
Speaking on the company’s prudence and flexibility, Chief Executive Agust Gudmundsson commented,
“I would once again like to express my thanks to all of my Bakkavor colleagues, who are working tirelessly to help keep supermarket shelves well stocked. I am hugely grateful for their support and extremely proud of their commitment and determination during these difficult times . We continue to make their health, safety and wellbeing our foremost priority, and have been working in close cooperation with the various regulatory bodies, our colleague representatives and the unions to maintain a safe working environment for all our stakeholders.”
“In the UK, consumer behaviours continue to adjust, and while it will take time for sales to return, I have been encouraged by the recent increase in volumes. Current events have also reinforced my confidence in the vital role we play in partnering with our customers to deliver the fresh, healthy and convenient food that consumers look for every day.”
“In the US and China, both businesses have managed incredibly well through the turmoil, and we continue to support our customers as they reopen their stores and restaurants.”
Investor insights
Following a careful but positive Coronavirus trading update, Bakkavor shares rallied 2.28% or 1.80p, to 80.60p per share 15:08 BST 12/06/20. The company’s p/e ratio is 6.20, their dividend yield stands at a generous 5.01%.
