(Alliance News) - Bakkavor Group PLC on Tuesday announced a higher dividend as annual adjusted operating profit grew, and it highlighted that trading in the new year "has started well".
The London-based 'fresh prepared' food maker said pretax profit declined 2.4% to GBP68.6 million in the financial year that ended December 28 from GBP70.3 million the year before.
Adjusted operating profit however jumped 20% to GBP113.6 million from GBP94.3 million, but statutory operating profit declined 3.7% to GBP93.4 million from GBP97.1 million.
Revenue climbed 4.0% to GBP2.29 billion from GBP2.20 billion.
"Shoppers are making more frequent trips to the supermarket which has supported growing demand for our fresh, convenient and high-quality meal solutions. Value remains important for consumers, supported through higher levels of promotional activity, and demand for more premium meal solutions continued as shoppers looked to eat at home instead of dining out," Bakkavor said.
It added: "UK demand returned and internationally we delivered good growth."
Cost of sales increased 2.7% on-year to GBP1.66 billion in financial 2024 from GBP1.61 billion, while other administrative costs came in 11% higher, at GBP454.8 million compared to GBP408.6 million.
The company proposed a final dividend of 4.80 pence per share, up 9.8% from 4.37p a year prior. This brings the total payout for financial 2024 to 8.00p, up 9.9% from 7.28p.
Bakkavor said trading in early 2025 was in line with expectations, with financial 2025 revenue anticipated to be broadly in line with financial 2024, amid an impact of the Wigan closure which is largely offset by underlying growth in all three regions, which are the UK, the US, and China.
In September, Bakkavor announced plans to close its Wigan factory, citing low margins and a need for investments.
The company on Tuesday said the adjusted operating profit consensus for financial 2025 is GBP118.6 million, which would be 4.4% higher from financial 2024. The range is between GBP114.0 million and GBP123.1 million.
Bakkavor is confident of delivering its 6% adjusted operating profit margin target in financial 2027, up from 5.0% in financial 2024 and 4.3% in financial 2023.
The company said: "With debt and leverage at the lower end of our target range, the group is well positioned to make return- enhancing investments to drive efficiency. Recognising the importance of the dividend to our shareholders, we expect to continue to deliver a progressive policy. We also maintain the flexibility to assess acquisition opportunities where we see strategic fit and the potential to enhance group margins and returns."
Bakkavor shares were down 1.0% to 153.00 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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