**Summary of Bakkavor Group PLC Half-Year Report (H1 2025)**
**Financial Highlights (H1 2025 vs. H1 2024):**
**Revenue Growth** Reported revenue increased by 0.9% to £1,076.3 million, with like-for-like (LFL) revenue up 1.2% driven by strong US volume growth and UK price increases.
**Profitability** Adjusted operating profit rose 9.8% to £61.5 million, with a margin improvement of 50 basis points to 5.7%. Operating profit was £37.5 million, including £24.0 million in exceptional costs related to the Greencore acquisition and other restructuring.
**ROIC** Return on Invested Capital (ROIC) improved by 190 basis points to 11.2%.
**Discontinued Operations** Successful exit from China for £51 million, classified as discontinued operations.
**Leverage** Leverage reduced to 1.1x, down from 1.2x, remaining at the lower end of the target range.
**Earnings** Adjusted earnings per share increased to 6.4p from 5.5p, while basic earnings per share decreased to 2.9p from 6.1p due to exceptional costs.
**Strategic Progress**
**UK** Continued margin improvement despite volume decline (-2.0%), driven by strategic initiatives and cost efficiencies.
**International** US margin became accretive to the Group, with LFL revenue up 7.6% and margin up 260 basis points to 5.9%.
**Excellence** Bakkavor Operating System (BOS) drove efficiency improvements across regions, contributing to margin expansion.
**Trust** Progressive KPIs in people and ESG priorities, including improved employee turnover and reduced carbon emissions.
**Acquisition by Greencore**
The acquisition of Bakkavor by Greencore was approved by shareholders in July 2025. Regulatory approvals are pending, with the Competition and Markets Authority (CMA) launching a merger inquiry on 1 September 2025.
**Outlook and Guidance**
FY25 adjusted operating profit (continuing operations) upgraded to the upper end of the £120m to £126m range.
Accelerated delivery of 6% adjusted operating profit margin target to FY26, one year ahead of plan.
Strong cash generation and further leverage reduction expected, with proceeds from the China sale contributing to deleveraging.
**CEO Commentary (Mike Edwards)**
Highlighted strong H1 performance, strategic progress, and confidence in delivering FY25 guidance.
Emphasized the team’s commitment and exceptional efforts in achieving results while navigating significant changes in ownership.
**Key Risks and Uncertainties**
Material uncertainty related to Greencore’s refinancing of existing bank facilities post-acquisition.
Continued focus on operational efficiency and cost management amid inflationary pressures.
**Conclusion**
Bakkavor Group PLC delivered a robust H1 2025 performance, underpinned by strategic initiatives, operational excellence, and successful exits from non-core markets. The Group remains well-positioned for future growth, with upgraded FY25 guidance and accelerated margin targets, despite ongoing macroeconomic challenges and the pending acquisition by Greencore.
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Reported Revenue (Continuing Operations) | £1,076.3m | £1,066.8m | 0.9% |
| Like-for-Like Revenue (Continuing Operations) | £1,079.3m | £1,066.8m | 1.2% |
| Adjusted Operating Profit (Continuing Operations) | £61.5m | £56.0m | 9.8% |
| Adjusted Operating Profit Margin (Continuing Operations) | 5.7% | 5.2% | 50bps |
| Operational Net Debt | £194.8m | £201.8m | (7.0%) |
| Leverage (Operational Net Debt / Adjusted EBITDA) | 1.1x | 1.2x | (0.1x) |
| Free Cash Flow | £47.3m | £53.2m | (5.9%) |