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Bakkavor has announced a 1.5 per cent sales increase for the start of the year, but warned that progress is being dampened by price inflation.

In an update to the City ahead of its AGM today, the fresh prepared food specialist described the 1.5 per cent revenue increase in the 19 weeks to 12 May, compared to the same period last year, as 'in line with management expectations'.

Despite admitting UK growth has been dampened by ongoing retail price inflation, the group said it continues to expect revenue to benefit from improved market conditions and new business later in the year.

Growth in international business remains strong, driven by the success of new products and increased consumer demand, it added.

'The group has kept a strict control on costs and this, together with the efficiency benefits from its ongoing capital investment programme, has helped mitigate continued input inflation,' Bakkavor said. 'The construction of four key strategic development projects in the UK, US and China is progressing as planned and these are all expected to be operational later in the year. Overall, management expectations for the full year remain unchanged.'

Bakkavor Group shares slipped to 198p on the London Stock Exchange as of 10am on 23 May, down from 204p on 18 May, but well ahead of the 174p yearly low on March 29.