Agust Bakkavor

Gudmundsson

Volume growth in a deflation-struck market has helped Bakkavor grow its revenue and helped it return to making a pre-tax profit in the first quarter.

The prepared produce giant posted a revenue of £415.8 million for the 13 weeks ended 26 March 2016 - up from £410.2m in Q1 2015.

Whereas last year in Q1 the firm posted a pre-tax loss of £2.7m, this year Bakkavor posted a Q1 pre-tax profit of £6.8m.

CEO Agust Gudmundsson said: 'Reported revenues in our UK business totalled £373.8m in the first quarter, representing growth of 1.6 per cent on a like-for-like basis which was slightly behind the market as we continued to reshape our business and focus on margin.

'There has been good underlying growth across our core categories in the first three months of the year, driven by a successful pipeline of new product launches and joint business plans with our customers.

Adjusted EBITDA margin has increased to 7.7 per cent, reflecting our ongoing priorities of cost control, productivity and efficiency investments. This approach will remain a key focus going forward as labour costs continue to rise, with further pressure expected following the introduction of the National Living Wage in April. We will of course continue to work closely with all stakeholders to mitigate these costs where possible.'

Among the companies Bakkavor supplies are the 'big four' retailers, plus Waitrose and Marks and Spencer.