Ready meals giant Bakkavor sees profits leap but warns on costs

Ready-meals giant Bakkavor on Thursday revealed sales growth but sounded caution over cost pressures it is grappling with.

The FTSE-250 firm, a supplier to supermarkets such as Marks & Spencer, warned that ingredients costs, particularly for dairy, have continued to rise, and faster than anticipated.

It added that wage bills have also increased.

Chief executive Agust Gudmundsson said: “We continue to remain cautious and anticipate little change in underlying economic and market trends. In particular, input price volatility continues, which may in turn impact consumer demand.”

Pre-tax profits rose 39% to £47.1 million in the six months to June 30. Revenues were up 0.8% to £910.4 million.

It is looking to boost sales further with an acquisition announced today. It has bought desserts specialist Haydens Bakery for £12 million from Real Good Food.

Gudmundsson said Haydens “is a business which shares Bakkavor’s passion for providing outstanding service, quality and value to its customers and has a reputation for supplying some of the best tasting sweet treats to the UK’s leading retailers”.