Bakkavor Group PLC (LON:BAKK) has confirmed its guidance for the full year despite what it said was “weak” consumer confidence in the UK.
In a full year trading update, the group said like-for-like revenues had risen 3.2% compared to 2017.
UK LFLs rose 1.8% despite the weaker consumer confidence, however, this paled in contrast to the firm’s international business where LFL revenues surged 16%.
The FTSE 250 firm said in the current economic climate it considered its performance “robust” and confirmed its full-year expectations were unchanged.
Bakkavor is the leading provider of fresh prepared food in the UK, supplying grocery chains such as Tesco PLC (LON:TSCO), Marks & Spencer Group PLC (LON:MKS), J Sainsbury plc (LON:SBRY), and Waitrose.
In a note to clients, analysts at broker Peel Hunt said that while the company was “strengthening” its market position with a material new desserts business and the acquisition of bakery chain Haydens in September, it would need to gain share to “materially outperform” the underlying sales of its four core customers, which comprise 87% of its UK sales.
The broker added that as Bakkavor was focused on maintaining its margins and would not chase business at its expense, volumes were forecast to show “moderate growth” of 1.5% with margins close to the prior year.
“In order for margins to progress, we need to see improved volume growth and/or lower input costs.”
In early trading Friday, Bakkavor shares were up 0.3% at 140.4p.
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