Prepared food provider Bakkavor Group Plc has confirmed that it has proposed the closure of its Wigan site, which employs 750 people.
The Wigan-based site was deemed “unprofitable” stating that it would need “significant investment”.
Following on from the announcement, Bakkavor said its Wigan site would enter a collective consultation with employees and their representatives. It said the consultation process would commence on 30th September, lasting for a minimum of 45 days.
A spokesperson for Bakkavor said: “Bakkavor has set out clear priorities to ensure we are in the best place to operate efficiently, whilst also being able to deliver for customers. As we continue to deliver on these priorities, we can confirm we have made the difficult decision to propose the closure of our Bakkavor Meals site in Wigan which employs 750 people.
“Our Wigan site, one of our 21 UK factories, requires significant investment which, combined with the fact that it is unprofitable, makes the position unsustainable. We’ve undertaken a thorough review of options and despite our best efforts it has not been possible to find a viable solution. Furthermore, we believe there is no realistic prospect of being able to do so in the foreseeable future.
“Our priority now is focused on working through the consultation process with all colleagues during this difficult time.”
H1 results show 26.7% increase in operating profit
Bakkavor also announced its half year results for the 26 week period ended 29th June 2024.
Its like-for-like revenue was up by 3.8%, driven by the UK, as it said “volume was improving” and ongoing inflation was “largely mitigated”.
Bakkavor achieved an adjusted operating profit of £55 million, up 26.7% on the year. It also reported that its revenue was up 2.8% from £1.09 billion to £1.12 billion.
Operational net debt was reduced by £27.8 million to hit £201.8 million, while free cash flow increased on the year from £45.2 million in H1 2023 to £53.2 million in H1 2024.
Outlook for FY24
Bakkavor expects strong FY24 delivery in all regions, with the UK expected to achieve “continued volume growth and efficiency” to support profits.
The company also said it had changed its guidance for full year adjusted operating profit from £108 million to £112 million, which was ahead of its expectations.
Mike Edwards, CEO, commented: “This has been a strong first half for the Group, with momentum from our 2023 restructuring activity continuing to support our performance in 2024. I would like to take this opportunity to thank all of our colleagues for their continued hard work, commitment and loyalty to the business through this period of significant change.
“We are firmly focused on continuing to rebuild margins and we are pleased to upgrade guidance for 2024 as we look to drive efficiency in every part of our business.
“We are excited about building a stronger Bakkavor as the trading environment improves and we continue to leverage the benefit of the actions we have taken over the last couple of years. As such we have good line of sight to deliver further margin improvement as we move into 2025 and beyond.”
