Iceland-based food group Bakkavor has said profits continue to be hit by the tough trading environment.
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In an update issued today (5 February), Bakkavor said profits in 2008 had been impacted by commodity and utility inflation, restructuring of its ready meals businesses, poor summer trading and a rise in promotional spending.
As a result, EBITDA in 2008 excluding restructuring costs and associates is expected to be around GBP109m (US$159m).
Like-for-like sales for the full-year remain broadly flat, Bakkavor said.
Fourth-quarter sales are expected to be 11% ahead of last year, with like-for-like sales up by around 1% supported by the return to growth of its ready meals business.
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By GlobalDataBakkavor said, as part of a planned strategy to improve operating efficiency, it has undertaken “significant” restructuring activity, including the consolidation and closures of some of its factories, to realign its cost base.
The board expects the restructuring activity in 2008 to total GBP19m in cash costs and GBP23m in asset-related impairments.
The year-end results are expected to be announced on 26 March.
