Icelandic convenience foods group Bakkavor has reported a 26% increase in net income from continuing business to £13.1m (US$24.7m) for 2004.

“The group performed well during the year and continued its rapid organic growth. Our performance in 2004 gives a clear indication of the strong foothold the group has gained with sales growing substantially to its major customers during the year,” said executive chairman Ágúst Gudmundsson.

Bakkavor acquired a 20.4% holding in UK convenience foods group Geest during the financial year. In December it made an indicative offer for Geest. The company said due diligence is expected to be completed in February.

Bakkavor said new product development activities have been strong during the year, with over 290 new products launched. During 2004, the company obtained 33% of its income from its ready meals product category, 24% from meal accompaniments, 23% from ethnic snacks, and 20% from dips and dressings.

Growth was strong in all product categories, particularly in meal accompaniments and ready meals. Sales of ready meals grew by 19%, meal accompaniments by 41%, ethnic snacks by 9% and dips, dressings and sauces by 9%.

“Operating prospects are good for 2005 and demand for chilled convenience food is expected to continue to grow during the year,” added Gudmundsson.