Bakkavor, the Iceland-based food group, has claimed it is recovering strongly after the company flagged a jump in third-quarter profits and rising sales.

The company, which has had a challenging 12 months, booked a 45% jump in EBITDA once restructuring costs were excluded from the numbers and a 5.6% rise in revenues.

EBITDA reached GBP45.2m (US$74.8m), sales rose to GBP425.5m, while Bakkavor's net losses narrowed from GBP19.6m a year ago to GBP14.1m.

"The improved profit performance was underpinned by increased sales volumes and improved operational efficiencies generated through our restructuring activities," said CEO Ágúst Gudmundsson.

"We are making strong headway in our core UK fresh prepared foods business driven by sales uplifts of 13% in ready meals in the third quarter of 2009, reflecting our solid market position in our key categories."

Questions have been asked about Bakkavor's balance sheet but the company said it had cut its liabilities from GBP805.2m at the end of 2008 to GBP648.3m at the end of the third quarter of 2009.

Gudmundsson claimed Bakkavor had made a "significant milestone" in securing fresh financing deals with the lenders to its holding company.

"We have made significant progress in our discussions with the lenders to our Icelandic holding company. We have reached agreement in principle with parties representing around 70% of the holding company debt on heads of terms which include the extension of the maturities to 2014.

Gudmundsson added: "Discussions on the final terms of the agreement are ongoing and we expect to announce a conclusion shortly."