UK-based food producer Bakkavor has announced plans to close its facility in Wigan, affecting approximately 750 employees. This decision comes after the company revealed that its Bakkavor Meals site in Ince, located in north-west England, has been operating at a loss and would need “significant investment” to turn around its profitability.
A spokesperson for Bakkavor stated, “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.”
The company will initiate a consultation regarding the closure of the Wigan facility, which is one of Bakkavor’s 21 manufacturing sites in the UK. This process is set to commence at the end of September and will last for a minimum of 45 days.
In conjunction with this announcement, Bakkavor released its first-half financial results, forecasting a potential exit of approximately £80 million ($105 million) in business during the first half of 2025 should the consultation result in closure. The publicly-listed company emphasized, “Our priority now is focused on working through the consultation process with all colleagues during this difficult time.”
Despite the setbacks associated with potential job losses, Bakkavor has upgraded its operating profit forecast for the full year to between £108 million and £112 million, an increase from the previous estimate of £103 million to £108 million.
Furthermore, the company has confirmed a change in its Chief Financial Officer, as Ben Waldron will step down and be succeeded by UK finance director Lee Miley.
Bakkavor recorded a 2.8% rise in revenue during the six months ending June 29, reaching £1.12 billion. Additionally, like-for-like revenue grew by 3.8%, maintaining the same figure of £1.12 billion. In its domestic market, Bakkavor witnessed reported and like-for-like revenue growth of 4.8% to £957.4 million, along with a 17% increase in operating profit, now at £52.4 million.
Significantly, the group’s total operating profit soared by 27% to £58.8 million for the period, a positive outcome attributed to “momentum from our 2023 restructuring activity.” Moreover, Bakkavor’s net profit increased year-on-year from £25.1 million to £35.2 million.
CEO Mike Edwards 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.”
As the food and beverage industry continues to navigate consumer trends and evolving market dynamics, Bakkavor’s experience reflects larger trends within the food and drink sector, highlighting both the challenges and opportunities faced by the industry.
In light of these developments, stakeholders in the food and drink business are encouraged to stay informed and adapt strategies accordingly. For further insights and detailed analyses on food and drink consumer trends, consider exploring more resources available on the market.
