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BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
chairman’s address
IN 2012 THE GROUP DELIVERED A STRONG FINANCIAL
PERFORMANCE AGAINST A BACKDROP OF CHALLENGING
MARKET CONDITIONS.
In the same period, we simplified the Group’s capital
structure, facilitating access to wider financial markets.
This will allow the Group to take advantage of the
considerable long-term growth potential in fresh
prepared foods.
Lydur Gudmundsson
Non-executive Chairman
MEETING LONG-TERM CONSUMER DEMAND
Our belief that we can fulfil our vision to be recognised and respected as
the world’s leading fresh prepared foods provider is underpinned by our
ability to meet long-term demand through our world-class operations,
consumer knowledge and manufacturing expertise. We outline our four
point strategy for growth to achieve our vision on page 7. Positive trends
continue to drive the strong long-term demand for fresh prepared foods
and we expand upon this on pages 11 and 29.
2012 PERFORMANCE
Despite continuing economic uncertainty the Group performed well in
2012, achieving like-for-like sales growth of 5.4% which converted into
EBITDA growth of £7.4 million. In the Business Review on page 23 our
CEO expands upon our performance.
CORPORATE RESTRUCTURING
A key achievement in 2012 was to attain a simpler corporate structure,
addressing the Group’s legacy ownership and funding issues.
On 28 September 2012 we announced the completion of this
corporate re-organisation. Bakkavor Finance (2) plc’s ultimate parent
became Bakkavor Group Limited, domiciled in the UK, with a single
class of shares.
In addition, after over 40 years of service in our business, Gordon Pates,
our CEO of UK and Europe, retired from the Management Board in
December 2012. Gordon will continue to work with us as a consultant,
allowing us to continue to benefit from his extensive knowledge and
experience in the fresh prepared foods market.
Our three UK Managing Directors on the Management Board – Ivan
Clingan, Mike Edwards and Steve Broadbent – have assumed Gordon’s
day-to-day responsibilities and will continue to lead our customer
relationships, as they have done for several years in the UK.
OUR PEOPLE
At Bakkavor, we continue to be immensely proud of the calibre of our
people and their passion and loyalty to the Group and we would like to
thank them for their commitment throughout the year. Management
remains focused on providing training to ‘grow our own’ people and
enable them to develop to their best of their abilities.
OUTLOOK
The Group made good progress in 2012, particularly in the last quarter
which gave the business momentum into 2013. Although the economic
climate remains tough we are confident of our strategy and are well
positioned in the fresh prepared foods market.
The leverage covenant in the Group’s banking facilities was also reset
to provide additional headroom.
Finally, my brother, Agust Gudmundsson, and I personally invested
£12.8 million through the issuance of new shares in Bakkavor Group
Limited. These monies were used in repayment of borrowings.
BOARD AND MANAGEMENT BOARD CHANGES
Upon completion of the corporate restructuring, Asgeir Thoroddsen
resigned from the Group Board as Non-executive Director and
Gudmundur Sigurdsson was elected as a Non-executive Director on
25 September 2012. I would like to take this opportunity to thank
Asgeir for his many years of loyal service to the Group.
Lydur Gudmundsson
Non-executive Chairman
20 February 2013
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