Tesco salad supplier on course for profit targets

The UK’s biggest supplier of ready meals expects to hit its full-year profit targets despite the “unprecedented challenges” of HGV driver shortages.

Bakkavor, whose customers include Tesco, Marks & Spencer, Waitrose and Sainsbury’s, also revealed it would reinstate the interim dividend

It cancelled last year’s payouts as sales tumbled by £92.4 million.

However, the FTSE 250 company admitted that haulier shortages were having a knock-on effect on raw material prices.

READ MORE: Tesco labelled ‘worst supermarket for forest destruction’

“We and the industry face a unique set of challenges in labour availability and this is also impacting the entire supply chain,” Bakkavor chief executive Agust Gudmundsson told The Times.

Britain has a shortfall of around 90,000 lorry drivers, a result of the ageing workforce and EU drivers returning home.

Bakkavor reported a four per cent increase in first-half revenues to £915.7 million, marginally below the £923 million of two years ago. 

Pre-tax profit leapt from £6.8 million to £34.6 million.

According to IGD, ready meals took a “significant” knock during lockdown.

Gudmundsson added that the company had been boosted by “a return of shopping habits to 2019 levels” in Britain.

Bakkavor shares have risen around 11.5p since yesterday morning, currently standing around 126p.

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