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1. Company Snapshot

1.a. Company Description

Bakkavor Group plc, together with its subsidiaries, prepares and markets fresh prepared foods in the United Kingdom, the United States, and China.It offers meals, pizzas and breads, desserts, salads, soups and sauces, dips, food-to-go products, fresh cut salads, sandwiches and wraps, and bakery products.The company is also involved in the marketing and distribution of fresh produce; management of properties; manufacture and sale of custom and private label savory and bakery products; and customer invoicing and financing of receivables.


It primarily sells its products through high-street supermarkets.The company was formerly known as Diamond Newco plc and changed its name to Bakkavor Group plc in October 2017.Bakkavor Group plc was founded in 1986 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on BAKK

Bakkavor Group's recent performance was driven by a 4.0% revenue growth to £2.29 billion in FY 2024, surpassing expectations. The company achieved a significant margin improvement, navigating cost inflation and strategic site closures. Additionally, the company's strong financial performance, with EPS beating expectations, and a reported estimated fair value of £2.25 based on 2-stage free cash flow to equity, indicates a promising outlook. Furthermore, the company's ability to navigate industrial action and achieve a pay deal with some staff in the UK factory in Spalding, Lincolnshire, highlights its resilience and commitment to its employees.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Fresh Prepared Food

Expected Growth: 3.0%

Bakkavor Group plc's Fresh Prepared Food segment growth of 3.0% is driven by increasing consumer demand for convenient, healthy, and fresh meals, coupled with the company's strategic expansion into new markets, innovative product offerings, and operational efficiencies. Additionally, the segment benefits from long-term contracts with major retailers, ensuring a stable revenue stream.

7. Detailed Products

Fresh Prepared Foods

Bakkavor Group plc offers a wide range of fresh prepared foods, including sandwiches, salads, and desserts, to major retailers and foodservice providers.

Meat, Poultry, and Seafood

The company supplies a variety of meat, poultry, and seafood products, including cooked and raw options, to retailers and foodservice providers.

Deli and Bakery Products

Bakkavor Group plc provides a range of deli and bakery products, including sandwiches, wraps, and baked goods, to retailers and foodservice providers.

Pizza and Italian Products

The company offers a variety of pizza and Italian products, including pizza bases, sauces, and toppings, to retailers and foodservice providers.

Salads and Fruit Products

Bakkavor Group plc supplies a range of salads and fruit products, including prepared salads, fruit salads, and fruit pots, to retailers and foodservice providers.

Desserts and Cakes

The company provides a variety of desserts and cakes, including cakes, pastries, and desserts, to retailers and foodservice providers.

8. Bakkavor Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bakkavor Group plc operates in the food manufacturing industry, where substitutes are available, but the company's strong brand presence and quality products reduce the threat of substitutes.

Bargaining Power Of Customers

Bakkavor Group plc's customers, including major retailers, have significant bargaining power due to their large scale of operations and ability to switch suppliers.

Bargaining Power Of Suppliers

Bakkavor Group plc has a diversified supplier base, which reduces the bargaining power of individual suppliers, and the company's scale of operations also gives it negotiating power.

Threat Of New Entrants

The food manufacturing industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which reduces the threat of new entrants.

Intensity Of Rivalry

The food manufacturing industry is competitive, but Bakkavor Group plc's strong brand presence, quality products, and diversified customer base reduce the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.27%
Debt Cost 7.00%
Equity Weight 68.73%
Equity Cost 7.00%
WACC 7.00%
Leverage 45.51%

11. Quality Control: Bakkavor Group plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 5.7/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.31$

Current Price

2.31$

Potential

-0.00%

Expected Cash-Flows