Bakkavör Group's Results for Q3 and the First Nine Months 2009

Significantly improved EBITDA* margin in Q3 2009 at 10.6% compared to 7.7% in Q3 2008. Net Profit of £4.2 million in 9M compared with a loss of £55.9 million in 9M 2008, a significant turnaround of £60.1 million.

27 Nov 2009 --- Ágúst Gudmundsson, Chief Executive Officer: With our EBITDA up 45% in Q3 2009, our results demonstrate that we are achieving a strong recovery in the Group's performance and are well on track to achieve our full-year forecast. We are once again generating good cashflow, reflecting the improved profitability of the business and greater control of working capital. The improved profit performance was underpinned by increased sales volumes and improved operational efficiencies generated through our restructuring activities. This was achieved despite the backdrop of a challenging trading environment with increased promotional costs and on-going inflationary pressures.

We are making strong headway in our core UK fresh prepared foods business driven by sales uplifts of 13% in ready meals in Q3 2009, reflecting our solid market position in our key categories.

Furthermore, 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. Discussions on the final terms of the agreement are ongoing and we expect to announce a conclusion shortly. This is an important milestone in securing the funding of the Group and follows the successful refinancing of the operating businesses, which are funded independently of the holding company, and have fully committed facilities to March 2012. 

Whilst we expect trading conditions to remain challenging we are very confident that the actions we have taken and the fundamental growth proposition we offer will drive significant profit growth in the years to come.