Convenience food manufacturer Geest has announced pre-tax profits of £34.4m for the year, which coincides with its recommendation that its shareholders accept a takeover bid from Icelandic food group Bakkavor, which values the convenience food manufacturer at £485m.

Underlying operating profit for the company was down by 4% to £39.3m, due to the cost of new business in France and the loss of some flowers business in the UK.

Total profit was up by 20% to £36.6m, from £30.4m in 2003, and Geest’s chairman, John Banham, said: “These results are a good achievement in a difficult year in which there was an unprecedented level of competition between food retailers.

“Geest remains in good shape to continue to manage market pressures in the food retail environment, which is expected to remain challenging, and to fulfil strong consumer demand for fresh prepared foods in the UK and on the Continent.”

In response to the proposed takeover bid, chief executive officer of Geest, Gareth Voyle, said that Bakkavor’s proposal represented good value for shareholders, and added: “The food retailing market has changed dramatically in the last two years and, whilst Geest is well positioned, there is no doubt that price competition will continue to dominate the day-to-day grocery trade. Upon completion, this deal will bring together two of the best fresh food players in our industry.”

The scheme is expected to become effective on May 13.
Executive chairman of Bakkavor, Agust Gudmundsson, said: “Our stated ambition has always been to grow our business organically and through strategic acquisitions whilst maintaining our entrepreneurial ethos.

“Adding Geest to the Bakkavor portfolio will enable us to exploit our combined strengths through first, the partnerships we have with our customers and second, by focusing on continuous improvement in our quality of service and evolving innovative premium product offering.”


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