Sales grow but profits fall for 2 Sisters
The parent business of 2 Sisters Food Group, which has been at the centre of a hygiene breach scandal at its chicken processing factory in West Bromwich, has reported improved sales but a pre-tax loss in the last quarter of its financial year.
Boparan Holdings saw total sales up 5.3 per cent to £815.7 million for the 13 weeks to July 29 with pre-tax loss of £17.6m down from a profit of £5.4m a year before.
For the year sales rose 5.1 per cent to £3.28 billion and pre-tax profit down £40.6m from 2015-2016 to £22.8m.
The factory in Dial Lane at the centre of the scandal suspended operations on October 1, which will impact results for the first quarter of 2017-2018.
The Birmingham-headquartered business said that following a comprehensive colleague retraining programme the site resumed supply to customers on Monday.
Chief executive of 2 Sisters Food Group Ranjit Singh Boparan said: “The business continues to face into an extremely tough trading environment with further increases in input costs. Clearly margin performance improvement is a top priority, and this will be underpinned by working hard on the action plans that make the most difference to our core business. Nevertheless, we remain positive about our top line growth and how that positions us with our customers.
“We continue to progress our poultry footprint changes, which delivers quality, safety and a shorter, leaner, more transparent supply chain. We are investing in our people and our sites, with a view to optimising available capacity.
“Our meals division has benefitted from rationalisation and investment which will also provide a springboard for further growth. However, as with our branded businesses, cost inflation has negatively affected margins, and our teams are taking ongoing actions to redress the balance.
“Whilst this will not happen overnight, our management team are focused on delivering our step change plan to enable us to continue on our journey of producing high quality and safe food.”
The group said it had been affected by several exceptional items during the quarter with the most significant drivers of these costs related to financial reporting and control issues at one of its small standalone businesses, impairment of assets as a result of this, together with redundancy and disruption costs relating to a poultry site closure in the last quarter.
It said its UK poultry business had continued to enjoy strong underlying volume growth and the European business has stabilised after the avian influenza issues suffered earlier in the year.
Boparan said it remained a solid business with attractive growing core poultry and chilled markets with the scale to maximise efficiencies and margin and it remained committed to its step change programme to deliver for customers on safety and quality.
"We have a clear strategy to turnaround each business but recognise that this will take time. Once we successfully negotiate our way through short term issues, we will be in a stronger position to deliver growth," it said in its latest results statement.
