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Losses soar at struggling Black Country food giant 2 Sisters

Losses have soared at the struggling 2 Sisters Food group in recent months, but bosses say a new management team is accelerating turnaround efforts as it sells off its red meat business and Goodfellas pizza.

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Ronald Kers is the new chief executive at 2 Sisters Food Group

Figures from parent company Boparan Holdings show sales in the last three months of its financial year were up just 1.5 per cent to £694 million.

But pre-tax losses tripled to £53.8 million, up from 17.6m at the same point a year ago.

It comes after a year that has seen Ranjit Singh Boparan, who founded the business 25 years ago and became known as the Black Country Chicken King, stepped down as chief executive to become president.

2 Sisters founder Ranjit Singh Boparan is now president of the company

New chief executive Ron Kers, recruited from dairy giant Muller, said the results were due to a combination of a difficult economic backdrop and 'he challenges we have faced in our own business'.

The company has both a new chief executive and new finance officer, with a new tranformation team which Boparan says is'on track to build sustainable improvements in the new financial year'.

That has already seen it strengthen its balance sheet, slashing 193m from its debt pile, down to £601.8m.

Sell-offs including its Manton Wood sandwiches business are expected to raise £370m and the business is pulling out of loss-making sites.

A plant in Bevan Way in Smethwick closed earlier this year, resulting in the loss of around 300 jobs. Another 290 were redeployed to other sites.

The 2 Sisters factory in Wolverhampton, in Lincoln Street, was also in line for closure but won a reprieve this summer, saving the jobs of 150 people as it converted to a seven-day-a-week operation.

The 2 Sisters factory in Wolverhampton had faced closure but won a reprieve this summer

2 Sisters includes Fox’s Biscuits and is the UK’s biggest chicken processor, supplying Tesco, Sainsbury’s M&S, Aldi and Lidl.

Based in Birmingham, it ran into trouble last year after a hygiene scandal at its major West Bromwich plant, which resulted in a month-long closure and retraining for all 850 staff working there.

Today, chief executive Ronald Kers said: “Our Q4 results reflect the difficult macro-economic backdrop and the challenges we have faced in our own business. Against this backdrop we have a clear strategic plan which we are executing at pace to improve business performance."

Alongside the turnaround, 2 Sisters had signed up a 'significant' new customer contract for its chilled foods business, he said.

Mr Kers added: "By focusing on our core with a new team, we are laying strong foundations for a more consistently performing and profitable future. I expect to see the margin improvements associated with the turnaround programme from our third quarter onwards.”

2 Sisters' profits were hit by a 'harsh' operating environment hit by price pressures, inflation, the weak pound and the weather, as well as underperformance in parts of the business, including the impact of site closures.