Boparan Holdings, the holding company for 2 Sisters Food Group, has reported strong progress in its third financial quarter (Q3), with its protein division contributing significantly to sales and profitability.
The firm reported total protein sales up by 18% to £536M, compared to Q3 last year, with like-for-like sales up 4.8% to £489.7M, driven by retailer promotions.
Profitability also improved compared to last year’s Q3. The company attributed this mainly to positive progress in integrating the assets it acquired from Vion last year , cost savings from restructuring its Scottish poultry business and restructuring its Coupar Angus facility .
“We expect to complete the capacity investment and consolidation of cooked meats at Cambuslang by the year end, following Haughley Park’s closure in the first half,” Boparan Holdings said in its Q3 statement. “We continue our strategy of diversifying the customer base for our European poultry business.”
Chilled division took a hit
2 Sisters’ chilled food division took a hit during the quarter, with like-for-like sales down by 0.5% and operating profit below last year’s Q3. However, sales and profitability had improved on the previous quarter, according to the results statement, and the firm highlighted its exit from its loss-making Solway Foods and Avana Bakeries salads and cakes businesses.
In addition, the company said it was investing in its meal solutions and specialist bakery sites to create a platform for future growth and improve efficiency.
Branded like-for-like sales also fell by 4.6% during the quarter, Boparan Holdings reported. However, operating profit in that division improved, pizza sales grew and it was looking to boost distribution for Holland’s Pies and launch new products, packaging and marketing for its Fox’s biscuits brand.
The company took a post-tax profit hit in the 13 weeks to April 26, reporting a loss of £28.6M, versus a loss of £8.2M in last year’s Q3. Net cash flow was squeezed to just £3.9M from £18.1M in the same period last year and net debts increased from £565.4M to £587.6M.
However, Boparan Holdings’ Q3 like-for-like operating profit before exceptional items rose from £16M in the same period last year to £22M on like-for-like sales up 2.4%, from £727.6M to £744.7M.
‘Platform for future growth’
“We are seeing the benefits of actions taken to improve profitability across our three divisions and are working with our customers to build a platform for future growth,” said 2 Sisters Food Group ceo Ranjit Boparan.
“We delivered strong sales performance in protein and made good progress with the Vion integration, driving profit improvement. The actions to address the challenges in chilled are stabilising the business and we continue to work towards initiatives to improve profitability such as exiting the unprofitable salads and cakes business.
“We are investing in capacity in our existing sites to drive efficiency and investing in innovation to provide great food at great value. This will drive long-term growth with our customers and help build a bigger and better business.”
Meanwhile, 2 Sisters announced the early retirement of chief financial officer (CFO) Steve Henderson, who has been replaced by Stephen Leadbeater with immediate effect . Leadbeater has extensive food industry experience, and his previous roles included CFO at Findus Group.