2 Sisters business threatened by avian influenza

By Michelle Perrett

- Last updated on GMT

2 Sisters filed the financial report at Companies House
2 Sisters filed the financial report at Companies House

Related tags Avian influenza Influenza

Poultry processor 2 Sisters Food Group said that the onslaught of avian influenza, negative consumer sentiment following campylobacter reporting and food deflation impacted its financial results for the year ending August 1 2015.

In its annual report filed at Companies House last week it revealed that losses on ordinary activities had hit £36.3bn for the year up from £21.8bn the previous year. 

Turnover for the 52 weeks to August 1 2015 hit £944.8bn, down from £992.7bn, while gross profit hit £45.9bn, down from £75.9bn the previous year.

External risks

The company said it was facing a number of external risks outside of its day-to-day control. The key risk it identified was avian flu and it was developing contingency plans should there be further outbreaks in the UK.

2 Sisters also highlighted the impact of the UK supermarkets, which were its main customers. 2 Sisters said the strength of these customers combined with competitive pressures in the industry “represent continuing risks”​. The result, it claimed, could be a loss of sales to key competitors.

It said: “Further risks – such as changing consumer trends, food safety and exposure to price and supply fluctuations for raw materials and services – are managed on a group-wide basis.”

However, it said that positive volume trends experienced in the latter half of the year indicated progress in mitigating these market-wide issues.

Contingency plans

Stephen Leadbeater, chief financial officer at 2 Sisters, said: “The company has developed contingency plans should an outbreak of avian Influenza occur in close proximity to any of its operational facilities and has operations spread geographically throughout the UK to minimise risk.

“The company seeks to manage the risks presented by its consolidated customer base, and the highly competitive environment that characterises the industry.”

Meanwhile, last month reports emerged of joint venture talks​ between 2 Sisters and Northern Ireland meat processor Dunbia. The talks were said to focus on a joint venture centreing on the two firms’ red meat businesses.

Both firms remained tight lipped about the prospect.

Last month, 2 Sisters boss Ranjit Singh, the founder of Boparan Holdings, purchased Grove Farms Turkey business, in what was understood to be a private deal​.

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