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2 Sisters to restore Brookes Avana within two years

By Dan Colombini , 23-Jan-2012
Last updated the 23-Jan-2012 at 12:43 GMT

2 Sisters Food Group’s chilled food business Brookes Avana, acquired from Premier Foods last year, will be returned to profitability within two years, according to its new owners.

The firm, owned by food magnate Ranjit Boparan, has claimed that due to its “strong customer relationships” and an increased focus on cost, Brookes Avana’s fortunes will be turned around by 2014.

The business was acquired from rival food giant Premier Foods in a £30M deal on December 8 last year, with analysts describing it as “a win-win deal”.

Brookes Avana had been expected to see reduced sales and an increased trading loss in 2011, due to contract losses under the previous ownership, a statement from 2 Sisters revealed.

However it is now confident that the business will be restored to profitability.

Profitability

The firm said: “The business has a good track record of delivering high-quality products for its customers. We believe that with our strong customer relationships, focus on cost and Brookes Avana’s high quality heritage, we can return the business to profitability over the next 12 to 14 months.”

2 Sisters made the announcement as part of its first quarterly results for the period ending October 29, 2011.

The West-Bromwich-based group, which also acquired Northern Foods last year following a struggle with Irish firm Greencore, posted strong results for the quarter.

The firm saw like-for-like sales rise by 10% on adjusted basis, with revenue reaching £565M for the period.

Sales in the business’s poultry division were also up 13.2%, along with an increase in sales of 9.6% in the chilled foods sector.

This was driven by strong product offerings across ready meals, sandwiches, salads and pizza offerings.

Like-for-like branded sales were up 4.2%, the firm revealed, reflecting a return to sales growth in its frozen division. This offset slower growth in the biscuit market.

Value to the customer

Boparan said: “The first quarter of our new financial year has seen a solid start, despite the continued challenging trading and consumer environment. We have recorded strong sales growth as we work closely with our customers to deliver value to the consumer.

“The second quarter is progressing in line with our plan and we expect our Christmas performance will have been solid, albeit in an increasingly promotionally driven trading environment which will constrain Q2 margins.”

The firm also revealed that is expecting a “solid” trading performance for its second quarter, despite the “challenging and increasingly promotional” Christmas period.

As we start 2012, we retain our cautious outlook for the year as a whole, reflecting the headwinds of a competitive market and increased promotion,” the firm said.

Wider economic challenges, continued high commodity and other input costs, and increasingly cash conscious consumers were also concerns.

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