Like-for-like (LFL) sales were 2.3% down at £787.9M, while operating profit in the firm’s first quarter fell by 17.7% to £18.1M.
Branded division LFL sales rose by 0.2% to £101.3M, with operating profit increasing by more than 100% to £8.6M.
LFL operating profit was 15.5% down at £18.6M.
Net debt during the quarter was up by £45.1M to £726.3M.
2 Sisters Food Group ceo Ranjit Singh remained optimistic, despite the results: “The progress we experienced in Q4 [the fourth quarter] continues in the first quarter as we continue to meet our objective of building a better business,” said Singh.
‘Costs, efficiency, investment, innovation’
“Our focus on costs, efficiency, investment, innovation and deepening customer relationships remain paramount. With the progress we saw in the fourth quarter continuing, we expect to see our hard work bearing fruit as the year progresses.”
Singh said the business was committed to working in partnership with customers to provide the food people wanted to eat at the right price. “This has been reflected in the important successes we have achieved in category reviews and new product development, with notable successes for poultry products, red meat, pizzas, wraps and frozen fish.”
The firm’s branded business had delivered innovation, with the roll out of Goodfella’s sweet and gluten-free pizza in the UK, successful new brand extensions for Fox’s biscuits and a range of Disney branded products, he claimed.
- Focus on costs
- Deepening customer relationships
The firm was working to implement the £150M investment programme, which will “revolutionise the supply chain”.
In Boparan Holding’s ready meals division, work had started at both Pennine and Rogerstone sites, with the latter due to complete in mid-2016.
Commenting indirectly on the acquisition of the old S&A Foods site in Derby, Singh said: “… we are now leasing an additional site in Derbyshire”, which will increase capacity and facilitate the Protein Footprint Programme more quickly without increased cost.
“We have the right strategy, a relentless commitment to great food, innovation and efficiency, and are building great relationships with both our major suppliers and customers,” said Singh.
How the divisions performed
- Protein: LFL sales down 2% to £538.6M in Q1. Operating profit was £8.6M compared with £15.5M in Q1 2014/15
- Chilled: LFL sales down 5.1% to £148M compared with £155.9M in the same period last year. The fall reflects the impact of sandwich contracts not renewed last year. Operating profit was £0.9M compared with £2.3M in 2014/15. Division to focus on improving efficiency, product taste and innovation
- Branded: LFL sales up 0.2% to £101.3M. Oprating profit up by over 100% to £8.6M. “Our investments in quality and marketing at Fox’s Biscuits have helped us deliver a strong performance in biscuits, despite a competitive environment, with sales up substantially over the quarter.”
- Frozen: Pizza sales said to be performing well, as business won “a new major frozen pizza contract which will start contributing to the business in Q2 of this financial year”. The regional TV campaign from Holland’s Pies helped drive store distribution and widen the brands’ appeal, said the firm.