2 Sisters boss reports ‘encouraging performance’

By Michelle Perrett

- Last updated on GMT

Boparan boss Ranjit Singh said the business has achieved encouraging performance in tough markets
Boparan boss Ranjit Singh said the business has achieved encouraging performance in tough markets

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Boparan Holdings, the parent company for 2 Sisters Food Group, has unveiled third quarter (Q3) results, said to show an “encouraging performance in tough markets”.

Total sales for the period, which covered the 13 weeks ended April 30, 2016, reached £784.5M, up 0.6% from £779.7M for the same period last year.

Operating profit was up 15.9% from £18.9M to £21.9M. 

Like-for-like (LFL) operating profit was up 13.2% from £18.9M to £21.4M, while LFL profit margin 
was 2.8% compared with 2.4% for Q3 of 2015.

Ranjit Singh, 2 Sisters Food Group ceo, said it was a “positive performance” ​despite “the volatile grocery market, deflationary pressure and uncertainties around the EU Referendum”.

LFL sales in its protein division were down 2.6% to £533.3M (Q3 2014/15: £547.3M). Operating profit was £8.9M (Q3 2014/15: £9.4M).

It said the marginal decline in LFL sales was as a result of continuing price deflation, combined with a temporary loss of sales in red meat.

Retail investment in price

Poultry sales to retailers was strengthening, it said, due to retail investment in price. Boparan Holdings also said it had won new business which would begin to come through in its new financial year.

The poultry division renewed contracts with a discount customer, won additional frozen BBQ and Scottish fresh whole bird business and would also be increasing its share of rotisserie poultry from June, moving to sole supplier status with a leading UK retail chain.

The chilled division saw LFL sales increase by 2.3% to £148.7M, compared with £145.3M in the third quarter of 2014/15.

Operating profit was up by 44% to £2.6M, from £1.8M in the same quarter of 2014/15. The gain was driven by improved market share and new product launches, it said.

The business was investing £6M at its Food To Go site in Nottinghamshire to accommodate extra business and install new equipment.

The re-launch of its Indian ready meals saw market share increase “substantially”, ​it said.

Food To Go continued to make “good progress”​ with more than 30 new product launches, including the new ultrathin premium pizza and deli roll ranges.

The branded division saw LFL sales rise by 4.5% to £91M, compared with £87.1M in the third quarter of the previous financial year.

Operating profit increased by 35% to £10.4M from £7.7M.

Investment in new ranges

Investment in new ranges of Fox’s Biscuits saw sales and market share up “substantially”​ over the quarter, it said.

In the frozen division, the Goodfella’s brand continued to grow, with brand share up 2% in the third quarter. The division won new own-label retailer contracts in pizza, which will start production in the first quarter of 2017.

New pastry contracts with major UK retailers started in this quarter, according to the business.

Singh said: “Our investment programme continues at pace. We are investing to improve efficiency and delivery, fundamentally changing the supply chain,

Our strategic investment project continues on time and to budget, with a £6M extension and equipment upgrade at one of our facilities in Nottinghamshire.

“A major upgrade of our Scunthorpe poultry facility has started, other capital works at Carlisle and Rogerstone are now complete.​ ,

Singh added that the Pennine factory remained on track for completion next year. With some production now live at our Added Value site in Derby, this will enable us to accelerate our protein footprint programme quicker without increasing cost.”

2 Sisters’ busy year, so far

June 2016:​ 2 Sister boss Ranjit Singh Boparan acquires Giraffe restaurant from Tesco

May 2016:​ 2 Sisters faces strikes at three plants over changes to wages, terms and conditions

May 2016:​ 2 Sisters’ boss Boparan warns against Brexit claiming it could spell disaster for the food industry

April 2016: ​2 Sisters’ boss Boparan is to acquire Grove Farms Turkey business in Monaghan, Ireland

April 2016:​ 2 Sisters and Dunbia remain tight-lipped on talks to form a joint venture

Jan 2016:​ Renewed speculation suggested that Boparan Holdings could be looking to sell Fox’s Biscuits

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