Boparan Holding’s like-for-like operating profit fell to £18M in the 13 weeks to January 28, from £21.9M. Like-for-like profit margins also fell to 2.3% from 2.8%, reflecting the challenging markets in the wake of the Brexit vote, the company said.
2 Sisters ceo Ranjit Singh said: ““Our results reflect the very tough trading environment we face. The market is as competitive as ever and currency fluctuations have brought about higher input prices. It is unsurprising that this has put a margin squeeze on a lot of businesses, including our own.
“The market will remain challenging, but as we continue to create a good environment for the long-term sustainability of the business, remain resilient and deliver for customers, our Better Before Bigger strategy will achieve our long-term ambitions.”
Boparan Holdings’ like-for-like sales increased 2.6% over the 13 weeks to £812.8M. The sales boost was driven by the manufacturer’s Chilled division, following launches of new fish, soup and sandwich products, the company said.
The Brands division was impacted by rising ingredient costs, Singh said, although frozen and biscuit ranges reported robust sales.
Rising ingredient costs
A nationwide outbreak of avian (bird) flu at the end of 2016 meant some of Boparan Holdings’ overseas markets were temporarily closed, Singh said. But, its impact was limited due to strict biosecurity measures, he added.
Looking forward, the manufacturer expected further challenges for the remainder of the year. Boparan Holdings was confident of driving profit and sales through efficiency and innovation programmes, it said.
Singh said: “There is underlying positive momentum across the business, as we have seen over the past four trading quarters. Sales are rising, and we are well positioned to grow with our customers in new markets.
“Investment projects in our Chilled division at a number of sites have improved quality and efficiency and the merger of functions across the division will bring substantial annualised savings.”
Boparan Holdings’ trading update – at a glance
- Like-for-like operating profit down 17.8%
- Like-for-like sales up 2.6%
- “Tough” market blamed for profit drop