The group’s operating profit fell 24.5% to £68.3M in the year ending July 29 2017. The company’s operating profit dropped 47.4% to £15.4M during the fourth quarter of the year, compared with last year.
Sales were up 5.1% to £3.28bn for the year, while like-for-like sales grew 2.9% to £3.22bn. Boparan’s fourth-quarter sales were up 5.3% to £815.7M compared with last year.
Commenting on the results, 2 Sisters ceo Ranjit Boparan said: “The business continues to face an extremely tough trading environment with further increases in input costs.
“Clearly, margin performance improvement is a top priority and this will be underpinned by working hard on the action plans that make the most difference to our core business.”
Negatively affected Boparan Holding’s margins
He added that cost inflation had negatively affected Boparan Holding’s margins. But the company was taking action to mitigate the impact of this.
“Whilst this will not happen overnight, our management team are focused on delivering our step change plan to enable us to continue on our journey of producing high quality and safe food,” said Boparan.
The company’s poultry division, including 2 Sisters, saw operating profit drop by more than half to £5.4M in the fourth quarter.
The loss of a pizza contract meant Boparan’s chilled food sales fell 6.2% to £131.6M in the fourth quarter, while operating profit dropped by more than half to £2M.
Boparan Holding’s results come as 2 Sisters restarted production at its scandal hit West Bromwich factory this week, which had been shut down following allegations of food safety breaches.
Allegations of food safety breaches
The planned reopening followed “comprehensive retraining sessions” by the company with the factory’s staff last month.
Staff from the Food Standards Agency (FSA) would be on site at all times, said the poultry processor. CCTV coverage of the factory had been extended and monitored 24 hours a day, seven days a week.
Boparan Holdings said it would feel the financial impact of the undercover investigation by The Guardian and ITV News in its first quarter results for the 2017/18 period.
The investigation claimed workers disguised the slaughter location and date of some chicken in moves, which could result in consumers buying meat past its use-by date.
Last month, the Environment, Food and Rural Affairs select committee called Ranjit Boparan to a parliamentary hearing, where he was grilled on the safety of 2 Sisters’ West Bromwich plant.
Boparan Holding’s full year 2016/17results – at a glance
- Total sales up 5.1% to £3.28bn
- Life-for-like sales up 2.9% to £3.22bn
- Operating profit down 24.5% to £68.3M
- Like-for-like operating profit down 28.7% to £64.5M