Boparan profits fall after 2 Sisters’ poultry plant closure

By Mike Stones

- Last updated on GMT

Ranjit Boparan: ‘We are taking action now to improve margin performance ...’
Ranjit Boparan: ‘We are taking action now to improve margin performance ...’

Related tags West bromwich Marketing

Boparan Holdings has reported operating profit down by 57.6% to £8.4M – after the temporary closure of its 2 Sisters’ West Bromwich poultry plant – in its first-quarter results.

Earnings before interest, tax, depreciation and amortisation fell by £32.1M to £151.3M during the 13 weeks to October 28 2017.

Total sales climbed by 3.8% to £849M, while like-for-like sales were up 3.1% year-on-year. Net debt rose by £46M to £823.6M in the first quarter of the firm’s 2017/2018 financial year. 

Ranjit Boparan, 2 Sisters Food Group ceo, said the business had grown revenues during the first quarter, despite the tough market environment.

“As well as commodity inflation, our results have also been affected by the temporary suspension of operations at our​ [West Bromwich] poultry cutting plant,” ​said Boparan.

‘Action now to improve margin performance’

“We are taking action now to improve margin performance and we should see the results of this coming through in the second half of the year, as we work through our plans to strengthen our business in all areas.”

The company confirmed the scandal-hit West Bromwich plant restarted supplies to most customers on November 6. The Food Standards Agency had a permanent presence on the site and work was underway to extend CCTV coverage and other forms of monitoring was underway.

Boparan Holdings said in a statement: “Despite progress with price recovery and efficiency programmes, higher commodity prices and continued disruption following the suspension of production at Site D ​[West Bromwich] are proving difficult to mitigate in the short term.”

‘The suspension of production’

But the business remained optimistic that its change programme, coupled with some softening in commodity prices will improve its position in the second half of the financial year.

“Our core businesses operate in attractive, growing markets and our broad reach means we can benefit from operational and commercial efficiencies,”​ said the statement.

“Our commitment to producing safe and quality food remains at the heart of the business, as does our determination to deliver a stronger overall position as the financial year progresses.”

Read about the performance of Boparan Holdings’ divisions in the box below.

Meanwhile, Boparan Holdings reported a £26M drop in operating profit ​in its full-year results, for the period to July 29 2017.


Boparan Holdings’ first-quarter divisional performance


  • Like-for-like sales were up 3.7% at £578.8M
  • Like-for like operating profit was down by £4.9M to £1.2M, driven mainly by the temporary suspension of operations at West Bromwich


  • Like-for-like sales fell to £151.7M from £156.8M in the first quarter of last year
  • Like-for-like operating profit fell to £1.8M, compared with £3.4M in the first quarter of last year, due to previously reported pizza contract losses
  • Division continues to be hit by further commodity inflation; particularly in core ingredients such as dairy


  • Like-for-like sales increase of 9.6% to £118.5M
  • Like-for-like operating profit fell to £5.4M, due to further commodity inflation pressures
  • In Frozen, price recovery, cost reduction and volume growth were insufficient to offset increases in dairy and fish prices
  • Biscuits benefited from key retailers introducing their Christmas ranges earlier than last year, along with some price recovery and innovation savings
  • This was offset by a further wave of commodity inflation and labour cost increases 

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