Profit after exceptional items and before interest and tax was £2.1m for the 13 weeks ended 27 October 2018, a drop of £6.3m compared with the same period last year. Operating profit for the business took the biggest tumble, dropping 89.8% to £0.9m.
Like-for-like sales saw a slight increase for the reported period, up 0.2% from £706.7m to £708.3m. These results excluded the impact of Boparan’s disposals of the Goodfella’s Pizza and Red Meat businesses.
Strong commodity headwinds
Boparan blamed the loss in profit on strong commodity headwinds, as well as weaker biscuit sales volumes and phasing on seasonal lines. The Fox’s brand also experienced weaker sales during the reported period.
Commenting on the results, chief executive Ronald Kers said: “We have made it clear that the size of the turnaround challenge is substantial and to achieve success on this scale will take time.
“We have diagnosed the fundamental operational issues and the management team know what levers to pull to drive change through the organisation.”
In a statement issued with the results, Boparan said the turnaround could not be achieved overnight, but it was on track to build sustainable improvements within the financial year.
No benefits until Q3
However, the impact of this turnaround on margins will not be experienced until the third quarter of this financial year.
“There is an enormous amount of work still to do and it will take time before we see the green shoots of growth,” Kers added.
“However, we are focusing on our core with a new team, laying strong foundations for a more consistent performing and profitable business and have a plan of action which is realistic and can be executed.”
Boparan Holdings’ divisional performance
- Protein: Like-for-like sales up 0.4% to £470.8m from £469m, with a like-for-like operating loss of £3.1m (down 80.6% from a profit of £0.6m)
- Chilled: Like-for-like sales increase of 4.5% to £158.5m from £151.7m. Like-for-like operating profit rose by £0.8m to £2.6m
- Branded: Like-for-like sales fell by 8.1% to £79m from £86m, and like-for-like operating profit reduced to £1.4m from £3.1m