2 Sisters owner still in the red despite £3bn sales

By Gwen Ridler

- Last updated on GMT

2 Sisters owner Bopraran Holdings reported an after tax loss of £37.5m
2 Sisters owner Bopraran Holdings reported an after tax loss of £37.5m

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2 Sisters Food Group owner Boparan Holdings has reported sales and operational profit growth in its financial results for the year ended 29 July 2023, but exceptional items and net finance charges landed the group further into the red.

Boparan Holdings saw turnover grow 10.1% to £3bn, largely driven by underlying price increases due to inflation. A £6m boost to operating profit (£43.8m) was achieved despite a substantial increase in inflation in the group’s main cost components throughout the year.

However, the group reported a loss after tax of £37.5m, up from £33.3m in the previous year.

Boparan Holdings was hit with exceptional costs of £8.6m associated with the closure of its Llangefni site last year – a total cost of £11.4m, partly offset by the remeasurement of an ‘onerous lease provision’ following successful negotiations with the landlord.

Finance costs rise

Finance costs were also £13.5m higher than last year at £62.3m, driven by the effect of higher interest rates on the group floating rate debt. This was further influenced by the full year effect of new financing taken part way through last year.

Boparan Holdings executive chairman Richard Pennycook highlighted the challenges his business, and indeed the rest of the industry, faced over the past three years – COVID, Brexit, the escalation of the war in Ukraine and the cost of living crisis.

“Similar to the rest of the industry, at times that has been extremely rough, but it has shown the resilience of the group and it gives us confidence as a board that we can handle pretty much whatever comes our way,”​ said Pennycook.

“We’re looking at a lot of opportunity in the business, now that it’s right sized, to think about investment for the future, capacity for growth and most importantly driving forward our new sustainability strategy ‘Better for All’.

“If we enjoy a period of stability with less volatility, then we can see many opportunities ahead and we’re poised to take advantage of those.”

Poultry sales

Poultry made up a majority of Boparan’s sales (£2.44bn), while its Meals & Bakery segment brough in £590m. Poultry saw a boost thanks to an increase in demand for higher welfare birds in Europe, as well as a rebalanced supply and reduced fixed costs in the wake of the Llangefni site’s closure.

“I am incredibly proud of how the entire team has responded to the many challenges and our ability to handle all these headwinds,”​ Pennycook added. “But of course, we also have to reflect on our resilience if we get hit by any other obstacles and our track record of the last three years gives us that confidence.

“So, the board views the future as one of opportunity to make further meaningful progress in delivering our strategic objectives but also one where we are ready if there are continued bumps in the road.”

Meanwhile, Supermarket chain Asda has announced that it has refinanced more than £3.2bn of its debt.

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