2 Sisters Q3 profits slump despite increase in sales
Boparan Holdings, owner of 2 Sisters Food Group, has revealed a 39.4% drop in like-for-like operating profits, in what has been described as a “tough trading quarter for the business”, despite total sales rising by 4.8% to £812.9 million year-on-year.
Like-for-like operating profits for the group dropped to £13.1 million for the 13 weeks ending 29th April, compared to £21.6 million the year before.
The company cited cost inflation, avian flu in Europe, along with disruption and redundancy costs for the dent in profits, noting that it was working closely with customers on inflation price recovery.
Like-for-like sales were up 3.1% to £809 million, with the protein division reporting strong sales progress year-on-year, up 4.7% at £566.8 million. However, operating profit in the division was down by £2.2 million to £6.7 million, reportedly driven by the impact of Avian Influenza on the European poultry business.
According to the results, primal poultry continued to enjoy strong underlying volume growth, while the group’s chilled division saw flat like-for-like sales at £148 million and an operating loss of £0.3 million.
The branded division also reported broadly flat like-for-like sales of £94.2 million in the same period, but overall operating profit dropped to £7.3 million from £9.8 million.
2 Sisters Food Group chief executive, Ranjit Singh, commented: “The competitive landscape remains challenging and our sector faces currency fluctuations which have brought about higher input prices. In addition, our European poultry export business in both Poland and the Netherlands has been affected by Avian Influenza outbreaks on the continent, and we have experienced some restructuring costs elsewhere in the business.”
In its results, Boparan noted that “action on price recovery, efficiency and targeted investments should pay off”, as the financial year closes in to an end.
Singh added that the group’s Better Before Bigger strategy will achieve its long-term ambitions, noting: “We see no major changes to the external environment for the rest of the financial year.
We remain resilient, adaptable and as committed as ever to deliver for our customers.”
Along with the results, 2 Sisters also revealed the appointment of Richard Pike as its new group chief financial officer, taking over from Stephen Leadbeater, who has decided to step down due to personal reasons. Pike will join 2 Sisters on 17th July, while Leadbeater will be retained as a consultant until the end of the calendar year.
In addition, the group’s current chief operating officer Martyn Fletcher is set to join the Boparan Holdings Limited board on 1st July.