Boparan profits take hit in first quarter
Boparan Holdings, the parent company for 2 Sisters Food Group, has seen its operating profit drop by 57.6% at £8.4 million in its first quarter results for 2017-18.
The drop is thought to be due to the temporary suspension of operations at 2 Sisters Food Group’s poultry cutting plant (Site D) and what has been described as “tough market environment”.
Like-for-like sales were up by 3.1% to £849 million in the 13 weeks ending 28th October 2017, while earnings before interest, tax, depreciation and amortisation fell by £32.1 million to £151.3 million during the same period.
Total sales enjoyed a 3.8% boost at £849 million, despite the site’s suspension, with like-for-like sales in the protein division being up 3.7% at £578.8 million.
According to the company, the UK poultry business has benefitted from “strong volume growth underpinned by the substantial upgrade of our facility in Scunthorpe”, adding that “cost reduction exercises in our red meat business are now delivering and we have begun to recover some of the commodity inflation impacts seen in the previous quarters”.
However, it noted that “this has been more than offset by further inflation in other areas and the impact of the temporary Site D suspension”.
Ranjit Singh, 2 Sisters Food Group CEO, commented: “Despite the tough market environment, we have grown revenues during the first quarter and have worked hard to deliver for customers.
“As well as commodity inflation, our results have also been affected by the temporary suspension of operations at our poultry cutting plant (Site D). 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.”
Regarding Site D, in West Bromwich, the company highlighted that the Food Standards Agency is now “a permanent presence on site, and work on extending CCTV coverage and its continual monitoring is now well underway”.