Boparan Holdings losses widen to £27.5M
Tough trading conditions were expected for the quarter, which ended on January 25 2014, the company said in its trading update yesterday (March 18).
The update showed like-for-like operating profits before exceptional items had dropped by £12.8M to £13M and net debt rose by £47M to £572M.
Chilled down by 5.5%
Sales of chilled food were down by 5.5%, which was in line with expectations, following the company’s heavy investment in the re-launch of its ready-meals. The proposed closure of 2 Sister’s Corby and Avana sites were announced earlier this year, threatening 1,500 jobs, in attempt to reverse the category’s decline.
2 Sister’s ceo Ranjit Boparan said: “We continue to invest in capacity and to fuel our growth and to address our cost base, which means we have to make tough decisions and following the exit of two sites in first quarter, regrettably on February 7 2014, we announced consultation on the future of the sites at Corby and Avana.”
There was good performance across the company’s protein category, with sales increasing by 13% and the integration of Vion into the business going to plan and set to return to profit, claimed the firm.
Substantial investment
Measures to address higher poultry prices in Scotland were underway with the closure of 2 Sister’s Letham site and a change in shifts at its Coupar Angus site. There were also plans to invest substantially in the company’s Cambuslang poultry cooking site in Scotland, the update said.
Branded foods saw like-for-like decline of 3.6%, but the decline was lower than the second quarter of last year, due to an increase in new product launches, better promotions and better cost management.
New branded product launches are also expected to boost sales across 2 Sister’s bakery category, following the launch of its Goodfella’s Extra Thin pizza bases and new biscuit lines.
“This has been a very challenging quarter, but we delivered a credible performance in Q2 [second quarter], despite the tough competitive market conditions,” said Boparan.
“Our strategy remains in working with our customers to drive organic growth, aligned with utilising our experience of turning around acquired businesses and integrating them into our group to bring about long-term growth benefits.”
