Vion consolidation and horsemeat hits 2 Sisters profit

Reporting on results for the 52 weeks to July 27, ceo Ranjit Boparan said: “Trading conditions have been very tough with inflation impacting cash-squeezed consumers and the impact of the horsemeat scandal on the food sector.​

“By working with our customers we delivered good sales growth although profitability was lower due to the impact of the headwinds in chilled and dilution from the Vion acquisition.”​

While acknowledging Vion’s poultry operations were currently making a loss, Boparan said he hoped to bring them to break-even next year.

Consolidation​

Consolidation of manufacturing facilities, including three site closures and the recently announced closure of Haughley Park, would help improve profitability and efficiencies, he added.

Meanwhile, the firm aims to achieve strong sales in protein and to build new business. The division’s success had been driven by inflation and business gains, it said, with like-for-like sales 9.25% ahead of last year and 18.2% ahead in the final quarter of the year (Q4).

A business restructuring and new board appointments, comprising directors for chilled & branded; commercial & marketing; innovation; and agriculture, would help strengthen performance.

The new agriculture director would spearhead quality and agriculture strategy across the protein division, the company said.

Branded sales recovering​

And it said branded sales were recovering, driven by frozen food and a new biscuits team for its Fox’s range.

It expected the economy to remain tough, with chilled meat product sales, inflation and tight household budgets turning the screws on performance.

Boparan Holdings reported like-for-like annual sales, excluding turnover from the new Vion poultry and red meat interests, up 5.6%, from £2.32bn to £2.45bn.

However, like-for-like operating profit, excluding effects from the Vion acquisition, fell by 3.9%, from £107.7M to £103.5M. Like-for-like Q4 operating profit was slightly ahead of last year.