Losses escalate at Boparan Holdings as Vion acquisition continues to impact
BOPARAN Holdings, the holding company for Birmingham-based 2 Sisters Food Group, has seen second quarter losses widen to £27.5m from £12.3m a year ago. The loss is despite a 35% growth in total sales over the period when compared with the corresponding quarter in 2013.
The group’s performance continues to be impacted by the acquisition of Vion UK’s Poultry and Red Meat businesses.
Total sales over the quarter were £848m (2013: £626.5m), while like-for-like sales were £647.2m (2013: £623m). Operating profit before exceptional items was £13.3m (2013: £26.2m). Net debt was also up, standing at £572.3m – an increase of £47.8m.
The firm said the tough trading conditions experienced during the quarter to January 25, 2014, were in line with what had been expected.
It said there had been a good performance across its protein range and the Vion integration was progressing to plan. There had also been an improvement in its branded range but the chilled products performance was impacted by significant investment in the launch of around 1,000 new products for the autumn season and the delivery of Christmas ranges.
The group said its focus now was on investing in growth and lowering its cost base. So far as the latter is concerned, the group has closed its operation in Haughley Park and is addressing higher poultry costs in Scotland.
It has also announced consultations on its operations at Corby and Avana.
Ranjit Singh, CEO of 2 Sisters Food Group, said: “This has been a very challenging quarter, but we delivered a creditable performance in Q2, despite the tough and competitive market conditions.
“We delivered for our customers over the key Christmas trading period, but in line with expectations, this impacted profitability in Chilled due to the significant investment made in product launches and disruption costs of new ranges. Protein made good progress with the integration of Vion on plan, we continued to make steady progress in Branded and we are taking actions to address Chilled performance and investing in capacity to meet our customer growth plans.”
He said the group’s strategy remained to work with customers to drive organic growth aligned with its experience of turning around acquired businesses and integrating them into the group to deliver long-term benefits.
“We continue to invest in capacity 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 Q1, regrettably on February 7 we announced consultation on the future of the sites at Corby and Avana.”