Losses increase at scandal-hit food giant
The problems at food giant 2 Sisters are mounting after the scandal-hit group revealed significant losses for the period before the start of its reputational crisis.
However it parent company Boparan Holdings insisted its problems were only “short term issues” and the group would then “be in a stronger position to deliver growth”.
Investors have been told there is “a clear strategy to turnaround each business” although it stressed that this will take time to achieve.
The Birmingham-based group recorded losses of £28.6m in the three months to July 29. This poor performance dragged full-year losses down to £37.7m, compared with a £1.4m loss the year before, despite sales increasing 5% to £3.29bn.
2 Sisters Food Group chief executive Ranjit Singh Boparan remains “positive about our top line growth” but acknowledged the pressures the group faces.
“The business continues to face into an extremely tough trading environment with further increases in input costs,” he said.
The group has been at the centre of several investigations into allegations of substandard practice at its West Bromwich factory known as Site D.
The claims about how it handled were first made in a Guardian/ITV investigation in September, which led to its major supermarket customers launching their own investigations and chief executive Ranjit Singh Boparan admitting “mistakes” were made when quizzed by a Parliamentary select committee.
Site D also closed for more than a month, at a reported cost of £500,000 per week, and only restarted production yesterday.
2 Sisters blamed commodity inflation in a statement to investors, which will also impact its next quarter’s results when it will also be hit by the impact of Site D’s closure.
It added: “Nevertheless, we remain a solid business, with attractive growing core poultry and chilled markets with the scale to maximise efficiencies and margin. We remain committed to our step change programme so we can deliver for our customers on safety and quality.”
