Birmingham food group’s profits up following restructuring
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Food group Boparan Holdings has revealed a 19% rise in like-for-like earnings as it continues to show progress in its turnaround strategy.
The Birmingham-headquartered business was affected by a hygiene scandal at its poultry plants and a downturn in the casual dining sector.
But its financial results are now showing some positive signs after its restructuring.
Like-for-like earnings in Q3 were up 19% to £21.9m.
Chief executive Ronald Kers said: “Lasting change cannot come about overnight, but these results do show our strategy is gaining momentum as green shoots begin to appear.”
The Boparan Restaurant Group operates a number of casual dining brands including Harry Ramsden’s, and is part of the same Boparan family of business that includes 2 Sisters Food Group.
The results follow a restructuring of the company in March, which saw 27 Giraffe and Ed’s Easy Diner restaurants close.
This week the group opened its fourth UK Slim Chickens restaurant in Birmingham’s Grand Central shopping centre at New Street Station in the same unit as one of the closed Ed’s Easy Diners.
The group says the results represent the first like-for-like year-on-year EBITDA growth in 10 quarters with the earnings growth driven by UK and EU Poultry businesses.
Like-for-like sales were up 1.2% to £663m (Q3 17/18: £655.4m) driven by growth in core businesses.
The results include the full quarter impact of closure of 5 Star Fish and Cambuslang facilities and the return to sustainable profitability of the group’s Gunstones Bakery as well as the restructure of Fox’s Uttoxeter facility progressing to plan, with cost reductions expected in 2019/20.
Kers said: “These results represent the first like-for-like EBITDA growth in two and a half years, providing confidence that the turnaround actions are taking hold.
“There are still substantial challenges the business faces, but these results do represent an important first step in demonstrating that we are stabilising the Group and making sure we follow through with the right set of actions to deliver growth.
“There are more encouraging signs in our Protein and Chilled areas, and crucially our UK Poultry operation will begin to benefit following fundamental changes to our operational planning capabilities.
“The news from our Gunstones Bakery business is also a positive sign of turnaround, and we are determined to ensure investments we have announced in UK Poultry and Fox’s Biscuits deliver the returns we expect.
Kers said further divisional restructurings will continue, as will a relentless focus on improving the group’s balance sheet position.