Profits slump 179% for Boparan as it announces £33.5m loss
BOPARAN Holdings, the holding company for Birmingham-based 2 Sisters Food Group, has announced a £33.5m loss despite seeing a 23% increase in full year sales.
The performance reflects the group’s acquisition of Vion UK’s Poultry and Red Meat businesses but marks a transformation on last year’s performance, which saw the company announce a full year profit of £42.5m.
The 179% decline in performance is also said to be a response to a weaker performance from the group’s Chilled operation, which was badly affected by the horsemeat scare in beef-based ready meals earlier this year. The situation was compounded by inflation and sales mix.
Ranjit Singh, CEO of 2 Sisters Food Group, 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.
“We successfully completed the acquisition of Vion UK’s Poultry and Red Meat businesses and received unconditional clearance from the OFT on 18 June 2013.
“This is a strategic acquisition increasing capacity in poultry for future growth and serving more meal occasions. Whilst Vion poultry is currently loss making, we have started to implement our integration plan and aim to get the business to break even in 2014.
“We are consolidating our manufacturing facilities to improve efficiencies and improve profitability with three sites closed during the year. On 14 October 2013, we announced the closure of Haughley Park and will be transferring products to other sites.”
He said the group had strengthened its leadership with key appointments to its board, COO Chilled & Branded, Commercial & Marketing, Innovation and Agriculture to further build these areas of the business.
In outlook, he said: “We expect the economic environment to remain tough and we will work with our customers to deliver quality and value to consumers, invest in our brands, in innovation and our people, and improve efficiency.”
Group like for like sales increased by 5.6% for FY13, with group LFL sales in Q4 up 7.7%. Group sales including the Vion acquisition were up 23.3% to £2.88bn for FY13 (2012: £2.34bn).
It said despite the tough trading conditions, LFL Q4 operating profit was slightly ahead of last year although full year pre exceptional operating profit was 14.4% behind last year at £92.2m including the Vion acquisition which was loss making.
Full year operating margins are lower as the group has a greater weighting to the Protein sector which operates with lower percentage margins than Chilled and Branded.