Like-for-like sales for parent company Boparan Holdings rose 9.5% on 2011 figures to £2,259.6m, with total sales up 13.4%, to £2,339.2m. Profits were also up 350% to £42.5m and EBITDA also rose by 11.9%. However, the company said margins were expected to remain “flat” in the coming financial year as the company focuses on growing sales and cash margin, and recovering inflation.
Ranjit Singh, CEO of 2 Sisters Food Group, said the good sales performance came despite operating in a competitive sector and the challenging economic environment, but downplayed the outlook going forward. He said: “Whilst we have made a solid start to our new financial year, looking ahead, we remain cautious in a difficult economic environment. Trading conditions are very challenging, with high food commodity inflation, further recent significant increases in feed prices and cash-conscious consumers.
“Despite these pressures, we will continue to work with our customers to deliver quality and value to consumers, invest in our brands, in innovation and our people, and drive efficiency over the course of the year,” he said. “The company’s focus on putting the customer at the heart of everything we do has resulted in new business from both existing and new customers.”
Key drivers over the year were seen across the poultry and chilled divisions, with branded frozen also signalling a recovery. Poultry like-for-like sales were up 11.8%, with a “significant” new contract to Sainsbury’s contributing to the strong performance, and increasing diversificaion into the European retail sector. However EBITDA margins were flatter – a fact the company said was due to a focus on cash margins.
The company also remained cautious about the further increases in feed prices, which are expected to push inflation in poultry and other proteins. It said this would impact on short-term margins as recovering increased costs lags behind.
“The recent significant increases in feed prices will continue to put pressure on food inflation and we will aim to progressively recover these through selling price increases, volumes and efficiency,” it said. “We continue to work closely with our customers on recovery of these higher feed prices, as this is essential to secure the viability and supply of the poultry farming and processing capability in the UK.”
There was also strong volume growth in the chilled sector (including ready meals) with like-for-like sales up 10.5% and new ready meal acquisition Brookes Avana breaking even, after the company took “tough action to improve efficiency”.
Earlier this month, 2 Sisters announced the closure of its Leicester site, which it said had been performing below capacity, with operations being transferred to other existing sites.