2 Sisters sees solid sales growth
2 Sisters reported a “solid” performance in its first-quarter sales, with “good progress” made in recovering the significant increase in feed costs and other commodity prices. However, the company said it continued to be cautious on next year’s outlook.
Profit at holding company Boparan Holdings in the 13 weeks was down £5.1m on the same time last year, despite a rise in operating profit to £30.7m across the whole group, which was attributed to the exceptional costs closing the Leicester Brookes Avana site, which was announced in October.
In the 13 weeks to 27 October like-for-like sales were up 5% to £550.3m, spurred by good growth in chilled and poultry. Although the poultry division saw like-for-like sales increase by 6.2%, the operating profit was, as anticipated, lower, driven by the higher impact of rising feed prices. 2 Sisters said that while the short-term pressure on margins would continue, the market was expected to grow over the long term as a result of increased demand, due to the low relative cost of poultry. It said that it was working closely with customers to “progressively recover” commodity increases. Growth in chilled ready meals, sandwiches, salads and pizzas saw sales rise 6.3%, while branded like-for-like sales showed stirrings of a recovery, up 0.4%.
The company said that the markets remained “challenging and competitive” and the wider economic outlook “uncertain”, but that it would invest where there were opportunities for growth.
Ranjit Singh, CEO of 2 Sisters Food Group, said: “We have made a solid start to our new financial year, in challenging market conditions. Despite the tough consumer environment and lapping sales gains made last year, we grew sales during the first quarter as we worked hard to deliver food for every meal occasion.
“Trading conditions remain challenging, with high food commodity inflation, notably poultry feed costs and increased levels of promotion. Nevertheless, we have made good progress so far in recovering the impact of higher feed costs. By continuing to put the customer at the heart of everything we do, and being prepared to invest in growth, we remain well-placed to grow our business.”
Net debt was reduced by 16.2%.
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