Better before bigger strategy begins to pay off for 2 Sisters
Boparan Holdings, parent company of 2 Sisters Food Group, has reported a modest growth in sales for the second quarter of the year as its ‘Better before bigger’ strategy begins to pay dividends.
For the 13 weeks to 30 January 2016, it has reported a 0.4% growth in like-for-like (LFL) sales from £797 million to £800.1m. Its operating profit has increased £26.4m to £22.1m year-on-year.
LFL operating profit is up £27m to £22.8m while LFL profit margin is up to 2.9%.
Ranjit Singh, 2 Sisters Food Group CEO, said: “In this quarter we are seeing signs of our strategy to build a better business starting to deliver. I am pleased to report that the progress we experienced in previous quarters continues, with improved performances in like-for-like sales and operating profit, despite the fragile grocery market.”
In its protein division, LFL sales for the period were flat at £530.7m, compared to £532.9m in the same quarter 12 months ago. The division’s operating profit was £7.1m, up from a loss of £7.7m in 2014/15. Positioning itself for long-term growth, 2 Sisters confirmed it was “driving forward with a £150m investment in the poultry business which will revolutionise the supply chain”.
The statement noted work 2 Sisters had done to create new products in its protein division. It said: “We have continued to cement our strong position with leading customers by offering them new products. For example, we are now producing barbecue products for our discounter customers for the first time, and will be making sweet chili kebabs utilising our new Derby facility. Other ‘firsts’ include new frozen whole bird lines for customers from our Scottish production facilities.”
The business also announced progress on reducing incidents of campylobacter and was “hopeful of an even greater reduction of campylobacter, reducing its presence below the industry target”.
Singh said: “The measures we introduced to reduce campylobacter in poultry continue, with innovative factory interventions in Scotland showing very promising early results, and encouraging independent data results for our extensive ‘no thinning’ trials. We have won industry awards for our work, and the Food Standards Agency’s last quarterly review three weeks ago also pointed to further significant progress.”
Its chilled division saw a 0.8% growth in LFL sales to £165.7m while operating profit rose to £3.7m, driven by record Christmas volumes.
The company’s strategic investment is reported to be on schedule, with works at the Carlisle and Rogerstone sites now completed. Its Pennine site building work will be done in phases over two years to avoid disruption.
Singh added: “We have the right strategy in place to deliver and help counter the headwinds that we face from factors we cannot control. A relentless commitment to great food, innovation and efficiency, and great relationships with our major suppliers and customers are helping us to succeed. Our focus on costs, efficiency, investment, innovation and deepening customer relationships will remain paramount.”
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