Boparan Holdings delivers “positive performance”
Parent company of 2 Sisters Food Group, Boparan Holdings, has delivered a strong performance in its third quarter.
In its consolidated results for the 13 weeks ended 30 April 2016, revealed today (Tuesday 21 June 2016), the company reported an operating profit up 15.9% from £18.9 million to £21.9m. Like-for-like operating profit was up 13.2% from £18.9m to £21.4m, with the like-for-like profit margin up to 2.8%.
Meanwhile, total sales increased 0.6% from £779.7m to £784.5m.
“This is another positive performance, with the progress we experienced in previous quarters continuing and the group improved total sales and operating profit, despite the volatile grocery market, deflationary pressure and uncertainties around the EU referendum,” said Ranjit Singh, chief executive of 2 Sisters Food Group.
“As we continue to deepen customer relationships, we have delivered further successes throughout our business with new contract wins and new product launches. Our Protein business has seen existing contracts extended, as well as new launches for new customers in the UK and Europe. Our Chilled division has seen market share gains in the Indian ready meals category, and Food to go has increased ranging and received recognition for excellence with three honours at the British Sandwich Awards.”
Singh also recognised the strength of its Branded division with the growth of Fox’s Biscuits and Goodfellas pizza.
“Our investment programme continues at pace,” he continued. “We are investing to improve efficiency and delivery, fundamentally changing the supply chain, and our strategic investment project continues on time and on budget, with a £6m extension and equipment upgrade at one of our facilities in Nottinghamshire.
“A major upgrade of our Scunthorpe poultry facility has started, other capital works at Carlisle and Rogerstone are now complete, and our Pennine rebuild continues and we remain on track for completion in 2017.
“With some production now live at our Added Value site in Derby, this will enable us to accelerate our Protein Footprint Programme quicker without increasing cost.
“The strategy we set out last year is delivering. A commitment to great food, innovation and efficiency, and great customer relationships is helping us to succeed.”
Fall in protein
Despite a good overall performance, the group’s Protein division saw like-for-like sales for the quarter fall 2.6% at £533.3m, compared to £547.3m for the same period of 2014/2015. Operating profit was £8.9m, down from £9.4m of the third quarter of 2014/2015.
This decline in like-for-like sales has been attributed to continuing price deflation, combined with a temporary loss of sales in red meat.
Despite this, the group has been able to cement its position with customers by offering new products. Poultry performance with retailers is also strengthening, due to retail investment in price and new customers in primary and added-value poultry categories. This new business is expected to come through in the group’s new financial year.
Boparan’s new added-value site in Derby has launched BBQ kebabs and marinated half chicken with the refurbishment and upgrade of the rest of the site on track to be completed by the end of this summer.
In addition, the business has renewed contracts with a discounter customer and won frozen BBQ and Scottish fresh whole bird business.
As of this month, the Protein division is increasing its share of rotisserie poultry as well as moving to sole supply status with a leading UK retail chain. Furthermore, it has gained additional business in this category with another customer from July.
As part of its customer diversification in the red meat sector, the group has launched a total of 10 new frozen products with a national high street frozen retailer, while two of its brands – Posh Butcher and Welsh Butcher – experienced a successful launch into Europe, as well as the UK foodservice sector.
The Chilled division saw like-for-like sales increase by 2.3% to £148.7m (third quarter 2014/15: £145.3m) and operating profit up 44% to £2.6m (third quarter 2014/15: £1.8m), driven by improved market share and new product launches.
The Branded division also continued to perform well with third quarter like-for-like sales up 4.5% to £91m (third quarter 2014/15: £87.1m) and operating profit increasing by 35% to £10.4m (third quarter 2014/15: £7.7m).
In light of the volatile grocery market, increasing cost pressures and the uncertainty surrounding the EU referendum, the group’s Better Before Bigger strategy remains on course, with the business remaining “cautiously optimistic” that it will continue to deliver for the remainder of the financial year.
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