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Boparan Holdings Limited, the Parent company for 2 Sisters Food Group, a leading diversified Food manufacturer with strong positions in Protein, Chilled and Branded categories, today announces its full year consolidated results for the 53 weeks ended 2 August 2014. 

FY 2014 Financial highlights

 FY 2014FY 2013Change
Total sales £3,419.2m £2,884.6m +18.5%
LFL sales* £2,868.7m £2,801.4.m +2.4%
Operating profit** £89.5m £92.2m (2.9)%
EBITDA** £180.3m £178.0m +1.3%
Operating profit margin % 2.6% 3.2% (0.6)%
LFL operating profit** £97.3m £91.9m +5.9%
LFL operating profit margin % 3.4% 3.3% +0.1%
(Loss)/profit for the year after exceptional items, interest and taxation £(143.3)m £(33.5)m £(109.8)m
Net cashflow from operating activities £79.2m £150.6m £(71.4)m
Net debt*** £664.6m £566.7m £97.9m
Net Debt: EBITDA 3.69 3.18 (0.51)

 *Like for like (LFL) sales and operating profit are based on the 53 weeks ended 2 August 2014 compared to the prior 52 weeks ended 27 July 2013. excluding the impact of the 53rd week, discontinued operations, the acquisition of Vion’s UK Poultry and Red Meat businesses, which were completed on 8 March 2013 and the impact of exchange translation. 

** Operating profit and EBITDA are calculated pre exceptional items and include profit / loss on the Group share of joint venture operations.. 

*** Net debt comprises bank loans, bonds and finance leases, after offsetting cash and cash equivalents of £168.3m (FY 2013: £134.3m). 

FY 2014 Operational highlights

  • Total sales have increased to £3,419.2m (up 18.5%) LFL (*) sales are up 2.4% in tough trading conditions, with results in line with expectations
  • LFL (*) operating profit increased by £5.4m to £97.3m (up 5.9%)
    • Strong sales performance in Protein; pre-exceptional operating profit including share of JV (£0.6m) £69.1m
    • Vion integration on track – a number of sites have been consolidated and continue to be reviewed with a new embedded leadership team
    • Branded continues its turnaround, reporting a pre-exceptional operating profit of £25.8m
    • In Chilled, sales were down 8.0% reflecting the difficult trading environment and the business exits and a pre-exceptional operating loss of £5.4m was recorded
  • One-off exceptional items (including factory sales, closures and refinancing costs) have negatively impacted profit for the full year
  • Working capital continues to be tightly managed and with net cash balances of £168.3m, Net Debt:EBITDA stands at 3.69x, after absorbing financing costs
  • Group EBITDA** is in line with guidance given during the refinance at £180.3m (2013: £178.0m)

Ranjit Singh, CEO of 2 Sisters Food Group, said: “Our LFL (*) sales and operating profit performance are satisfying after a transformational year for our business.

We have made a series of tough decisions and taken action throughout the year to ensure we build a strong foundation for our business which will set us up for success in the longer term.

Investing in growth and lowering our cost base were the key themes of our operating focus over the past 12 months.

In Protein, we completed the investment and consolidation of cooked meats at Cambuslang following the closure of Haughley Park in H1, although we still have efficiency improvements to make. We progressed our cost reduction plan in Scotland, consolidated production at Coupar Angus and exited the Letham poultry site. Our Chilled business announced exit from loss making salads and cakes businesses and we invested in capacity for growth in Meal Solutions and our specialist bakery.

Clearly the costs incurred in this exceptional activity have impacted our overall result, but our LFL (*) operating profit performance has improved by a commendable 5.9%.”

“We expect the economic environment to remain tough and we will work to deliver quality and value to consumers. We are committed to investing in our Brands, innovation and our people as we take the Group to the next stage of its development.”

FY14 and Q4 2014 performance

Group like for like (LFL) (*) sales for the year increased by 2.4% although in a tough environment, were down by 3.3% in Q4 on a comparable basis. Group sales including the Vion acquisition were up 18.5% for FY14.

LFL (*) Q4 operating profit was ahead of last year at £28.6m (2013: £19.3m) resulting in full year LFL(*) operating profit increasing by 5.9% to £97.3m. Total full year pre exceptional operating profit was slightly behind last year at £89.5m (2013: £92.2m) including a full year impact of the acquired Vion business which was loss making at the time of acquisition in March 2013.

In total, full year operating margins (%) were lower in FY14 at 2.6% (2013: 3.2%) as the group increased its weighting to the Protein sector (following the acquisition of Vion), which traditionally operates with lower operating margins (%) than Chilled and Branded. Both Protein and Branded increased their operating margin %’s, whilst Chilled delivered a negative operating margin in the year.

The loss for the year after interest and taxation of £143.3m (2013: £33.5m) was adversely affected by restructuring costs and other exceptional items amounting to £101.1m (2013: £25.5m) and financial charges of £62.4m in relation to refinancing the Group’s debt capital.  


The Protein division saw strong sales growth driven both by the acquisition, business gains and inflation with sales increasing by 35.4% for the full year, and up 4.6% for Q4. Operating profit was ahead for the year at £69.1m (2013: £35.4m). Due to falling commodity prices, the impact of recent price inflation has reversed during Q1 of the new financial year, and we are working with our customers to offer further value to consumers.
European Poultry continued to diversify into retail customers and our restructured Red Meat business will realise new commercial opportunities in the new financial year.


Chilled sales decreased by 8.0% for the full year and were down by 15.6% in Q4. At the half year we announced withdrawal from the loss making salads and cakes businesses. This clearly had a negative impact on our full year performance. Recent business wins and new launches have reversed this trend in the first quarter of the new financial year. Building on this success, we will continue to improve efficiency, invest in our innovation capability and in capacity at Meal Solutions and our specialist bakery sites to provide a platform for future growth with customers.


Branded sales were 3.0% down for the full year and down 1.3% in Q4 as we focussed on margin improvement. Encouragingly, pre-exceptional operating profit grew by 40.2% to £25.8m. In Frozen, we grew pizza sales and continue to explore new channels such as exports and a wider distribution of Holland’s pies. High-profile Fox’s Biscuits marketing drive and TV advertising in the new financial year will help reinvigorate the brand as new markets, packaging and product opportunities will be realised in the new financial year.

Debt funding and cashflow

Our long term funding includes the senior £250m 5.25% due 2019; £330m 5.50% due 2021 and €300m 4.375% notes due 2021 which provide the principal funding for the Group. In addition the Group has a £60m Revolving Credit Facility (to 2021) which remains undrawn. We continue to focus on cash and working capital management, and this resulted in a net cash inflow from operating activities of £79.2m before interest, tax and capital expenditure. Our Net debt:EBITDA ratio increased to 3.69 times (from 3.18 times) as a result of the refinancing, although future interest costs were substantially reduced in the process, Net debt at 2 August 2014 was £664.6m, including cash balances of £168.3m.

Board Changes

On June 16, 2014 we announced the appointment of our new Company CFO, Stephen Leadbeater. Mark Hunter, Non Executive Director resigned from the board on September 25, 2014 following his appointment as CEO & President of Molson Coors. In addition Andrew Cripps, Non Executive Director and Audit Committee Chair has taken on the role of Senior Independent Non Executive Director.


We expect the economic environment to remain tough with an equally tough trading environment with our customers. As a result we expect profitability in the next quarter to not be as strong as the comparative period last year. Despite the challenging conditions, we believe we are taking the right actions to improve margin by addressing our cost base, improving the operational effectiveness of our manufacturing sites, whilst making targeted prudent investments throughout the business. We will continue to transform our business by improving efficiency in Protein, driving our Brands performance and stabilising and turning around our Chilled business. By putting our customers at the heart of what we do and consistently delivering quality, service and value, we are well positioned for the future.


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About Boparan Holdings:

Boparan Holdings is the holding company for 2 Sisters Food Group. We are a leading diversified food manufacturer with strong market positions in Poultry, Chilled, Bakery and Frozen categories. We focus on serving every meal occasion and putting our customers at the heart of everything we do.

Next update: Our Q1 2014/15 announcement will be made on 18th December 2014.