15 December 2014

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 Q1 consolidated results for the 13 weeks ended 1 November 2014.

Q1 15 Financial highlights


Q1 2015

Q1 2014


Total sales




LFL sales*




Operating profit**




Operating profit margin %




LFL operating profit*




LFL operating profit margin %




Operating profit after exceptional items***




Profit / (loss) for the quarter after exceptional items, interest and taxation




*Like for like (LFL) sales and operating profit are based on the 13 weeks ended 1 November 2014 compared to the prior 13 weeks ended 26 October 2013, excluding the impact of discontinued operations, the impact of exchange translation and include profit / loss on the Group share of joint ventures.

** Operating profit is calculated pre exceptional items and includes profit / loss on the Group share of joint ventures.

*** Operating profit after exceptional items includes profit / loss on the Group share of joint ventures. 

Q1 15 Operational highlights

  • Overall performance in line with guidance given at our year end announcement:
    • Tough trading environment continues – LFL sales are down 3.4% -  in line with expectations
    • LFL operating profit was £22m, compared to £28.9m last year
    • Retained profit after tax was £6.1m, compared to a loss of £12.1m last year
  • Solid performance in Protein; with pre-exceptional operating profit of £15.5m, up from £13.1m in Q1 2014.
  • In Chilled, LFL sales were broadly flat (down 0.3%) with an encouraging quarter-on-quarter improvement in operating profit.
  • Branded achieved a pre-exceptional operating profit of £4.2m and LFL sales increased by £15.6m when compared to Q4.
  • Working capital continues to be tightly managed and with net cash balances of £150.1m, Net Debt:EBITDA stands at 3.9x.

Ranjit Singh, CEO of 2 Sisters Food Group, said: “It has been a very challenging quarter for the food industry, with reduced volumes and price deflation, and this is reflected in our results. However, we have seen some solid individual performances within our divisions and encouraging signs of quarter-on-quarter improvements.

“We are building a better business by focusing on quality sales, and it is satisfying to report positive profit for the quarter with no exceptional charges.

“I’m proud that 2 Sisters continues to invest in the fight against campylobacter, which has been acknowledged as industry-leading by the FSA.

“Our business transformation continues, and we will remain focused on lowering our cost base, whilst investing in growth, such as our commitments to marketing spend with our Brands and improving the quality of our poultry products.

“The tough sales environment we experienced in Protein in Q4 has continued, but despite the challenges the business has delivered like-for-like growth in operating profit. We continue to integrate the division following the Vion acquisition and to fine-tune the efficiency and outputs across our sites to deliver the right quality products at the right time for our customers.

“Our Chilled business continues to stabilise – sales are broadly flat on a like-for-like basis, and we are seeing positive quarter-on-quarter improvements in performance with the division moving back into profit. Our Brands have seen further pressures on sales mix and promotions, but overall sales are broadly maintained (down 1.3% LFL against last year). In addition, we have invested strongly in marketing and product quality – particularly in Biscuits. As a consequence, this has reduced margins.

“Overall, we have performed consistently against the backdrop of a tough commercial environment. We expect conditions to remain tough, but we are firmly focused on delivering quality and value to our customers.”

Q1 15 performance

Group like for like (LFL) sales for the quarter decreased by 3.4%. Group total sales were down 8.9% for Q1 15, which includes contributions from Corby and Avana in Q1 2014.

Q1 operating profit was behind last year at £22.0m (2014: £26.5m). Q1 operating margins were 2.7% (2014: 3.0%).

Total Q1 operating profit after exceptional items increased to £22.0m (from £7.3m last year) reflecting an absence of exceptional charges in the current quarter, compared to £19.2m in Q1 2014.

The profit for the quarter after interest and taxation was £6.1m (2014: £(12.1)m).


The Protein division saw LFL sales decreasing by 4.7% for Q1. Operating profit was ahead for the quarter at £15.5m (2014: £13.1m).

Falling commodity prices reversed the impact of recent price inflation during Q1 of the new financial year, and we are working with our customers to offer further value to consumers.


LFL Chilled sales were broadly flat (down 0.3% - stripping out the discontinued Corby and Avana businesses).

Recent business wins and new launches are also helping to stabilise the division.

Operating profit, although behind the prior year, continues to show improvement from Q4 as the business recovers post restructuring. Operating profit was £2.3m for the quarter versus a breakeven position for Q4, resulting in an operating profit margin of 1.5%, the first time a positive operating margin has been achieved since Q1 2014. We will continue to build on this success by improving efficiency, accelerating innovation and building capacity at Meal Solutions and our specialist bakery sites.


Branded LFL sales were 1.3% down for Q1 in a highly competitive market and pre-exceptional operating profit fell by 46.8% to £4.2m (Q1 2014: £7.9m).

Operating profit has been adversely affected by planned investment in quality and marketing at Fox’s Biscuits and as a result of sales mix.

In Frozen, pizza sales continue to perform well and we continue to explore new channels such as exports and a wider distribution of Holland’s pies.

The high-profile Fox’s Biscuits marketing drive and TV advertising have re-invigorated the brand in an increasingly competitive market.

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 £14.1m before interest, tax and capital expenditure. Our Net debt:EBITDA ratio increased to 3.90 times (from 3.18 times a year ago) as a result of one off costs of the business change program and refinancing, although future interest costs were substantially reduced in the process. Net debt at 1 November 2014 was £681.2m, including cash balances of £150.1m (2August 2014: Net Debt £664.6m; Cash £168.3m).


The extremely tough trading conditions with our customers look set to continue and we are working hard to mitigate this.

Currently, our poultry division is being affected by the impact of Avian Influenza outbreaks in the UK and the Netherlands, as well as negative sentiment from consumers around the FSA Campylobacter reporting.

As a result of this, we expect Group profitability in Q2 to be negatively affected compared to the corresponding period last year.

Despite the prevailing conditions, we are seeing areas of improved performance across the Group, and we will continue to address our challenges to improve margin by addressing our cost base and improving the operational effectiveness of our manufacturing sites.

The transformation of our business continues as we improve efficiency and quality in each of our divisions and drive profitable sales.

By putting our customers at the heart of what we do and consistently delivering quality, service and value, we are strongly positioned for the future.


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About Boparan Holdings:

Boparan Holdings is the Parent company for 2 Sisters Food Group headquartered in Birmingham. We are a leading diversified food manufacturer with strong market positions in Protein, Chilled, Bakery and Frozen categories. We focus on delivering the highest quality products to our customers at the lowest cost.

Next update: Our Q2 2014/15 announcement will be made in March 2015, date to be confirmed