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Boparan Holdings, the parent of 2 Sisters Food Group, has seen its like-for-like operating profit fall 18% to £18m for the second quarter of the year despite a 2.6% rise in sales to £812.8m in the same period. Operating margins fell from 2.8% to 2.2% in the period, due to what the company is calling a ‘tough market’.
However, the business says it is confident around dealing with the strong headwinds in the coming year, highlighting Brexit uncertainty, as well as cost pressures and the tough grocery market as of particular concern. It did say that it is well placed to deliver for customers on quality, service and price.
Ranjit Singh, 2 Sisters CEO, said: “Our results reflect the very tough trading environment.”
He added that the market is as competitive as ever and currency fluctuations have brought about higher input prices. He said this put a squeeze on margins.
Protein division
The protein division saw second quarter sales rise 1.4% at £531m, however operating profit fell 37% to £4.5m in the same period.
The chilled division drove performance where operating profits rose 39% to £5.7m, while sales in the chilled division rose 5.9% to £175.5m. The company said that the improved performance was as a result of cost cutting “in the face of significant inflation across all commodity groups”.
Branded sales were up 3.5% to £106.3m and overall operating profit was down marginally to £9.2m, mainly driven by ingredient inflation.
The group said Goodfella’s Pizza market share remained solid. Net Debt to earnings was 4.35 times at the end of the quarter.
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