2 SISTERS FOOD GROUP parent company Boparan Holdings has recorded a significant lift in annual profits in its latest financial results.
The group said its operational turnaround plan was behind the improved results. Pre-tax profits were £1.8m compared with a loss of £17.5m a year earlier in the 53 weeks to 1 August.
See also: Poultry feed prices continue to soar
The sale of businesses led to a gain of £28.8m, which is included in pre-tax profits.
Turnover was 1.8% lower, at £2.7bn, a consequence of the firm disposing of “non-core” assets as well as lost revenue because of the coronavirus pandemic.
Pre-exceptional operating profits were £39.9m, compared with £4.5m a year earlier.
The report said: “The group has successfully delivered its key turnaround initiatives due during the period.
“As a result, the performance of the business is improving, with increasing resilience leaving it well-placed for the challenges ahead, and to continue to improve in the future.”
Sales in the poultry division, by far the group’s largest, grew by 2.3% to £1.9bn.
However, this was predominantly because of an additional week in this financial year, the company said (53, compared with 52 in the year-earlier).
Operating profits before exceptional items improved considerably; from a loss of £7.4m to a profit of £16.9m.
“This is driven by the turnaround actions taken in the UK poultry business, which more than offset the decline in profits in the European operations primarily due to the covid-19 outbreak and the removal of sales to China, together with the effects of oversupply in certain European markets,” the results say.
They add that the company is facing “substantial headwinds” that include coronavirus, Brexit and feed inflation.
Commodity inflation is managed by pass-through agreements in place with major retailers to minimise exposure to raw materials inflation.
The coronavirus pandemic presents risks around labour supply and the potential for changing customer behaviour.
‘Resilient financial performance’
Ranjit Singh Boparan, president of Boparan Holdings Limited, said: “I am pleased with our resilient financial performances through what has been a challenging and eventful financial year.
“As an overall team, we have delivered a strong set of results in the face of a pandemic and I would like to thank all of our colleagues for their continued hard work and dedication.
“We look forward to refinancing the business, and the Board and I look to the future with excitement and confidence.”