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Boparan Holdings Limited - pre-close trading update

Boparan Holdings Limited, the holding company for 2 Sisters Food Group and Northern Foods Limited, announces its first pre-close trading update prior to its financial year end on 30 July 2011.

Financial highlights

  • Full year (July 2011) revenue and adjusted EBITDA expected to be in line with proforma January 29, 2011 revenue and adjusted EBITDA of £2bn and £170m respectively (as reported in the OM)

  • Like for like sales* up 4.5% on an adjusted basis; 2.0% on an unadjusted basis

Operational highlights

  • Continued sales progress during the period:

    • Chilled division benefiting from strong market growth in both sandwiches & salads, and ready meals

    • New product development in Brands, including Fox's Ambers, Goodfella's Flatbread and Goodfella's Garlic Bread

    • UK poultry has now recovered inflation; new Thetford facility now open

    • European Poultry trading in line with expectations

  • Inflation recovery progressing in line with our plan

  • Integration of 2 Sisters Food Group and Northern Foods progressing to plan

Other developments

  • Successful Bond offering completed in April 2011 to repay acquisition debt following Northern Foods transaction, and to clear existing Northern Foods debt; new £40m Revolving Credit Facility established

  • Appointment of Charles Allen CBE as independent Chairman of the Group

Ranjit Singh, CEO of Boparan Holdings Limited, said:

"We have seen a solid financial and operating performance during the period, in what remains a challenging consumer environment and with continued commodity pressures which we are continuing to recover. Sales and profits for the full year are expected to be in line with the proforma we set out during our Bond offering in April.

"Across our operating businesses, our Chilled division continues to perform well. Market growth in chilled categories remains strong and we continue to excel for our customers in delivering high quality products and strong service levels. In Brands, promotional activity in the market is higher year on year, with volumes in Biscuits increasing and with new products being rolled out, including Fox's Ambers. In frozen pizza, we are seeking to redress the previous sales decline with new products including Goodfella's Flatbread and Goodfella's Garlic Bread. The UK poultry market has seen significant inflation, with reduced volumes as consumers focus on reducing waste. In UK and European poultry, we continue to trade in line with our expectations, with a focus on recovering the impact of higher feed costs."

"The integration work following our acquisition of Northern Foods is progressing to plan and we believe we have the right recipe to become fit for growth and further develop our business in the years ahead. We have received positive feedback from our customers and stakeholders, and we remain fully focused on delivering the highest quality for the lowest cost. To help drive the integration programme, we appointed an Integration Director in Steve Ellis, with nearly 20 years experience in lean world class manufacturing, sales, procurement and logistics. Progress to date has been good, with a number of initiatives, including the closure of the Leeds office and transferring activities to other locations in the group; the establishment of a new Leadership team to drive integration and deliver the targeted synergies in line with our plans; and we are planning to operate across five divisions from our next financial year, thereby ensuring that we have a sharper focus on our performance."

"Our appointment of Charles Allen CBE as non-executive Chairman also brings us a wealth of experience and wise counsel as we seek to grow the business over the coming years.  With Charles appointed, we will look to further develop the Board and a recruitment process for a permanent Group Finance Director is also underway."

Outlook

Like many predominantly UK focused businesses, we share the cautious economic outlook into our next financial year. However, we have quality products, strong brands and we will continue to progress our integration programme, both to deliver targeted synergies and to become fit for growth. 

* Like for like sales (underlying revenue) excludes the impact of discontinued operations. Adjusted like for like sales reflects the sale of Dalepak in August 2010 and the closure of Ethnic Cuisine in September 2010

Enquiries:

Please go to the Investor Relations section of the corporate website at www.2sfg.com for contact details.