Investor relations

Public announcements



Continued progress in a tough operating environment
Investment programme continues

Boparan Holdings Limited, the parent company for 2 Sisters Food Group, a leading food manufacturer with strong positions in Protein, Chilled and Branded categories, today announces its consolidated results for the 13 weeks ended 31 October 2015.


Q1 2016

Q1 2015

Y-o-Y Change

Total sales




LFL sales¹




Operating Profit²




Operating profit margin %




LFL operating profit¹,²




LFL operating profit margin %




Profit after exceptional items, before interest and tax




Retained profit after exceptional items, interest & tax




Net debt




LTM Adjusted EBITDA³ (£m)




Net Debt: Adjusted EBITDA³

4.5 x

3.9 x


1. Like for like (LFL) sales and operating profit are based on the 13 weeks ended 31 October 2015 compared to the 13 weeks ended 2 November 2014, excluding the impact of exchange translation.

2. Operating profit is calculated pre-exceptional items and includes profit / (loss) on the Group’s share of joint ventures.

3. LTM Adjusted EBITDA excludes the one-off costs reported at 14-15 relating to Avian Influenza (AI) outbreaks and the costs associated with a problematic IT system implementation, which totalled £17.4m and the impact of exchange translation.

Q1 headlines & Q2 outlook

  • Continued focus on building a ‘better before bigger’ business, progress experienced in Q4 continues into Q1
  • Performance in line with guidance, in spite of continued price deflation and currency headwinds
  • Like-for-like sales down 2.3% to £787.9m; quarter-on-quarter progress from £773.6m (Q4)
  • Drive for greater operating efficiency and innovation across all areas of the business
  • Continued focus on prudent cost control and tight management of working capital
  • Deepening and strengthening relationships with major customers
  • On track for delivering further improvements in Q2

Investment programme

  • Substantial and targeted investments to drive productivity and efficiency across the business over the next three to four years:
    • Additional site in Derbyshire facilitates the acceleration of the Protein Footprint Programme
    • Focus on investment announced in Q4 of £150m in UK poultry business and £55m in Meal Solutions
    • Continued investment in reducing campylobacter

Ranjit Singh, 2 Sisters Food Group CEO, said:

“The progress we experienced in Q4 continues in the first quarter as we continue to meet our objective of building a better business. Our focus on costs, efficiency, investment, innovation and deepening customer relationships remain paramount. With the progress we saw in the fourth quarter continuing, we expect to see our hard work bearing fruit as the year progresses.

“We are committed to working in partnership with our customers to provide the food people want to eat at the right price. This has been reflected in the important successes we have achieved in category reviews and new product development, with notable successes for poultry products, red meat, pizzas, wraps and frozen fish. In our Branded business, we have shown our commitment to innovation with the roll out of Goodfella’s sweet and gluten free pizza in the UK, successful new brand extensions for Fox’s biscuits and a range of Disney branded products.

“The measures we introduced to reduce campylobacter in poultry, in conjunction with our customers, have been recognised not only by industry awards and through positive feedback from media and key commentators, but also by the Food Standards Agency which pointed to ‘significant’ progress in its recent quarterly review.

“The investment in the business we announced in the last financial year is well under way. In poultry, we are already working to implement the £150m investment programme which will revolutionise the supply chain. In Ready Meals, work has commenced at both Pennine and Rogerstone sites, with the latter due to complete in mid-2016, and we are now leasing an additional site in Derbyshire which will enable us to increase capacity and allows us to facilitate the Protein Footprint Programme quicker without increased cost.

“We have the right strategy, a relentless commitment to great food, innovation and efficiency, and are building great relationships with both our major suppliers and customers.”

Divisional performance


Like-for-like sales in our Protein division in Q1 were down 2% to £538.6m (Q1 2014/15: £549.7m). Operating profit was £8.6m (Q1 2014/15: £15.5m).

We have continued to cement our strong position with leading customers by offering them new products such as wings, which utilises more of the chicken, as well as securing major business wins in poultry and in red meat with new customers. The benefits of this new business will start to show in future quarters.

We continue to build our leadership in UK poultry and this has been further demonstrated by our award-winning £10m campylobacter reduction programme launched in November 2014.

The FSA noted in its latest campylobacter data report, published in November 2015, a reduction in the highest rates of campylobacter, and our own data analysis confirms these trends. With the further use of new factory interventions rolling out early in 2016, we are hopeful of an even greater reduction of campylobacter, reducing its presence below the industry target.

We are driving forward with our £150m investment in the poultry business which will revolutionise the supply chain and position us well for growth in the future.

Over the period, the protein division has won a number of awards including Ranjit Singh being named as Poultry Person of the Year by the British Poultry Council and the Agriculture Innovation Award for our work on responsible antibiotic use within the poultry agriculture supply chain. This follows on from the recent publication of the 2 Sisters Food Group Antibiotic Policy.


Our Chilled division experienced a Q1 like-for-like sales drop of 5.1% to £148.0m (Q1 2014/15: £155.9m) reflecting the impact of sandwich contracts not renewed last year and operating profit of £0.9m (Q1 2014/15: £2.3m). However the operational turnaround of the division remains on track.

Our £55m investment to support the growth of our Ready Meals business is well underway as building has commenced at both Rogerstone and Pennine sites. The Pennine build will progress in sections over the next two years, in order to avoid any disruptions for our customers, while the work at Rogerstone should be completed by the middle of this financial year.

We are focused on improving efficiency, product taste and driving innovation across the Chilled division. This strategy is starting to pay off evidenced by the three awards we won at the Quality Food Awards for our pizzas, and high praise from TV chef, Aldo Zilli.

Over the period, we have launched a new range for children under the Disney brand at the end of September, and have re-invigorated ranges, aiming to improve both taste and packaging. This financial year our Chilled division is planning to launch over 100 new products.


The Branded division continues to perform well with Q1 like-for-like sales up 0.2% to £101.3m (Q1 2014/15: £101.1m), with operating profit increasing by over 100% to £8.6m (Q1 2014/15: £4.2m).

Our investments in quality and marketing at Fox’s Biscuits have helped us deliver a strong performance in biscuits, despite a competitive environment, with sales up substantially over the quarter. We remain committed to new product developments as highlighted by the launch of two new products under the Fox’s brand including new chocolatey range and Fox’s Fingers this quarter.

In Frozen, sales in pizza are performing well as we continue to improve product quality and drive innovation. In the period, we won a new major frozen pizza contract which will start contributing to the business in Q2 of this financial year. The regional TV campaign from Holland’s Pies has assisted in driving store distribution, thus widening the brands’ appeal. We are also pleased to announce that we have won numerous awards for the ranges of Christmas puddings we provide for our customers.

Investment Programme Update

As outlined at our Q4 announcement, we continue to focus on building a better business, a key part of which includes a targeted investment programme.

Since the end of Q1 15/16, an opportunity to operate at an additional facility in Derbyshire became available to the Group. This extra capacity opportunity is a good strategic fit for the business and allows us to facilitate the Protein Footprint Programme quicker without increased cost.

Debt funding and cash flow

Our long term funding includes the senior notes, £250m 5.25% notes due 2019; £330m 5.50% notes 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 2018) which remains undrawn.

We continue to focus on cash and working capital management, and this resulted in a net cash inflow from operating activities for the quarter of £28.8m before interest, tax and capital expenditure (Q1 2014/15: £12.3m).

During the quarter, we made interest payments totalling £24.9m, including the half-yearly interest on the Bond. As a result, our Net debt:adjusted EBITDA ratio increased to 4.5 times (Q1 2014/15: 3.9 times) for the quarter and we have experienced a net debt increase of £9.7m to £726.3m, including cash balances of £110.5m (Q4 2014/15: Net Debt £716.6m; Cash £118.7m).


The transformation of our business is well under way as evidenced by our Branded business, our emerging performance in Chilled and continued progress in Protein as we continue to improve efficiency and quality in each division and drive profitable sales. Our strategy to invest across our divisions is starting to deliver improved performance and we remain confident in the outlook for our business as we move into Q2 2015/16.


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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.