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Q2 Results 2018/2019

27 March 2019

BOPARAN HOLDINGS – Q2 2018/2019 RESULTS (13 weeks ended 26th January 2019)

Sustained reduction in net debt. On track to deliver margin gains in second half.



Q2 2018-19

Q2 2017-18

Y-o-Y Change

LFL sales¹




LFL operating loss¹,²




LFL operating loss margin %¹,²








Total sales




Operating Profit²




Operating profit margin %




Profit after exceptional items, before interest and tax




Retained profit / (loss) after exceptional items, interest & tax




Net Debt








Proforma Leverage4




¹ Like for like (LFL) sales and operating loss are based on the 13 weeks ended 26th January 2019 compared to the 13 weeks ended 27th January 2018, with prior year adjusted for the impact of exchange translation and both periods in question stated to include only those businesses that were owned throughout both periods. For example, both Q2 18/19 and Q2 17/18 exclude the results of the disposed businesses Goodfellas pizza, Red Meat and the Manton Wood sandwich business.

² Operating profit is calculated pre-exceptional items and is after charging of the defined benefit pension scheme administration costs. 

³ EBITDA is stated before depreciation, amortisation and pension scheme administration costs.

4 Proforma leverage is stated as Net debt divided by the LTM EBITDA for businesses owned throughout the period in question.


Key Q2 highlights

Management taking turnaround action

  • Strategic focus on core businesses, embedding a new way of working in UK Poultry Business
  • Returned Added Value Poultry Business to sustainable profitability.
  • Netherlands Poultry turnaround delivering improvements; Poland continues to grow.
  • Initiatives under way in Fox’s Biscuits to improve margins.
  • Two loss-making sites closed in line with plan

Recovery in progress and laying foundations for growth

  • Protein performance better year on year despite double digit inflation in feed costs
  • Disposal programme delivering  - successful sale of Sandwich business
  • Net debt down year-on-year by 27.7% to £570.0m

Turnaround on track but still a lot to do

  • Primal poultry impacted in the quarter by operational challenges over Christmas period
  • Onboarding new Ready Meals volumes, with cost and product mix pressures
  • Input cost inflation and tough market conditions in Biscuits


Ronald Kers, CEO, 2 Sisters Food Group, said:

“We remain on course with our business turnaround at our financial half-year point, and we have created the necessary impetus to start seeing results emerging in the following quarters. 

Our UK poultry business has stabilised and we have completed further diagnostic work which will help improve performance. We have already seen encouraging signs in Europe with margin improvement following expansion, and positive results in our Added Value Poultry division in the UK. We have also identified exciting opportunities to grow value in Fox’s Biscuits.

We are creating a highly-disciplined organisation with a leadership team embedding new business processes and ways of working, driving sustained cultural change. Further targeted investments and divisional restructurings will continue, and there will be selective spend on machinery upgrades and automation. 

Lasting change and consistent performance will take time, but our strategy is gaining traction, giving us confidence in the business turnaround plan.”


Q2 performance overview

Whilst our European and UK Added Value Poultry showed margin gains, our primal poultry business in the UK was affected by double digit feed inflation and operational challenges during the Christmas Period.

The growth in our Ready Meals business has been offset by higher distribution costs and product mix pressures, and Biscuits has seen margin pressures driven by branded/own label product mix and rising input cost inflation.

Externally, the overall environment remains challenging with inflation and Brexit-related economic uncertainty affecting margins.


Divisional performance


Like-for-like sales in Q2 were down 0.4% to £454.5m (Q2 2017/18: £456.4m), although underlying sales grew by 2.2% when accounting for the impact of the closure of our Fish Business. Like-for-like operating loss was £5.2m (Q2 2017/18: loss £9.9m).



Like-for-like sales increase of 5.6% to £153.5m (Q2 2017/18: £145.3m) and like-for-like operating profit fell by £2.1m to £2.5m (Q2 2017/18: £4.6m).


Like-for-like sales increased by 0.4% to £76.1m (Q2 2017/18: £75.8m). Like-for-like operating profit decreased by £5.4m to a loss of £0.2m (Q2 2017/18: profit £5.2m). 

Debt funding and cash flow

The Group’s debt capital structure consists of senior loan notes: £155m 5.25% notes due 2019; £330m 5.50% notes due 2021 and €300m 4.375% notes due 2021, with a £80m Revolving Credit Facility maturing in 2021. 

Our Net Debt at the end of the quarter was £570.0m which represents an improvement of 27.7% (Q2 2017/18 £788.7m), primarily driven by cash generated by disposal activities. The disposals proceeds have been used within the business for capital expenditure, pension contributions and the purchases of assets in line with our bond documentation.

The Group is committed to repaying the 2019 notes. The first tranche of £95m was repaid in December 2018, with a further £95m scheduled in April 2019 and the remaining £60m in May 2019.



The new business strategy now in place will improve the business in all aspects, but there is further work to do to ensure this strategy delivers the improvements we require. We will continue to reduce cost, simplify and restructure our businesses and make targeted investments where there are clear returns.

Our focus remains on strengthening our balance sheet and stabilising our core operations. This approach is showing pockets of success already, notably in European Poultry, and will become evident in the results in the second-half and beyond.



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About Boparan Holdings:

Boparan Holdings is the parent company for 2 Sisters Food Group with headquarters in Birmingham. We are a leading 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.

This announcement contains forward-looking statements in relation to Boparan Holdings Limited (the “Company”) and its subsidiaries. By its very nature, forward-looking information requires the Company to make assumptions that may not materialise or that may not be accurate. Forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update or revise any of them, whether as a result of new information, future events or otherwise, except as required by law.  

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