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Q3 Results 2017/18

25 June 2018

Q3 performance in line with expectations
Progress with delivery of strategic plan

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 28 April 2018.


Q3 2017-18

Q3 2016-17

Y-o-Y Change

Total sales




LFL sales¹




Operating Profit²




Operating profit margin %




LFL operating profit¹,²




LFL operating profit margin %¹,²




Profit after exceptional items, before interest and tax³




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




Net debt




LTM Adjusted EBITDA4




Net Debt: LTM Adjusted EBITDA4




¹ Like for like (LFL) sales and operating profit are based on the 13 weeks ended 28th April 2018 compared to the 13 weeks ended 29th April 2017, with prior year excluding the impact of exchange translation.

² Operating profit is calculated pre-exceptional items and includes the profit / loss on the Group’s share of joint ventures and defined benefit pension scheme administration costs.

³ Profit after exceptional items includes the profit on disposal for Green Isle pizza business.

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

Financial and strategic highlights

  • Continued revenue growth despite tough market conditions
  • Total sales up 1.8% to £836.7m; like-for-like sales up 1.3%
  • Successful disposal of Goodfella’s pizza business helps strengthen the balance sheet
  • Further strong cash generation, underpinned by the disposal, and ongoing focus on capital and working capital
  • Protein transformation making progress, with consultation exercises ongoing regarding the closure of three UK poultry sites, and the exiting of the Five Star Fish business


Ranjit Singh, President of Boparan Holdings Limited, said:

“During the third quarter we delivered performance in line with our expectations, as messaged in our Q2 call. We have also strengthened our balance sheet considerably with the disposal of the Goodfella’s pizza business.

“We are making good progress with our Change programme as we refocus on our core strengths.

“The appointment of Ronald Kers as CEO will help to further accelerate the work we have already started to change our business, introducing greater transparency, a stronger colleague voice, and simplifying a complex organisation.

“Under Ronald’s leadership I am confident we can take the business performance to the next level, with our focus on what has always been at the heart of our business - delivering great quality food at competitive prices for our customers.”


Management changes

Ronald Kers joined the business as Chief Executive on June 1st. Ronald is the former Global CEO of Muller, the €6bn international food company, and he brings with him more than two decades of experience at global FMCG companies including Nestle and Procter & Gamble.  He first joined Muller as UK CEO in 2012, leading the turnaround and transformation of the business, and was subsequently appointed Global CEO in 2015.

As we announced on 27 February 2018, Ranjit Boparan, co-founder, owner and CEO of Boparan Holdings Limited, has stepped up into the role of President. Ranjit will continue to oversee the strategic direction of the company, with a focus on reducing debt, supporting development of a world-class leadership team and continuing the drive towards the creation of a better, more transparent and simpler business.

As part of our Change programme, we have also made changes to the finance function, splitting responsibility for core financial work and M&A project activity into two separate roles.

As a result of these changes, Richard Pike, our Group CFO has decided to pursue interests outside the Group. We would like to thank him for his contribution in strengthening the balance sheet during his time here and we wish him well for the future.

Craig Tomkinson, currently Finance Director, UK & Ireland has been promoted to the role of Group CFO, effective July 1st, and Richard will work closely with Craig to ensure a smooth handover.

Craig rejoined 2 Sisters Food Group in April 2018, having spent six years with the business between 2010 and 2016, during which time he played a major role in the £346m acquisition of Northern Foods in 2011 and the £80m acquisition of the UK arm of Vion Foods in 2013. Prior to joining 2 Sisters, Craig held commercial finance roles with Whitbread and Tesco. Craig is a graduate of Said Business School and started his career as a Chartered Accountant with PriceWaterhouseCoopers (PwC).


Financial overview

This quarter reflects a markedly improved cash flow underpinned by the £200m sale proceeds received from the sale of the Goodfella’s Pizza business on 23rd April 2018. Against a backdrop of difficult trading conditions, we remain focused on the underlying cash generation and in particular, the tight management of capital expenditure and working capital.


Divisional performance


Like-for-like sales in our Protein division in Q3 were up 1.2% to £588.6m (Q3 2016/17: £581.8m). However, like-for-like operating profit was down by £12.5m; with an operating loss of (£5.8m) in the quarter (Q3 2016/17: £6.7m profit).

The year-on-year volume growth has been more than offset by the negative impact of beef, poultry and fish price inflation, resulting in the disappointing underlying performance in the quarter.



Our Chilled division saw like-for-like sales increase to £148.6m (Q3 2016/17: £148.1m) and operating profit rose by £3.1m to £2.8m (Q3 2016/17: loss of £0.3m) reflecting the year on year benefit of cost reduction efforts, volume increases and inflation recovery measures.



The Branded division like-for-like sales fell slightly to £99.5m (Q3 2016/17: £96.2m), and like-for-like operating profit reduced to £6.1m (Q3 2016/17: £7.5m). This was only marginally impacted by the Goodfella’s disposal in the period, however Q4 will obviously have no contribution from Pizza.

The division is impacted year on year by both underlying commodity inflation and foreign exchange translation, albeit we are now starting to see some positive tailwinds in certain commodities.


Debt funding and cash flow

Our long term funding includes the senior loan 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 July 2019).

Our Net debt at the end of the quarter was £622.6m; this represents an improvement of £172.1m compared to the previous quarter driven by cash generated from the sale of the pizza business. We intend to use £125m of these proceeds to repay half of our 2019 notes in the coming weeks.



We are taking clear actions to address the disappointing performance in our Protein business. The four announced site closures will reduce overheads by around £20m on an annualised basis and we are currently exploring opportunities to drive further efficiency improvement through the business.

Our Chilled business is performing well and we will continue to see improvement from our Branded business into the final quarter.

We remain confident that our refined strategy is enabling us to strengthen our balance sheet, stabilise our core operations and position us to move forwards positively into 2018/19.


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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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