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Q4 Results 2019/2020

16 November 2020



Boparan Holdings Limited, the parent company for 2 Sisters Food Group, a leading food manufacturer, today announces its
consolidated results for the 14 and 53 weeks ended 1st August 2020.



Business turnaround strategy continues to deliver:
year-on-year like-for-like EBITDA growth; remaining resilient through Covid-19 impact


Q4 2019-20

Q4 2018-19

Y-o-Y Change

Q4 LFL sales¹




Q4 LFL profit before interest, tax, depreciation and amortisation (EBITDA)¹,²




Q4 LFL profit before interest, tax, depreciation and amortisation (EBITDA)  margin %¹,²




19/20 LFL LTM Sales¹








Q4 Reported sales




Q4 Profit before interest, tax, depreciation and amortisation (EBITDA) ²




19/20 LTM Reported Sales








1.      Like for like (LFL) sales and EBITDA are based on the 14 weeks ended 1st August 2020 compared to the 13 weeks ended 27th July 2019, adjusted for the impact of exchange
translation and results from the disposed Matthew Walker and Fox’s Biscuits Businesses. The increase is driven by the additional trading week in 2020, compared to 13 weeks in 2019.

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


Key Q4 highlights

·         Turnaround strategy delivers with +94.4% LFL EBITDA improvements in Q4, driven by UK Poultry and Meals performance

·         Q4 margins remain resilient and in growth despite Covid-19 impact

·         Full-year results indicate substantial improvements in core business and strong execution of strategic plan

·         +1.8% increase in full-year LFL sales (+1.9% increase after adjusting for the impact of COVID-19 and the 53rd week in the trading period)

·         Full-year LFL earnings growth of 68.8% with EBITDA improvements across all divisions of business


The Q4 and full-year performances underline the successful implementation of the operational turnaround plan and a continuation of the improvements achieved in the previous twelve months.

Despite experiencing a large negative COVID-19 impact in Q4, the Group is able to report stronger than expected EBITDA growth to £40.1m. And for the second consecutive quarter, the Group was able to generate underlying positive free cash flow, despite absorbing cash restructuring costs relating to a site closure.

LFL sales in the Poultry Segment grew by +2.3%; with UK sales in growth, the European business negatively impacted by COVID-19 and the positive impact of an additional week in the trading period. The division’s strong LFL EBITDA growth of £8.4m to £21.1m was due to continued improvements in UK Poultry including yield gains, commercial activity and cost efficiency programmes.

Strong LFL EBITDA growth in the Meals Segment of +317.6% to £11.1m, was driven by phasing of commercial gains and footprint reduction. The Bakery Segment saw a limited COVID-19 impact in the quarter, with LFL sales up +1.9%and a LFL EBITDA of £2.2m (-13.5%) after adjusting for the Fox’s Biscuits disposal. On October 31st 2020 (after the period end), a large part of the Fox’s business was sold to a Ferrero-related company for £246m.

The full-year performance demonstrates a solid execution of the strategic plan and shows its resilience in light of the global pandemic. Life-for-like sales show growth across the business divisions as management drives operational excellence against a backdrop of the continuing challenging environment. The Company is committed to its strategy of becoming an efficient and effective poultry-plus focused business.


Ronald Kers, CEO, Boparan Holdings Limited, said:


“Our Q4 results show a continued acceleration of our financial performance. Like-for-like profitability and overall margins are significantly better than last year, despite a negative impact from COVID-19 in the quarter. The full-year picture shows further evidence that the turnaround actions implemented over the past two years are translating into sustained financial results. We still see much upside in our business and we will continue our focus on margin growth, becoming a more efficient company while further improving cash generation. Besides the financial uplift, we are making significant progress in how we operate, which is being well recognised by customers, suppliers and other stakeholder groups. COVID-19 impacts will undoubtedly continue, but our foundations are now well-set for longer-term sustainable growth.”


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.”


Debt funding and cash flow

The Group generated £27.8m of cash in Q4 as the strong EBITDA performance and targeted capital expenditure, combined with a working capital inflow, resulted in the Group having a cash balance of £130.3m. Net debt of £580.4m, resulted in an improved LFL leverage of 4.6x (3.3x based on our pro forma run rate EBITDA of £134.8 million, adjusted to give effect to the disposed businesses, the implementation of our turnaround strategy and the impact of COVID-19) (Q4 FY2019: 7.7x).


COVID-19 Update

The number one priority remains the safety of our people and our products as we continue to contribute to play our part in feeding the nation. We have seen no significant operational impacts in managing absence, social distancing or materials shortages.

As previously announced in June and August 2020, to prevent any spread of the virus, the Company temporarily suspended operations at our factories in Llangefni in Anglesey and Coupar Angus in Scotland and worked collaboratively with local public health authorities. Both factories successfully resumed operations approximately two weeks after suspension.

In addition, as a part of the Company’s COVID-19 planning, specifically to mitigate the temporary adverse trading working capital impact, the Company agreed with HM Revenue & Customs on a payment plan for deferred pay-as-you-earn income tax (PAYE) of approximately £25 million of which approximately £14 million is outstanding and is due to be paid back this calendar year.

Whilst demand has been volatile in some parts of the business and the Group experienced a working capital outflow driven by the fall in demand in meals and in the European business (where revenues, operating profits and adjusted EBITDA margins have been negatively affected while stocks have increased, due to a decline in demand within the European customer base, which includes restaurants and other public spaces), in other areas the Group have experienced higher-than-usual demand for its products since the outbreak of COVID-19.

The Board is regularly apprised of the COVID-19 situation and continues to monitor developments closely.  A COVID-19 crisis management committee was set up at the beginning of the outbreak and crisis protocols have been activated across all functions. The Company has undertaken a strategic response focused on (i) providing our employees with the necessary support to work safely (including the implementation of significant health and safety and social distancing measures to protect our staff), (ii) feeding the nation by handling operational disruption, ensuring process continuity and mitigating procurement disruption, (iii) strengthening our reputation and pro-actively leading response planning and prioritizing strategic customers by meeting their needs in a fluctuating demand environment, (iv) supporting critical workers of the National Health System and in the care and food industry and (v) protecting our business and the potential impact on the Group’s adjusted EBITDA and cash flow.

In addition, we have provided to our colleagues training and best practice guides on issues ranging from transport arrangements, conduct in the community, to keeping COVID-safe in a shared household.

The Group has also implemented additional cost saving opportunities including: furloughing of staff, expenses reductions, tighter control of labour and material usage, and acceleration of the closure of the Pennine Meals factory.

Q1 Trading Update and Outlook

The Company’s performance to date in the first quarter of fiscal year 2021 (13 weeks top October 31, 2020) continues the annualisation of sales and cost savings improvements achieved in the previous 12 months through the operational turnaround.

However, during this first quarter, the Company has been experiencing a larger impact relating to COVID-19. The results have been adversely impacted by a combination of the temporary closure of the Coupar Angus factory during August; weaker sales during the period driven by the Government’s “Eat Out To Help Out” initiative, and continued lower sales prices into the food service and whole sale poultry sectors in Europe. 

The Group expects this could result in some volatility in cash flows and earnings over the first two quarters of the fiscal year 2021, but anticipates a like-for-like EBITDA year-on-year growth of 20-30% for the first quarter.

The Group considers these financial impacts to be temporary, and with the turnaround for the year firmly on track, the underlying core business of the Group will grow stronger and will continue to be resilient to these temporary challenges.


The above information is preliminary, is based solely on preliminary results and is not intended to be a comprehensive statement of the Group’s financial or operational results for the 13 weeks ending 13 October 2020, which may vary from the information provided above, and such variations could be material.

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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 Poultry, Meals and Bakery 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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