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Q1 Results 2017/2018

6 December 2017

Growing top line performance; but further commodity inflation
and Site D disruption have impacted results

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 October 2017. 


Q1 2017-18

Q1 2016-17


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 tax




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




Net Debt




LTM Adjusted EBITDA3




Net Debt: LTM Adjusted EBITDA3

5.44 x

4.24 x

1.20 x

1. Like for like (LFL) sales and operating profit are based on the 13 weeks ended 28 October 2017 compared to the 13 weeks ended 29 October 2016, with the prior period adjusted to exclude the impact of exchange translation.

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

3. EBITDA is stated before depreciation, amortisation and pension scheme administration costs and includes (loss) / profit on the Group’s share of joint ventures.

Q1 headlines

  • Revenues continue to grow against tough market backdrop; total sales up 3.8% to £849.0m despite production suspension at a  poultry cutting site for part of the period
  • Like-for-like sales up 3.1% year-on-year
  • Operating profit at £8.4m
  • Margins affected by further commodity inflation and disruption at a poultry cutting site as previously reported

Ranjit Singh, 2 Sisters Food Group CEO, said:

“Despite the tough market environment, we have grown revenues during the first quarter and have worked hard to deliver for customers.

“As well as commodity inflation, our results have also been affected by the temporary suspension of operations at our poultry cutting plant (Site D). We are taking action now to improve margin performance and we should see the results of this coming through in the second half of the year, as we work through our plans to strengthen our business in all areas.”

Divisional performance 


Like-for-like sales in our Protein division in Q1 were up 3.7% at £578.8m (Q1 2016/17: £558.4m). However, like-for like operating profit was down by £4.9m to £1.2m (Q1 2016/17: £6.1m), driven primarily by the temporary suspension of operations at Site D.

This quarter, the UK poultry business has benefitted from strong volume growth underpinned by the substantial upgrade of our facility in Scunthorpe. Cost reduction exercises in our Red Meat business are now delivering and we have begun to recover some of the commodity inflation impacts seen in the previous quarters.

However, this has been more than offset by further inflation in other areas and the impact of the temporary Site D suspension.


Our Chilled division saw like-for-like sales fall to £151.7m (Q1 2016/17: £156.8m) and like-for-like operating profit fall to £1.8m (Q1 2016/17: £3.4m) due to the previously reported pizza contract losses versus Q1 last year.

The business worked closely with its customers to recover some of the commodity inflation impact of prior quarters and also gained market share on core product ranges such as sandwiches. In response to contracts lost in prior quarters, the division has significantly refined its cost base, which has helped improve overall results.

However, the division continues to be impacted by further commodity inflation; especially in core ingredients such as dairy, and is looking to recover this in future periods.


The Branded division reported a Q1 like-for-like sales increase of 9.6% to £118.5m (Q1 2016/17: £108.1m), but like-for-like operating profit reduced to £5.4m (Q1 2016/17: £10.6m), due to further commodity inflation pressures.

In Frozen, price recovery, cost reduction efforts and volume growth have not been sufficient to offset increases in dairy and fish prices.

Biscuits have benefited from key retailers introducing their Christmas ranges earlier than last year, along with some price recovery and innovation savings. However this has been offset by a further wave of commodity inflation and labour cost increases.

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 January 2019).

Our Net debt at the end of the quarter increased to £823.6m. Net Debt: adjusted EBITDA ratio is now 5.44 times (Q1 2016/17: 4.24 times).

Site D, West Bromwich

As confirmed in our Q4 announcement, following a comprehensive colleague retraining programme, the site recommenced supply to the majority of customers on 6th November. In addition, the FSA are now a permanent presence on site, and work on extending CCTV coverage and its continual monitoring is now well underway.


Despite progress with price recovery and efficiency programmes, higher commodity prices and continued disruption following the suspension of production at Site D are proving difficult to mitigate in the short term. However, we remain cautiously optimistic that our change programme, coupled with a degree of softening in commodity prices will improve our position as we head into the second half of the year.

We re-emphasise our position that our core businesses operate in attractive, growing markets and our broad reach means we can benefit from operational and commercial efficiencies. Our commitment to producing safe and quality food remains at the heart of the business, as does our determination to deliver a stronger overall position as the financial year progresses.


Please go to the Investor Relations section of the corporate website

A copy of this announcement will also be made available at

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.

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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