Other pages in this section 

Investor relations

Financial news



Boparan Holdings Limited, the holding company for 2 Sisters Food Group, today announces its full year results for the 52 weeks ended 27 July 2013.

FY13 Financial highlights

 FY 2013FY 2012% change
Total sales £2,884.6m £2,339.2m 23.3%
LFL sales* £2,447.8m £2,316.9m 5.6%
Operating profit** £92.2m £107.7m -14.4%
Operating profit margin % 3.2% 4.6% -1.4%
LFL operating profit** £103.5m £107.7m -3.9%
LFL operating profit margin % 4.2% 4.6% -0.4%
(Loss) / profit for the year after exceptional items, interest and taxation £33.5m £42.5m -178.8%
Net cash flow from operating activities (statutory) £150.6m £253.8m -103.2m
Net debt*** £566.7m £533.8m £32.9m
Net Debt: EBITDA 3.18 2.80 0.38

** Operating profit is calculated pre exceptional items however includes profit / loss on the Group share of joint venture operations. LFL excludes discontinued operations, the acquisition of Vion’s UK Poultry and Red Meat businesses, which were completed on 8 March 2013 and the impact of exchange translation.
*** Net debt comprises bank loans, bonds and finance leases, after offsetting cash and cash equivalents of £133.3m (FY 2012: cash balances of £144.8m).

FY13 Operational highlights

  • Strong sales (LFL up 5.6%) in tough trading conditions, with results in line with expectations
  • Strong sales performance in Protein; building new business
    • Branded recovery continues driven by Frozen, new Biscuits team in place to drive Fox’s brand
    • Weaker performance in Chilled; headwinds of consumer reaction to horsemeat scare in beef based ready meals category, combined with inflation and sales mix
    • Progressing consolidation of processing sites to reduce cost base
    • Building our leadership team
  • Strong cash generation with net cash balances of £133.3m, Net Debt:EBITDA at 3.18x.
  • Transformational acquisition of Vion UK’s Poultry and Red Meat Businesses, unconditionally cleared by OFT on 18 June 2013

Ranjit Singh, CEO of 2 Sisters Food Group, said: “trading conditions have been very tough with inflation impacting cash squeezed consumers and the impact of the horsemeat scandal on the food sector. By working with our customers we delivered good sales growth although profitability was lower due to the impact of the headwinds in Chilled and dilution from the Vion acquisition.

We successfully completed the acquisition of Vion UK’s Poultry and Red Meat businesses and received unconditional clearance from the OFT on 18 June 2013. This is a strategic acquisition increasing capacity in poultry for future growth and serving more meal occasions. Whilst Vion poultry is currently loss making, we have started to implement our integration plan and aim to get the business to break even in 2014.

We are consolidating our manufacturing facilities to improve efficiencies and improve profitability with 3 sites closed during the year. On 14 October 2013, we announced the closure of Haughley Park and will be transferring products to other sites.

We have strengthened our leadership with key appointments to the board, COO Chilled & Branded, Commercial & Marketing, Innovation and Agriculture to further build these areas of the business.

We expect the economic environment to remain tough and we will work with our customers to deliver quality and value to consumers, invest in our brands, in innovation and our people, and improve efficiency.”

FY13 and Q4 2013 performance

Group like for like (LFL) sales increased by 5.6% for FY13, with Group LFL sales in Q4 up 7.7%. Group sales including the Vion acquisition were up 23.3% for FY13.

In tough trading conditions, LFL Q4 operating profit was slightly ahead of last year although full year pre exceptional operating profit was 14.4% behind last year at £92.2m including the Vion acquisition which was loss making. Full year operating % margins are lower as the group has a greater weighting to Protein sector which operates with lower % margin than Chilled and Branded.


The Protein division saw strong sales growth driven by inflation and business gains with LFL sales increase by 9.2% for the full year, and 18.2% for Q4. LFL operating profit was slightly ahead for the year despite the delay in recovering feed inflation and competitive conditions in the UK and Europe, as we invested in efficiency projects and in customer sales growth. We recruited an Agriculture Director to drive quality and agricultural strategy across our Protein business.

We expect the impact of price inflation to continue to impact volumes in the short term and are working with customers to offer value to consumers.

European Poultry continued to diversify into retail customers and reduce cost base with two factories closed during the year and production transferred into the other sites.

Sales from the Vion businesses for the 20 weeks in the year were £365.2m and are performing in line with our expectations as we started to implement our integration plans.


Chilled delivered an increase in LFL sales of 5.2% for the full year and LFL up 3.1% for Q4. In difficult trading conditions, operating profits for the full year and Q4 were lower than last year with the horsemeat issue impacting the beef related ready meals sector, under-recovery of commodity inflation, adverse sales mix and disruption from product transfers. We are taking actions to address these issues, but expect these factors to impact profitability in the first half.

We have refocused our Chilled business into Meal Solutions and Food to Go to address margin and operational improvement. We have a significant program of new product launches in the new year to support recovery of the chilled beef ready meals sector. We are taking actions on cost and we closed the Leicester factory in June 2013, transferring products to other sites. In addition, on 14 October 2013 we announced the closure of the Haughley Park site and will transfer products to other sites.


Branded LFL sales were 1.9% down for the full year and 8.6% down in Q4 as the legislation changes to promotions had an impact and we exited selected own label business in Biscuits. However, we delivered a steady profit improvement for the year with tight cost management and efficiency improvement as we continue our Frozen recovery plan.

We appointed a new Biscuits MD and management team in the year and our focus is on growing the Fox’s brand across all channels with a number of new product launches in Autumn 2013 supported by media campaigns.

Debt funding and cashflow

Our long term funding includes the senior £400m 9.875% and €340m 9.75% notes due April 2018 which provide the principal funding for the Group. In addition the Group has a £40m Revolving Credit Facility (to April 2016) which remains undrawn.

We continue to relentlessly focus on cash and deleveraging, resulting in net cash inflow from operating activities of £150.6m before interest, tax and capital expenditure. Our Net debt:EBITDA ratio increased to 3.18 times (from 2.80 times) after an adverse foreign exchange movement of £22m on the Euro element of the Bond, reversing gains in the prior year. The currency exposure of 75% of principal and interest was hedged to maturity in the second half of the year.

Our debt strategy remains unchanged to achieve Investment Grade metrics of 2x-2.5x by 2015. Net debt at 27 July 2013 was £566.7m, including cash balances of £133.3m, with the £40m RCF remaining undrawn.

Q1 trading and Outlook

We expect the economic environment to remain tough with commodity inflation and cash squeezed consumers and headwinds in Chilled.

Despite the tough environment, we believe we are taking the right actions to improve margin by addressing cost base through Vion integration and consolidation of processing sites, driving our brands and innovation and addressing inflation recovery and sales mix in Chilled.

By putting our customers at the heart of what we do in delivering quality, service and value to consumers and invest in our people. we will continue to make progress.


Please go to the Investor Relations section of the corporate website at www.2sfg.com for contact details.

About Boparan Holdings:

Boparan Holdings is the holding company for 2 Sisters Food Group based 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.

Next update: Our Q1 2013/14 announcement will be made on 17th December 2013.