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 ending 30 July 2011.

Financial highlights (Pro Forma 52 weeks to 30 July 2011)

  • Full year Pro Forma revenue of £2.1bn

  • Full year like for like (LFL) sales up 4.1% on an adjusted* basis (Price +2.4%; Volumes +1.7%); 1.4% on an unadjusted basis

  • Pro Forma Adjusted** EBITDA at £170m

  • Net debt*** £655m at 30 July 2011

NOTE: Pro forma results for the 52 weeks ended 30 July 2011 are unaudited and are derived as though all acquisitions were owned for the whole of the 52 weeks ended 30 July 2011.  A copy of the full audited statutory accounts for the period ending 30 July 2011 is contained in the enclosed Bondholder report.

*Like for like sales are based on Pro forma sales for the 52 weeks ended 30 July 2011 compared to sales for the prior year 52 weeks ended 30 July 2010 on an adjusted basis to exclude the impact of discontinued operations (the sale of Dalepak in August 2010 and the closure of Ethnic Cuisine in September 2010)
** Pro Forma Adjusted EBITDA is pre-restructuring costs and after adjusting for Uffculme feed mill and unrealised exchange loss on retranslation of the €340m senior notes.
*** Net debt comprises senior loan notes, cash and finance leases

Operational highlights

  • Integration of Northern Foods progressing to plan; synergy expectations for FY12 unchanged (£15m-£25m before integration costs)

  • Solid result for 2011 in a tough market environment, set against the impact of inflation on manufacturers, retailers and consumers

    • Chilled division delivered steady progress in sales and margins in the growing Ready Meals and Sandwiches & Salads markets; LFL sales up 10.7%

    • UK and European Poultry traded in line with expectations after dealing with feed cost inflation; LFL sales up 4.2% and margins slightly down reflecting phasing of input cost recovery

    • Branded division saw LFL sales decrease by 3.2% (Biscuits up 7.5%; Frozen down 11.6%) reflecting continued challenging trading in Frozen division offsetting Biscuits growth; Biscuits grew sales and market share and retained solid margins, benefiting from new product development, including Fox’s Ambers and new snacking products

    • Frozen sales and margin performance remained weak as we continue our work to sharpen performance in the division; Goodfella’s pizza brand relaunched in September 2011, focusing on Italian heritage

Other developments

  • One culture and one identity being rolled out into the business – “2 Sisters Food Group”

  • New Board structure with Charles Allen CBE as independent chairman; Mark Hunter (CEO MolsonCoors UK & Ireland) appointed non-executive director and Remuneration Committee Chairman; Andrew Cripps as non-executive director and Audit Committee Chairman and Steve Henderson appointed as Group Finance Director. David Gregory already in place as non-executive director and Safety & Governance Committee Chairman

Ranjit Singh, CEO of Boparan Holdings Limited, said: “In a challenging trading environment, we delivered a solid performance for our 2010/11 financial year, which was in line with our expectations. Following the acquisition of Northern Foods in April 2011, our integration programme is progressing to plan and our synergy expectations are unchanged from our previous guidance. Across our operating businesses, our divisional structure, effective from the current financial year, will enable us to have a sharper focus on our performance”. 


We continued to see progress in our predominantly own label Chilled division, where markets remain competitive but in steady growth, and our sales and margin momentum continued.  We continue to have strong product offerings in Ready Meals, Sandwiches & Salads and Chilled Pizza.  In our Christmas puddings business, we have a good order book for Christmas across own label and brand, including our new Fox’s branded Christmas pudding and an increased production run of last year’s successful Heston Blumenthal ‘Hidden Orange’ Christmas pudding.


In UK and European Poultry, we saw a phased recovery of the impact of higher feed costs, edging margins slightly down for the full year. Input costs remain high and pressures on margins still exist as promotional activity continues to drive volumes.  Our new Thetford prepared poultry facility became operational during the year and is now reported as part of Chilled.  In Europe, the small acquisition we announced in July has provided an opportunity to start growing sales to retailers in Europe over the coming years.


In Biscuits, with our leading Fox’s brand, sales growth progressed, with new own label business and innovative products including Fox’s Ambers and snacking to go products, a market where we see good growth potential.  Margins were flat versus the prior year as we saw increases in promotional activity.

Frozen trading continued to be tough with sales and margins remaining weak as we continue our work to sharpen our performance in the division. Our Goodfella’s pizza brand was relaunched in September 2011 to focus the product, packaging and marketing back to its Italian roots.  Initial feedback to our Goodfella’s relaunch has been positive, but we retain our view that the reinvigoration of the brand will take time in what is a very competitive market, with high promotional levels.  In Pies & Pastry, we recently secured additional own label volume to help fill spare capacity at our Portumna site in Ireland.

Customer relationships

We continue to have strong customer relationships, putting the customer at the heart of everything we do.  In a challenging economic environment, we have seen the benefits of a two-way relationship with our customers, supporting them in their growth plans and ensuring that we remain integral to their long term strategies.

Commodity inflation

We succeeded in recovering the impact of higher input costs during the year.  As an average across our basket of key commodities we saw around 6% inflation year on year. Input costs remain high and in line with our previous guidance, we do not expect to see any material easing of commodity inflation until the latter part of our current financial year.


On integration, we are making good progress with some quick wins; closing the previous Northern Foods headquarters in Leeds, moving to one Shared Service Centre in Wakefield; moving to one centralised Procurement team and focusing on a smaller number of suppliers; and developing a coordinated waste programme to minimise our waste and reduce costs. Our synergy expectations of £15m-£25m in FY 12 with associated costs of c£4-£5m are unchanged.

We have tightened our cash control across the Group, with a working capital improvement plan in progress. In line with previous guidance, we expect to keep capital expenditure at around 1.5% of sales this year.

We continue to bring our different cultures together as 2 Sisters Food Group, operating as one team where everyone counts and delivering the highest quality at the lowest cost.  We are also renaming our holding company 2 Sisters Food Group Holdings, which will take effect from January 2012. We are working to ensure we have fit for purpose structures and resource in place across the whole business, with some recent headcount reductions. We are also continuing our plans to ensure our pension schemes are affordable and sustainable in the long term, with the proposed closure of the Northern Foods defined benefit schemes to future accrual. The UK defined benefit scheme was closed to future accrual from 1st November 2011. We will commence the long term deficit reduction payments, agreed with the Trustee, of £15m per annum to the main Northern Foods UK scheme starting in 2011/12.

With our new Board structure now in place, we have the appropriate levels of governance and non-executive expertise to support our management teams.

Q1 trading

  • Q1 2012 Group like for like sales up 9.8%

  • Q1 2012 Chilled momentum continues, with LFL sales up 9.6%; Poultry LFL sales strong, up 12.9%; Branded LFL sales up 3.7%, reflecting a return to sales growth in Frozen and slower growth in Biscuits

  • Q1 2012 Group EBITDA margins will be slightly lower as we invest in growth with our customers; Full year margin expectations unchanged

The first quarter of our new financial year has seen a solid start with good sales growth as we work with our customers to deliver value to the consumer. In the short term this is expected to slightly dilute EBITDA margins, in what remains a tough trading environment, however, on a full year basis, our expectations of broadly flat margins – as previously communicated – remain unchanged.  The momentum in our Chilled division has continued, with our Thetford prepared poultry facility completing its commissioning.  Poultry performance remains solid and we are investing in growth with our customers. Branded reflects a return to sales growth in Frozen, whilst in Biscuits, lower market growth has led to a slightly slower sales momentum in the first quarter.

Q1 has also seen the first synergies coming through as part of our Integration programme.


Whilst we have made a solid start to our new financial year and our integration programme is progressing to plan, we retain our cautious outlook for 2012, reflecting the headwinds of a competitive market environment, continued high commodity and other input costs, and increasingly cash conscious consumers. Despite these challenges, we continue to put the customer at the heart of everything we do, providing value for money with quality products in both own label and brands. We remain in a good position to grow our business over the years ahead.


Please go to the Investor Relations section of the corporate website at for contact details.

A copy of this announcement will also be made available at under the Bond Investors sections

Next update: A first quarter trading update for the period ending 29 October will be made on Thursday 19 January 2012.

About Boparan Holdings:

Boparan Holdings is the holding company for 2 Sisters Food Group. We are a leading diversified food manufacturer with strong market positions in Poultry, Chilled, Bakery and Frozen categories. We focus on delivering the highest quality products to our customers at the lowest cost.