2 Sisters profits slashed as chief exec warns of ‘substantial turnaround challenge’

The parent company of 2 Sisters Food Group, Boparan Holdings, has said its new management team is “halting the decline of the business” and is “addressing inefficiencies” as its latest financial results show profit margins have narrowed from 1% to 0.1% and profits have fallen from £5.5 million to £0.9 million for the first quarter of 2018. 

Like for like sales in the 13 weeks to 27 October rose 0.2% to £708.3 million and net debt was reduced by 18.3% to £673.1 million.

The business said a ‘root and branch’ turnaround plan was being executed and the new management team, lead by former Muller executive Ronald Kers, was “driving through substantive, lasting change. Turnaround cannot be overnight and much still to deliver, but on track to build sustainable improvements within the financial year with margin improvements expected from third quarter.”

The poultry business was stabilising, despite significant inflation in feed costs, the report said.

“We have made it clear that the size of the turnaround challenge is substantial, and to achieve success on this scale will take time,” said chief executive Ronald Kers. “We have diagnosed the fundamental operational issues and the management team know what levers to pull to drive change through the organisation.

“Positive momentum is building and we are implementing improvements, both with ‘low hanging fruit’ and longer term strategic objectives.

“We are in stabilisation phase with our poultry business, and it is critical we make further operational efficiencies and improve margin as the financial year progresses to address ongoing input cost inflation.  We will also make targeted investments that deliver real, tangible financial returns, for example in our Polish poultry and Meals businesses.

“There is an enormous amount of work still to do and it will take time before we see green shoots of growth. However, we are focusing on our core with a new team, laying strong foundations for a more consistent performing and profitable business and have a plan of action which is realistic and can be executed.”

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