It has also announced its has resumed operations at its West Midlands site following an undercover investigation by ITV and the Guardian
Inflation and the exchange rate have hit profit margins at 2 Sisters parent company, Boparan Holdings, as it announces it has restarted supply to customers at its West Midlands site.
Operations were suspended from October 1 while the company retrained staff following an undercover investigation by the Guardian and ITV, which revealed a series of potential food safety breaches.
While like for like sales increased by 3.5 per cent to £802.2m, operating profit margins fell by from 3.8 per cent to 1.8 per cent and it made a retained loss after exceptional items, interest and tax of £28.6m.
Boparan Holdings said profitability had been affected by ‘higher than anticipated’ commodity inflation which had not been fully offset by price increases and cost reduction, as well as several exceptional items.
Poultry sales volume continued to grow, but this was offset by lower volumes and realised prices in red meat ‘due to a change in mix between retail and non-retail’.
It has also stabilised its European business following the problem of avian influenza earlier in the year although there was an ‘ongoing impact from continuing export restrictions’.
Ranjit Singh, 2 Sisters Food Group chief executive, said the business continued to face an ‘extremely tough trading environment’ with input costs increasing.
“Clearly margin performance improvement is a top priority, and this will be underpinned by working hard on the action plans that make the most difference to our core business,” he said.
“Nevertheless, we remain positive about our top line growth and how that positions us with our customers.”
Going forward, Mr Singh said inflation would continue to impact into the next quarter which will also be impacted by the suspension of trading at the West Bromwich site.