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'This was a tough trading quarter for the business' - 2 Sisters sales up but profit falls

But chief executive Ranjit Singh said there were ‘clear signs’ the company was pursuing the right strategy


Alex   Black

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Alex   Black
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2 Sisters sales up but profit falls

Currency fluctuations and avian flu on the continent have led to a fall in profits for meat processor 2 Sisters despite an increase in sales.

 

Like for like sales increased by 3.1 per cent year on year in the 13 weeks to April 29 2017.

 

But the company made a loss of £6.7 million after exceptional items, interest and tax compared to a £1.8m profit in 2016.


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Quarter 3 year on year changes

Like for like sales

  • Up by 3.1%

Retained profit after exceptional items, interest and tax

  • £6.7m loss

Operating profit

  • £13.7m down 36.6 per cent

Net debt

  • Up £83.7m at £794.7m

The rise in sales was driven by its protein division which increased by 4.8 per cent year on year.

 

Tough

 

Ranjit Singh, 2 Sisters chief executive, said it had been a tough quarter but there were ‘clear signs’ it was pursuing the right strategy for sales and ‘margin performance improvements’.

 

“The competitive landscape remains challenging and our sector faces currency fluctuations which have brought about higher input prices,” he said.

 

“In addition, our European poultry export business in both Poland and the Netherlands has been affected by avian influenza outbreaks on the continent, and we have experienced some restructuring costs elsewhere in the business.”

 

He highlighted expanding its cutting facilities in Scotland and ‘reconfiguring’ the supply chain to achieve a leaner structure. It has also announced the closure of one its Birmingham sites.

 

“Our chilled and branded businesses have been tackling commodity inflation head on, with recovery plans successfully agreed with our key customers, and they continue their focus on cost out and efficiency programmes.”

 

Future

 

Looking forward, he expected the external pressures would remain but it had begun to see the benefits of its actions against inflation in quarter four.

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