But chief executive Ranjit Singh said there were ‘clear signs’ the company was pursuing the right strategy
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.
The rise in sales was driven by its protein division which increased by 4.8 per cent year on year.
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.”
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.