The acquisition of Vion’s business in the UK, which remains loss-making, as well as the fall-out of the horsemeat saga have hit third-quarter earnings at 2 Sisters Food Group parent Boparan Holdings.
The company today (25 June) revealed operating profit before exceptional items dropped by more than one-half, declining to GBP15.5m (US$23.88m) from GBP31.4m. Like-for-like operating profit was down GBP11.1m to GBP20.3m in the three months to 27 April.
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Nevertheless, the group booked strong top line growth with total sales up 26.8% in the period to GBP764.8m. Like-for-like sales, excluding the contribution of acquisitions, rose 4.5%.
“Q3 saw good top line sales growth with a weaker trading performance, reflecting the tough trading environment compared to a strong Q3 last year,”Ranjit Singh, CEO of 2 Sisters Food Group, commented.
“As previously communicated, as well as the dilutive effect of the Vion acquisition, we saw headwinds following the consumer reaction to horsemeat in beef related ready meals, alongside continued cost inflation and margin pressure as we invested with our customers to maintain sales growth in a highly competitive market.”
Looking to the remainder of the year, the company said that it expects conditions to remain “tough” but insisted that it is taking appropriate action to position the company for long-term growth.
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By GlobalData
