Boparan FY earnings drop

Boparan FY earnings drop

An increased focus on proteins, the "transformational" acquisition of Vion's business in the UK and the fallout of the horsemeat scandal have dented full-year earnings at 2 Sisters parent Boparan Holdings.

The company said today (29 October) that operating profit fell 14.4% in the 12 months to 27 July to GBP92.2m (US$148.2m).

Operating margins were down 1.4% to 3.2% due to a higher proportion of sales coming from the lower margin protein business, the company said.

The group's chilled performance, which boasts higher margins than its protein unit, was hit by the consumer reaction to the horsemeat scandal, resulting in lower ready meal sales. The firm said its branded recovery continues to be driven by frozen and added that a new management team is now in place to drive growth of the Fox's biscuits brand.

Profits were also diluted by Boparan's acquisition of Vion's poultry and red meat business in the UK. However the company emphasised that the deal positions it for long-term growth through increased capacity.

During the year, Boparan said sales rose 23.3% to GBP2.88bn. Like-for-like sales rose 5.6%, the company added.

Show the press release

FY13 Operational highlights 

• Strong sales (LFL up 5.6%) in tough trading conditions, with results in line with expectations 

o Strong sales performance in Protein; building new business 

o Branded recovery continues driven by Frozen, new Biscuits team in place to drive Fox’s brand 

o Weaker performance in Chilled; headwinds of consumer reaction to horsemeat scare in beef based ready meals category, combined with inflation and sales mix 

o Progressing consolidation of processing sites to reduce cost base 

o Building our leadership team 

• Strong cash generation with net cash balances of £133.3m, Net Debt:EBITDA at 3.18x. 

• Transformational acquisition of Vion UK’s Poultry a

Original source: Boparan Holdings