Losses mount as 2 Sisters axes sites
Losses have more than doubled at West Midlands-based 2 Sisters Food Group as it closes sites to cut back on costs following major expansion in recent years.
Parent company Boparan Holdings said losses had risen to £27.5 million for the last three months, up £15m on the losses for the same period a year ago.
But sales jumped 35% to £848m, boosted by the takeover of meat and chicken processing business Vion a year ago. Stripping out the impact of Vion, like-for-like sales were up a more modest 3.4%.
The 2 Sisters operation, which has chicken processing factories in Smethwick, West Bromwich and Wolverhampton, has seen net debt rise £47.8m to £572.3m, and is carrying out a major rationalisation and cost-cutting programme.
Two sites, at Haughley Park in Suffolk and Letham in Scotland, have been closed and it is looking at closing sites in Corby and Avana, near Newport in Wales.
Wolverhampton-born tycoon Ranjit Singh Boparan, the group's chief executive, said today: "This has been a very challenging quarter, but we delivered a creditable performance in Q2, despite the tough and competitive market conditions."
Investment in new products hit profitability in its chilled foods arm over Christmas, he said. "We are taking actions to address Chilled performance and investing in capacity to meet our customer growth plans."
Mr Boparan added: "We continue to invest in capacity to fuel our growth and to address our cost base, which means we have to make tough decisions and following the exit of two sites in Q1, regrettably on 7 February 2014 we announced consultation on the future of the sites at Corby and Avana."
