2 Sisters sales sneak up after Northern Foods buy
The multimillion-pound acquisition of Northern Foods has paid dividends for Birmingham-based 2 Sisters Food Group, according to early indicators. In an accounts statement, the chilled food and poultry manufacturer said like-for-like sales in the first quarter of its 2012 financial year had soared 9.8 per cent.
Synergy expectations from the deal remain at between £15m - £25m at the end of the next financial year, 2 Sisters confirmed. It added that these benefits were already coming to the fore from the first quarter's results.
Like-for-like sales in its chilled products division were up 9.6 per cent for quarter one of 2012, while branded sales increased 3.7 per cent. However, the company reported "slower growth" in its biscuit ranges.
2 Sisters Group and its holding company Boparan Holdings is headed up by poultry tycoon and Harry Ramsden's owner Ranjit Boparan. The holding company purchased Leeds-based Northern Foods for £342m in April, after a long battle with Irish company Greencore.
The company described its first quarter results as a "solid start" with good sales growth.
A statement added: "Whilst we have made a solid start to our new financial year and our integration programme is progressing to plan, we retain our cautious outlook for 2012, reflecting the headwinds of a competitive market environment, continued high commodity and other input costs, and increasingly cash conscious consumers.
"Despite these challenges, we provide value for money with quality products in both own label and brands. We remain in a good position to grow our business over the years ahead."
The results were revealed in 2 Sisters Group's trading results for the year ending 30 July 2011.
Over the year, the company said pro-forma revenue hit £2.1bn, with full like-for-like sales having increased 4.1 per cent on an adjusted basis. Sales in its chilled division rose more than 10 per cent on a like-for-like basis.
However, the company said the performance from its frozen foods division "remained weak", prompting a re-launch of its Goodfella's pizza brand in September this year. The company said the re-branding, which focuses on the product's Italian heritage, had received "positive feedback" but added that the reinvigoration of the brand would take time in "what is a very competitive market".
The 2 Sisters group's board structure was altered towards the end of the year. Charles Allen takes up the role of independent chairman; Mark Hunter, chief executive of Molson Coors UK & Ireland, will be non-executive director.
Andrew Cripps has been appointed as non-executive director and audit committee chairman and Steve Henderson as group finance director.
Ranjit Singh, chief executive of Boparan Holdings, said: “In a challenging trading environment, we delivered a solid performance for our 2010/11 financial year, which was in line with our expectations. Following the acquisition of Northern Foods in April
2011, our integration programme is progressing to plan and our synergy expectations are unchanged from our previous guidance.
"Across our operating businesses, our divisional structure, effective from the current financial year, will enable us to have a sharper focus on our performance."
