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2 Sisters food group halts decline and cuts debt by £150 million

The parent of 2 Sisters Food Group has cut debt by £150 million as it continues its efforts to turnaround the business.

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The 2 Sisters chicken processing factory in Wolverhampton

Boparan Holdings, which has its headquarters in Birmingham and chicken processing factories in West Bromwich and Wolverhampton, said its 'root and branch' turnaround was on track with a new management team having halted the decline of the business.

For the 13 weeks to October 27 sales were down 16.6 per cent to £708.3 million, but on a like-for-like basis grew 0.2 per cent.

Profit after exceptional items and before interest and tax fell 75 per cent to £2.1 million.

The group has sold off Goodfellas pizza and its red meat business as part of the transformation.

It says it is on track to build sustainable improvements within the financial year with margin improvements expected from the third quarter. It is selling or closing loss-making sites.

Net debt is down year-on-year from £823.6m to £673.1m.

Chief executive of 2 Sisters Ronald Kers said: “We have made it clear that the size of the turnaround challenge is substantial, and to achieve success on this scale will take time. We have diagnosed the fundamental operational issues and the management team know what levers to pull to drive change through the organisation.

"Positive momentum is building and we are implementing improvements, both with ‘low hanging fruit’ and longer term strategic objectives.

"We are in stabilisation phase with our poultry business, and it is critical we make further operational efficiencies and improve margin as the financial year progresses to address ongoing input cost inflation. We will also make targeted investments that deliver real, tangible financial returns, for example in our Polish poultry and meals businesses."

Mr Kers said the group had successfully launched a number of products that will drive future growth, most notably Fox’s Milkshake Party Rings and several new ready meal lines.

"There is an enormous amount of work still to do and it will take time before we see green shoots of growth. However, we are focusing on our core with a new team, laying strong foundations for a more consistent performing and profitable business and have a plan of action which is realistic and can be executed," he added.

The group's chilled division saw a like-for-like sales increase of 4.5 per cent to £158.5m.

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