2 Sisters has posted flat sales in its chicken processing business in “the toughest commercial environment” in many years, according to CEO Ranjit Singh.
The company reported like-for-like (LFL) sales of £818.3m, an increase of 1.3%, for its second quarter. However, its protein arm suffered a decline of 2.8% in sales.
Singh said the avian influenza outbreak last year cost the company £6.2m in lost carcases and reduced sales.
Meanwhile, the Food Standards Agency’s campylobacter figures were creating “a negative sentiment”, which Singh said the company was dealing with.
He said in statement: “In our protein business, I take great pride in our continued industry-leading investment in the fight against campylobacter, but the market remains very tough.
“However, we continue to integrate the division, following the Vion acquisition, and we are taking action to deliver efficiency and output improvements across our sites.
2 Sisters’ chilled division looked more positive. Singh added: “A year ago, our chilled division’s profitability was impacted by the aftermath of horsegate. I am pleased to report that, a year on, we are making steady progress, with like-for-like sales up 2.9% and another quarter-on-quarter improvement in operating profit.
“Our branded products continue to operate in aggressive markets and continue to see pressures on sales mix and promotions. Branded achieved a modest operating profit in the quarter and like for like sales were similar to the same period last year. We continue to invest in quality and marketing at Fox’s biscuits.
“This is the toughest commercial environment I can recall for many years, with substantial changes at many of our larger customers. We expect conditions to remain difficult, but are firmly focused on delivering quality.”