Turnover for the company experienced a slight increase, rising from £1.4bn in the previous year to £1.42bn in 2022. However, the reported period also saw an increase in the cost of sales, which rose by 3.7% to £1.37bn from £1.32bn.
Profit continued to show growth year-on-year, with the company reporting a gross profit of £108.4m, an increase from £90.5bn, approaching the £112.2m reported in its full-year accounts ending on 1 August 2020.
Despite the positive performance in profits, rising costs continued to impact the poultry processor’s bottom line. Distribution costs increased by 3.7% to £103.6m from £99.9m, resulting in an operating loss of £29.5m.
It is worth noting that the operating loss for the period was lower than the amount reported in the previous year (£44.85m). The company would have recorded even lower losses if not for the loss incurred from the disposal of its two Bernard Matthews sites in Sunderland and Derby.
In its annual report, the poultry processor highlighted that inflation had significantly impacted the business’s performance during the first half of the period. The timing and speed of cost increases were particularly challenging. However, the company managed to improve performance in the second half of the period through a successful inflation recovery program and more stable operations.
Additionally, the poultry processor benefited from the disposal of a loss-making part of its poultry operation located in the Derby and Sunderland sites during the second half of the period.
Like many businesses in the UK, 2 Sisters faced challenges due to extreme weather conditions during the summer of 2022. The company’s agricultural operations were disrupted by the intense heat. The report acknowledges that the company now seeks to address additional issues brought by climate change, as periods of extreme weather, especially heat, can lead to significant disruptions in the agricultural supply base.
During the reported period, the number of staff working for the poultry processor decreased. There were 7,467 employees working in product-related roles, down from 8,716 in the previous year, and 720 employees in administration and selling, a slight decrease from 762 in 2021, resulting in a total of 8,187 employees.
Overall, despite the challenges posed by rising costs, inflation, and extreme weather conditions, 2 Sisters remains committed to addressing these issues and ensuring the stability and growth of its operations in the food packaging industry.
