Ending production at both the Letham and Haughley Park poultry processing facilities cost 2 Sisters Food Group more than £20m, its latest set of financials reveal.
The “exceptional costs” contributed to the business, which is a subsidiary of Boparan Holdings, making a loss of nearly £15m in the year to 2 August 2014.
In December 2013 the company announced it would halt production at Letham, a site it acquired from Vion that year. Haughley Park, a facility that made cooked chicken products, was also wound down around the same time.
Redundancies at the two sites cost the business £8.6m, while “fixed asset impairment” – defined as the sudden drop in value of the “fair” value of an asset – was put at almost £11m.
Other costs associated with the restructuring came to £3.5m.
The exceptional costs, totalling £23m, were far higher than the previous year’s, which came to just £830,000.
Despite this, profit margin with exceptional cost stripped out was lower than last year, at £8m compared with £12m in 2013. However turnover increased to £992m, up from £855m in the previous period.
The accounts, which were filed to Companies House, also highlight a number of risks to the business’s profitability. Avian influenza is named the “key” threat, and the challenging retail environment is also noted.
“The company’s main customers are the UK’s leading supermarkets, and the strength of these customers, combined with competitive pressure in the industry, represent continuing risks which could result in lost sales to key competitors.”