Profit margins declined for poultry processor 2 Sisters Food Group in the 12 months to 30 July 2011, as feed cost rises took their toll.
According to financial results recently lodged at Companies House, operating profit was down by 30% to £22.2m compared with the previous 12 months, while turnover was actually up by 2.8% to £692m.
“As we enter the new financial year, the increase in feed ingredient prices remains a challenge to the business, as it is for many other food manufacturers,” said the report. “Nonetheless, the directors are of the opinion that the continued drive to reduce cost and run the company as if it were in recession has put the business in a firm position to capitalise on opportuntiies as and when they arise.”
Part of this cost reduction drive has been in staffing levels, with the average number of employees falling from 4,750 to 4,574 during the year. The bulk of these came in the sales and administration departments, with the number of production staff actually increasing slightly.
The company says it continues to invest in new product development, which the directors regard as “essential for continuing success”. 2 Sisters invested £30m at its Thetford, Norfolk food processing site during the period, acting as a “platform for growth” for the Prepared Foods Division.
The financial position of the company was also strengthened during the 2011 accounting period, with net assets rising from £47m to almost £69m.