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Poultry giant 2 Sisters Food Group has posted a double-digit improvement in fourth quarter organic profits as margins in its core protein business improved.

Like for like EBITDA for the 13 weeks to 27 July jumped by 29.6% to £25.4m on like for like sales that nudged up 0.2% to £655.4m.

On a reported basis sales were down 18.4% due to a number of divestments in recent times. Reported EBITDA was down 9.8% due to the lower revenues.

Revenue growth was seen across 2 Sisters’ protein, chilled and branded divisions and like for like sales would have growth 2.6% without the impact of the closure of Five Star Fish.

Underlying like for like sales in its core protein business increased by 1.9% with EBITDA up by £3.6m in the period. The improved performance was driven by UK Poultry turnaround initiatives, including positive price impacts, and cost reduction as well as the benefit from the Five Star Fish closure

Chilled saw organic growth of 5.7% partly largely due to new business and branded like for like sales were up 3.6% as the performance of its Fox’s Biscuits brand – rumoured to be up for sale – improved.

2 Sisters said it continues to focus on “realising value from non-core assets” as it refocuses back onto its core operations, with its Matthew Walker business sold for £67m last month.

Ronald Kers, CEO, 2 Sisters Food Group, said: “These positive results show further growth in like-for-like earnings for the group. This is more evidence that our plans are coming to fruition and are driving improved performance.

“Our UK Poultry operation is seeing further evidence of turnaround and all divisions have seen EBITDA benefits as a result of commercial initiatives, and efficiency improvements. Our unrelenting focus on cost reduction, control and cash generation has yielded positive results in the quarter, which gives the Group a strong platform heading into next financial year.

“However, the environment is volatile both in the markets in which we operate and the economy at large. Brexit continues to present substantial uncertainty for all food processors but we are taking steps to ensure our business is fit for the future.

“Since our last update we have announced the sale of our Matthew Walker business for £67m, which represents another major milestone in the delivery of our strategy. Having now repaid the remaining 2019 maturing debt, our priorities remain improving core business performance, strengthening the balance sheet, and focusing on cash generation.”

2 Sisters’ £155m worth of 5.25% bonds due 2019 have now been repaid in full. Net Debt at the year-end was £631.4m which represents a 4.2% increase year-on-year.

Net debt is expected to fall by the end of quarter one and its results are expected to show a continuation in year-on-year like for like growth rate of EBITDA.

Morning update

Unilever (ULVR) chairman Marijn Dekkers has announced his resignation from the board of the consumer giant, with current non-exec director Nils Andersen stepping up to replace him.

Dekkers, who was appointed as chairman of Unilever in April 2016, has chosen to stand down as Chairman so that he can focus on his growing responsibilities as founder and chairman of Novalis LifeSciences, the investment and advisory firm.

He will continue to serve as a Non-Executive Director of Unilever.

Dekkers said: “It has been a huge honour to serve as chairman of Unilever and I am very proud of the work we continue to do as a truly purpose-driven company. My decision to step down has been a difficult one to make but I look forward to seeing Unilever go from strength to strength under Nils as chairman.”

Andersen has served on the Unilever board since April 2015 and is currently a member of the board’s audit committee. He was previously group CEO of A.P. Moller - Maersk from 2007 to 2016 and CEO of Carlsberg from 2001 to 2007.

He is currently chairman of AkzoNobel and is a non-executive Director at BP and chairs privately-held Salling Group. He intends to step down from his roles at BP and Salling Group in March 2020, prior to the Unilever AGM.

Andersen said: “On behalf of the board, I would like to thank Marijn for his strong leadership and the contribution he has made as chairman. I am very proud to have been asked to succeed Marijn and I look forward to working with the board and the Unilever leadership team to support the company’s continued growth.”

Elsewhere, European Coke bottler Coca-Cola HBC (CCH) has posted a “solid” third quarter despite poor weather across Europe hitting performance.

The FTSE 100 firm reported FX-neutral revenue growth of 3.4% in the three months to the end of September, or 2.3% excluding the impact of its Bambi acquisition.

Volumes increased by 1.1% in the quarter, -0.1% excluding Bambi. Transactions grew faster than volume and the group’s brands gained or maintained share in the majority of markets, while poor weather caused industry volumes to fall in several key countries.

FX-neutral revenue per case accelerated by 2.3% with price increases and positive pack and category mix, while innovation supporting market share gains and contributing 3.7 percentage points of growth in the quarter.

Established markets volumes increased by 1.2%, an acceleration on the first half and prior-year period.

However, developing markets volumes declined by 4.0%, cycling very strong volume growth of 11.3% in the prior-year period and was particularly impacted by poor weather across all major countries in August.

Emerging markets volumes increased by 3.0%, or by 0.8% excluding Bambi, due to ongoing volume growth in Romania, Ukraine and Nigeria.

CCH expects to deliver full year FX-neutral revenue growth of 4-4.5%, including a 70bps contribution from Bambi.

Currency movements during the quarter were better than expected, with expectations now of a negative impact of €15m which represents a €5m improvement on prior guidance.

CEO Zoran Bogdanovic commented: “In a quarter in which unseasonably cold and wet weather significantly depressed industry volume growth in a number of our countries, we are pleased to have gained or maintained share in the majority of our markets and to have made progress with our commercial strategy which delivered a step-up in price/mix and ongoing growth in key areas of strategic focus such as Trademark Coke, Adults, Zeros and innovation.”

“As we look to the full year, we are pleased to have seen an acceleration in Q4, giving us confidence that 2019 will be a year of solid top-line growth and good margin expansion.”

Coca-Cola Hellenic shares rose 3.6% to 2,446p in early trading.

The FTSE 100 is down 0.3% to 7,342.5pts so far this morning.

Early risers include C&C Group (CCR), up 2% to 390p and Greggs (GRG), up 1.3% to 2,134p.

Fallers include Bakkavor, down 1.5% to 122p, Marks & Spencer (MKS), down 1.4% to 182.2p and Imperial Brands (IMB), down 1.2% to 1,770p.

Yesterday in the City

The FTSE 100 ended the day back up 0.5% to 7,365.4pts yesterday.

Premier Foods (PFD) shares jumped to a four month high yesterday, rising 9% to 36.4p after reporting “strong” first half growth “ahead of the market” as it returned to profitability

Other risers yesterday included Domino’s Pizza Group, up 4.3% to 280.7p, Marston’s (MARS), up 2.2% to 124.5p, Greggs (GRG), up 2% to 2,106p and DS Smith (SMDS), up 17% to 382.9p.

Sainsbury’s (SBRY) was up 2% to 208p after being the best performer of the big four from October’s grocery market share figures. Tesco was down 1.6% to 233.8p despite being the second best amongst the big four.

B&M European Value Retail (BME) dropped 5.6% to 356.8p yesterday despite solid growth in its core UK business as the company was forced to take a writedown and launch a strategic review of its struggling German business.

Other fallers yesterday including Finsbury Food Group (FIF), down 2.9% to 82.5p, Nichols Beverages (NICL), down 2.5% to 1,560p, Ocado (OCDO), down 2.5% to 1,560p, Marks & Spencer (MKS), down 2% to 184.7p and Hilton Food Group (HFG), down 1.7% to 1,020p.

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