11 December 2019 by lberuti
BOPRLN (Boparan Finance Plc) is the parent company for 2 Sisters Group (2SFG). The group processes chicken and supplies poultry and prepared meals to supermarkets. It produces roughly one third of all the poultry products consumed in the UK. A couple of years ago, it went in the spotlight for all the wrong reasons after ITV News and the Guardian published a report claiming to have uncovered a series of safety breaches at the poultry plants of 2SFG. The resulting investigation by the Food Standard Agency highlighted “several process weaknesses and regulatory failures”, and eventually led to the appointment of Andrew McInnes as managing director of the poultry division. Early November, an internal memo informed employees that he was leaving the company after only a year in the job. That sparked concerns among investors who, in a knee jerk reaction, pushed BOPRLN’s 5-year risk premium to a local high. Today the company reported 1Q results in line with previous guidance (like-for-like Ebitda up 42.4% to GBP22.5m in 1Q compared to the same period in 2018 ; sales down 4.4% but up 0.6% on like-for-like basis) followed by positive commentaries during the management call regarding margins of the poultry business in the coming year. It confirmed the recent positive trajectory of BOPRLN’s risk premium, as it closed almost 4pts upfront tighter at 28pts + 500bps running.