Boparan - comment

Inflation recovery in the Meal & Bakery (M&B) business meant that volumes and revenue were significantly higher than we anticipated (£165m vs £103m). As a result, our WC unwind failed to materialise. Boparan did repay £20m of its £60m RCF drawings and given the lack of WC unwind, we now understand why this drawing was made. We had expected significant losses based on the volume falls, but M&B generated £6.6m in EBIT. Lower volumes hurt UK Poultry margins leading to an increase in the proportion of lower-margin sales into the EU. Despite lower poultry margins, a much better-than-expected M&B result meant that EBITDA was £29m, well above our estimate of £8m. We had anticipated much of this improvement coming in Q4 and Q1. We will update our model after the call.