Boparan - Sarria Daily Comments 18/11/2021

The severe cost pressures on the business haven’t gone away, but the pace of rises is slowing. The labour shortage at Boparan has fallen from >2,500 people to around 1,800, also feed prices over the last month are flattening. Boparan has also managed to source 900 workers from Ukraine, Moldova, Belarus, Romania, and Bulgaria to help fill its Christmas staffing gap. The staff will come to the UK under the Governments Seasonal Agricultural Workers Scheme. Interestingly, Boparan is hoping this temporary visa program will be repeated next year as they do not see the seasonal shortage at Christmas going away. An interesting vignette from one farmer was that historically, a 1,000-acre farm would employ ten people, who could be redeployed to different parts of the business as needed. Now, these farms only have one or two staff. The rural labour pool has shrunk structurally, and this is not likely to reverse. We remain short Boparan for 5% of NAV via the standard 5-year CDS.