Revenues for 2011 grew by 13.6% to £981.3m, which the company attributed to the recovery of higher raw material meat prices, as well as the start-up of a new facility in Denmark, which helped to drive volume growth of 6%. Underlying volumes, however, were slightly reduced, Hilton said, due to pressure on consumer spending levels in the face of increased meat prices.
However, the company added that strong economic conditions in Sweden and central Europe had helped revenues grow.
Chief executive Robert Watson said: “Once again I am pleased to report that, during 2011, Hilton has delivered a good performance, continuing to demonstrate the resilience of the group’s business model. Revenue growth was strong in 2011 and further success was achieved with new product and packaging initiatives. We have been able to maintain a high level of investment in our modern meat-packing facilities across Europe, designed to keep them at state-of-the-art levels.”
Operating profit of £25.9m, up 11%, with strong cash generation enabling the group to maintain a high level of investment in equipment and facilities. Despite capital expenditure of £25.2m, net debt levels were only marginally increased at £18.7m. Around £14.6m was spent on the new Danish business, which incorporates a new robotic store order picking facility, due to be operational in the second quarter of 2012.
In the past 12 years, the company has concentrated on international development, with the result that 74% of its revenue now comes from outside the UK, with 77% of the volume of meat packed outside the UK, in northern and central European countries.
The company said it remained committed to pursuing progressive geographical, service and product range expansion while actively developing and expanding the scope of existing business partnerships, and improving and developing its facilities.
However, non-executive chairman Sir David Naish said that the outlook for 2012 was difficult to forecast. He said: “The group’s past growth has been achieved through a combination of carefully considered geographical expansion, together with the achievement of continuing progress within each country in which it operates. Currently, short-term economic trends across Europe are very difficult to forecast, but the group’s business model has proved resilient and we remain well-placed to benefit from any improvements in economic conditions when these eventually come through.
“In 2012 we expect similar trading conditions, featuring comparatively high prices for meat and other commodities and constrained consumer spending. The board considers, however, that Hilton is well-placed to deliver continued growth and meet the board’s expectations for 2012.”
Growth in western Europe (covering the UK, Ireland, the Netherlands, Sweden and Denmark) saw “significant progress”, with volumes up 6.5%, and turnover growth of 14.4%. Operating profits were £23.2m. Central European growth from the plant in southern Poland saw volume growth of 4%, with turnover increasing by 5.7%, and an operating profit of £2.7m. The company said that volume growth was key in achieving very low levels of unit packing costs to allow Hilton’s customers to compete and grow in competitive developing markets.
The group also announced that commercial director Colin Patten, who was previously managing director at Hilton Meats (International), the UK meat wholesaling company and a director of Hilton Meats Products, before joining Hilton Group in 1994, will be standing down from the board.
The Cambridgeshire-based group supplies major international food retailers Tesco, Ahold, Albert Heijn and ICA.
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