Hilton growth dulled by currency weakness
The continuing growth in turnover of meat packer Hilton was dulled by currency weakness, city analysts have said.
Hilton’s results in the 28 weeks to 15 July, released last week (19 July), showed resilience in Western market despite tough conditions and “constrained” consumer demand. The markets in Denmark was particularly strong, driving growth, but the Netherlands, UK and Sweden also performed well.
The company said: “As anticipated, raw material prices throughout the period have remained high, while the weakening of the Euro, Swedish Krona and Polish Zloty has resulted in a negative foreign currency translation effect when compared to the same period last year.
“Against a background of challenging market conditions and constrained consumer demand, leading to down trading in some of our markets, the Company has continued to deliver turnover growth.”
Analysts at Investec Securities said that it expected progress during the financial year, but that the first half was being weakened by currency constraints.
“Central Europe continues to show growth, where the economies are a little more buoyant, and Denmark will make a ‘proper’ contribution this half, relative to its start up in the first half of 2011. However, whereas the progress would have been double digits on a constant currency basis, on a reported basis, foreign exchange will take around 5% of this, leaving revenue growth at the mid-single digit level. “
It forecast the fist half to be £12.7m compared to £12.6m in the previous year, partly as a result of one-off costs in the new store order-picking facility in Denmark and slower overall volume build than had been hoped for over the first half.