Profit rise for Hilton Food Group as expansion plans come to fruition
Hilton Food Group saw strong operational growth in 2015, completing two major estate projects over the past 12 months.
In its preliminary results for the 53 weeks to 3 January 2016, the meat packing business posted a year-on-year operating profit growth of 11.3% for the year (£29 million compared to £26.1m in 2014) while profit before tax was up 11.1% on 2014 (£28m compared to £25.2m).
Its revenue did see a 0.4% decline compared to 2014. It saw a significant drop in investment expenditure for the year – £13.7m compared to £43m in 2014. Volume sales grew 5.5% over the year.
Chief executive Robert Watson said: “I am pleased to report that, during 2015, Hilton made strong progress in pursuing its growth strategy, including the expansion of the Australian joint venture and the completion of the major UK capacity expansion project. We will continue to look for available opportunities to progressively and profitably expand the scale and scope of our operations as they arise using a business model that, over time, has proved to be successful, resilient, relevant and internationally transferable.”
Hilton Food Group also acknowledged the “significant extension of the Huntingdon site’s processing and packing capacity, the addition of a further production unit and the streamlining and modernisation of the complete facility”. The extension was introduced to service increased volumes for Tesco.
On an international level, one of the company’s 2015 highlights was the commencement of production at its Woolworths meat processing site near Melbourne in Australia.
Sir David Naish, non-executive chairman, said: “Over the last two years we have made major new investments to secure the group’s future growth potential. The principal items of expenditure involved the redevelopment of the group’s facilities in Huntingdon to enable the planned UK volume increases for Tesco and a re-investment programme at Vasteras in Sweden. Both projects were successfully completed in early 2015, providing additional capacity and delivering considerable improvements in operational efficiency.”
Joshua Raymond, of XTB.com, commented on the results: “Hilton Food Group reported a fairly resilient 11% rise in pre-tax profits to £28m for its 2015 preliminary results, with volume sales growing at 5.5%. These are good results for the specialist meat-packing firm, with a strong UK performance helping to counter tough trading in Denmark.
“The key now will be whether the firm can maintain its growth strategy in 2016, despite concerns over a slowdown in global growth and a potentially fragile UK environment against the backdrop of the Brexit vote. Given that 62% of the growth’s turnover was realised in countries in which it operates outside the UK, it’s clear that the relative depreciation of the pound since the turn of the year, over Brexit fears, will have an underlying impact on its sterling reported revenues for the first half of 2016. It is also important that the firm starts to see progress in its joint venture in Australia, now that production has started there.”
He added: “Shareholders reacted warmly to the results, with the firm’s share prices rallying more than 3% in early trading.”
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