Continued growth for Hilton Food Group
Despite “challenging market conditions”, retail meat packaging business Hilton Food Group has reported strong growth for the 28 weeks to 17 July 2016.
The company, based out of Cambridgeshire but with international operations, experienced a 21.3% growth in operating profit on a constant currency basis while turnover increased 5.3%.
Operating profit came in at £17.3 million, up 25.7% and profit before tax grew 26.7% from £13.2m for the same period last year to £16.7m for 2016. The largest growth was basic earnings per share which increased by 28% year-on-year.
While the firm saw strong financial growth, it is also seeing further strategic progress. In Portugal, the business signed a co-operation agreement with retailer Sonae as well as seeing a range extension in Sweden to supply fresh pizzas.
“Despite challenging market conditions, we are pleased to report good volume and profit growth with profitability benefiting from favourable exchange rate movements,” commented chief executive Robert Watson.
“We have made strategic progress particularly in terms of geographic expansion with the roll-out in Australia and the early stages of a partnership with Sonae in Portugal. We continue to grow our existing business through innovation and product development, including the establishment of a meat trading business in the UK to utilise our industry experience, procurement strength and trade contacts together with the Swedish range extension into pizzas later in the year. We will continue with our strategy of furthering the geographic reach of the Hilton model exploring a range of new expansion opportunities.”
Volumes grew 4.5% in the face of competitive retail grocery markets, with turnover increasing by 9.1% to £631.9m, up from £579.2m for last year.
At £17.3m, operating profit for the first 28 weeks of 2016 was up 25.7% compared to the year previous and 21.3% on a constant currency basis. This was driven by organic volume growth in Europe, the roll out of a new facility in Melbourne, lower start-up costs and the successful start of Hilton’s UK meat trading business. Operating profit margin increased to 2.7% compared with 2.4% in the corresponding period last year.
For the first 28 weeks of the year, Hilton Food Group generated a cash inflow of £12.8m before minorities, dividends and financing.
“A 28% increase in earnings per share to 16.9p [up from 13.2p] is the standout result from the latest trading by Hilton Food Group, which can be described as impressive overall with both the top and bottom line growing notably,” commented market analyst at XTB.com, David Cheetham.
“A new facility in Melbourne, Australia, as well as a range extension in Sweden have contributed to the 9.1% rise in turnover as the firm continues to pursue strategic growth options and expand its operations.
“There’s a lot to like about this update, with only a small decline in the cash inflow a potential negative. This is possibly due to the credit terms upon which transactions are carried out becoming slightly less favourable, but the accompanying rise in net cash and an ungeared balance sheet means shareholders shouldn’t be too unduly concerned by this and will likely focus more on the many positives in the report.”
For more on Hilton Food Group's international operations, visit Meat Trades Journal's sister site GlobalMeatNews.
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