Robert Watson, chief executive of Hilton Food Group (HFG), says 2014 will be about "strategic development". Capital spending is set to more than double to roughly £45m as the meat processor expands its UK facilities and upgrades production lines in Sweden to meet growing demand.
This follows a year of equally remarkable change and investment for Hilton. The key developments were a joint venture with Australian supermarket chain Woolworths and a five-year supply agreement with Tesco in the UK, which will substantially increase volumes. This deal is significant as it formalises arrangements in an industry where verbal commitments are more commonplace.
Operating profit dipped marginally last year, to £25.8m from £26m, but that was due to start-up costs of £1.4m relating to the joint venture. Profit was higher at the pre-tax level thanks to lower borrowing costs. Top-line growth was driven by a 2 per cent increase in volumes, as strong trading in Holland and Denmark offset declines in Ireland and central Europe, bolstered by higher meat prices and favourable exchange rates.
Broker Numis Securities expects pre-tax profit of £27.2m in 2014, giving EPS of 27.4p.
| HILTON FOOD (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 503p | MARKET VALUE: | £363m | |
| TOUCH: | 500-505p | 12-MONTH HIGH: | 510p | LOW: 335p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 69p | NET CASH: | £4.9m | |
| Year to 29 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.83 | 20.1 | 20.1 | 9.36 |
| 2010 | 0.86 | 22.2 | 22.6 | 10.2 |
| 2011 | 0.98 | 24.5 | 24.7 | 11.1 |
| 2012 | 1.03 | 24.7 | 24.9 | 12 |
| 2013 | 1.12 | 24.9 | 25.0 | 12.75 |
| % change | +9 | +1 | +0 | +6 |
Ex-div: 28 May Payment: 27 Jun | ||||
