A contract to supply Tesco in the UK and new product lines in Holland drove first-half volumes up 4 per cent at Hilton Food Group (HFG). But sales were nonetheless flat, due to currency headwinds and lower meat prices. Start-up costs of £1.2m, relating to production in Australia and the UK, put further pressure on profitability, leaving group operating profit just 1 per cent higher at £13.6m.
Management also told us to expect flat net profit growth for the full year, due to ongoing currency headwinds, lower meat prices, constrained spending in western Europe and a slight delay in completing the overhaul of the processing facility at Huntingdon in the UK. This should be finished by the end of the current year, incurring start-up costs of £300,000 to £500,000 in the first quarter of next year. Meanwhile, a facility upgrade in Sweden is also on track to finish by the year-end, and a new meat-packing facility near Melbourne, Australia - undertaken by Hilton's joint venture with Australian retailer Woolworths - is under construction, with completion expected in the second half of 2015.
Broker Numis Securities expects pre-tax profit of £24.9m for the full-year, giving EPS of 25p (flat on last year).
| HILTON FOOD GROUP (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 444p | MARKET VALUE: | £321m | |
| TOUCH: | 442-445p | 12-MONTH HIGH: | 534p | LOW: 418p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 70p* | NET DEBT: | 10% | |
| Half-year to 13 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 594 | 13.0 | 13.0 | 3.65 |
| 2014 | 592 | 13.1 | 13.1 | 3.8 |
| % change | -0 | +1 | +1 | +4 |
Ex-div: 30 Oct Payment: 28 Nov *Includes intangible assets of £8.92m, or 12p a share | ||||
