Hilton Food Group went ex-growth after reporting flat profits at the half-way stage, and warning that a combination of pressure on consumer expenditure, high meat prices and a trend towards cheaper cuts of meat will leave full-year profits similar to last year. Accordingly, analysts at Peel Hunt have reduced their full-year estimates by 6 per cent and now forecast adjusted pre-tax profits of £26m and EPS of 26.2p.
Turnover in western Europe increased 9 per cent to £493m, thanks to a full half-year contribution from the new production facility in Denmark and the recovery of higher raw material meat costs. However, consumers trading down to cheaper cuts of meat and adverse exchange rates meant operating profits here fell slightly from £12.1m to £11.9m.
Profits were also held back by currency weakness in eastern Europe following a 13 per cent fall in the Polish Zloty against sterling. So, although operating profits rose by £0.3m to £1.4m in the region, driven by double-digit volume growth, Hilton believes that adverse currency moves hit group operating profits by £0.6m.
Still, Hilton's finances remain in good shape, with strong cash generation cutting net debt by 40 per to £14.9m and supporting a 10 per cent dividend hike.
| HILTON FOOD (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 289p | MARKET VALUE: | £205m | |
| TOUCH: | 280-290p | 12-MONTH HIGH: | 310p | LOW: 235p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 41p | NET DEBT: | 46% | |
| Half-year to 15 Jul | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 496 | 12.6 | 12.8 | 3.1 |
| 2012 | 543 | 12.5 | 12.8 | 3.4 |
| % change | +9 | -1 | - | +10 |
Ex-div: 31 Oct Payment: 30 Nov | ||||
