Hilton Food Group (HFG) has beefed up its operations down under with the announcement last month that its joint venture with Woolworths, Australia's leading food retailer, is to operate a further meat processing facility near Melbourne, built from scratch and twice the size of the existing Bunbury factory near Perth.
Start-up costs related to the Melbourne facility will total £1m this year and £1m in 2014, with operations going live in 2015. Bunbury's contribution to group earnings at the half-year stage totalled £0.1m, but this was offset by £0.5m of start-up costs. The plant is expected to breakeven this year, before making profits next year as production ramps up.
Strip out the Bunbury costs, and group underlying pre-tax profit actually rose 7 per cent. Sales growth was, however, driven by higher pricing and favourable exchange rates rather than volumes. Here, restricted consumer spending offset gains from new product lines in Holland, leaving volumes up just 0.7 per cent. Meanwhile, the balance sheet strengthened, and net debt fell, with analysts predicting a net cash position by the end of this financial year.
Numis Securities expects full-year pre-tax profit of £25m and EPS of 25.1p, rising to £27.7m and 28.4p in 2014 (from £24.7m and 24.9p in 2012).
| HILTON FOOD GROUP (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 437p | MARKET VALUE: | £313m | |
| TOUCH: | 432p-440p | 12-MONTH HIGH: | 450p | LOW: 258p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 61p | NET DEBT: | 3% | |
| Half-year to 14 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 543 | 12.5 | 12.8 | 3.40 |
| 2013 | 594 | 12.9 | 13.0 | 3.65 |
| % change | +9 | +3 | +2 | +7 |
Ex-div: 30 Oct Payment: 29 Nov | ||||
