With supermarkets in the UK under pressure and consumer spending on the continent tight, you might think meatpacking company Hilton Food Group (HFG) would be struggling. But thanks to its recently established contract with Tesco (TSCO), a return to growth for its Irish business and solid sales in Holland, the group has weathered the sector's wider challenges relatively well.
Admittedly, the numbers look a bit flat, with operating profits rising 1.3 per cent to £13.7m. The company did manage to sell almost 128,000 tonnes of stock - 5 per cent more than in the same period last year - but the impact of currencies, especially the weak euro, dented revenues. Without the distorting effect of currencies, chief executive Robert Weston said operating profits would have risen by 11.3 per cent.
One aspect of the accounts with more life was free cash flow (excluding financing activities), which turned from an outflow of £2.8m to an inflow of £13.4m. This was largely thanks to the completion of a massive £43.3m programme of capital expenditure, including in its UK and Swedish plants, allowing cash generated from operations to be stockpiled - including for acquisitions. Mr Watson said the group was now "looking to identify new opportunities" and was involved in "a number of active discussions".
Analysts at Peel Hunt expect full-year pre-tax profits of £25.5m, leading to EPS of 25.3p, up from £25.2m and 25.1p in FY 2015.
| HILTON FOOD GROUP (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 432p | MARKET VALUE: | £315m | |
| TOUCH: | 425-440p | 12-MONTH HIGH: | 500p | LOW: 342p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 75p* | NET DEBT: | 4% | |
| Half-year to 12 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 592 | 13.1 | 13.1 | 3.8 |
| 2015 | 579 | 13.2 | 13.2 | 4.1 |
| % change | -2 | - | +1 | +8 |
| *Includes intangible assets of £10.9m, or 15p a share | ||||
