Growth in meat-loving Australia is an exciting development for Hilton Food (HFG). In 2015 the meat packaging group opened its second facility there with the country's biggest retailer, Woolworths (Au:WOW). Profit from this joint venture increased 38 per cent to £1.2m. Together with margin improvements, this helped operating profit rise 11 per cent to £29m.
Investments made in the UK business also started to bear fruit in the year. A major expansion project at the Huntingdon facility led to an increase in the group's share of the meat packaging business at Tesco. The subsequent 13 per cent hike in UK sales helped to boost operating profit 18 per cent in the western Europe region.
Although turnover in this division was up 8 per cent at constant currencies, the weakness of the euro has continued to hurt reported profit. In central Europe, currency headwinds and competition resulted in a fall in revenue, despite an 8 per cent volume growth.
Hilton Food benefited from a one-off £0.6m gain in operating profit in its 53rd week of trading in 2015, which meant full-year profit beat Panmure Gordon's forecasts. The broker is expecting adjusted pre-tax profit of £30.8m and EPS of 31.2p in 2016, up from £27.9m and 27.5p in 2015.
HILTON FOOD (HFG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 515p | MARKET VALUE: | £376m | |
| TOUCH: | 500-520p | 12-MONTH HIGH: | 574p | LOW: 410p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 87p* | NET CASH | £12.7m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 0.98 | 24.5 | 24.7 | 11.1 |
| 2012 | 1.03 | 24.7 | 24.9 | 12.0 |
| 2013 | 1.12 | 24.9 | 25.0 | 12.8 |
| 2014 | 1.10 | 25.2 | 25.0 | 13.3 |
| 2015** | 1.09 | 27.9 | 27.5 | 14.6 |
| % change | -1 | +11 | +10 | +10 |
Ex-div: 2 Jun Payment: 1 Jul *Includes intangible assets of £10.1m, or 14p a share **53-week period to 3 Jan 2016 | ||||
