The world may have come to a standstill amid the coronavirus pandemic – but people still need to eat. In fact, last month, many of us frequented food shops more often than we would normally – stocking up for a prolonged period of social distancing. Between 16 and 19 March, 88 per cent of UK households visited a grocer.
That spike in purchasing activity means that there is significant pressure on the supermarket supply chain. But Hilton Food (HFG) is coping so far. All of its facilities remain fully operational, and performance since the beginning of 2020 has been in line with management’s estimates. Of course – as the group concedes – there is uncertainty around how long the impact of the Covid-19 outbreak will last. Still, it has business continuity plans in place, and flexibility to meet increased demand.
For 2019, revenues and earnings were both slightly ahead of analysts’ expectations. Overall volumes rose by 7.8 per cent to 371,715 tonnes. And, demonstrating strong international diversification, more than two-thirds of those volumes were produced in countries outside of the UK. Hilton’s overseas presence will be further enhanced in September, when it starts packing red meat from a site in Belgium for retailer Delhaize.
Broker Panmure Gordon expects adjusted EPS of 49.5p for 2020 – although, as ever, we must assume that forecasts could change in such volatile times.
| HILTON FOOD GROUP (HFG) | ||||
| ORD PRICE: | 1,062p | MARKET VALUE: | £868m | |
| TOUCH: | 1,002-1,090p | 12-MONTH HIGH: | 711p | LOW: 1,128p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 228p* | NET DEBT: | £271m** | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.09 | 27.9 | 27.5 | 14.6 |
| 2016 | 1.23 | 33.2 | 33.7 | 17.1 |
| 2017 | 1.36 | 34.2 | 33.2 | 19.0 |
| 2018 | 1.65 | 43.3 | 39.9 | 21.4 |
| 2019 | 1.81 | 43.2 | 40.5 | 21.4 |
| % change | +10 | -0.4 | +2 | |
| Ex-div: | 28 May | |||
| Payment: | 26 Jun | |||
| **Includes lease liabilities of £183m | ||||
