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Hilton Food packs in the volumes

The meat packing specialist saw improved operating profit in western Europe, and started work on a new Australian factory
September 13, 2017

Meat packing specialist Hilton Food (HFG) had a jam-packed first half, with the launch of its Portuguese joint venture and initial work started on a new factory in Queensland, Australia. The volume of food packed was up 8.7 per cent against the first six months of 2016, led by Ireland, Sweden, Portugal and Australia – but offset by the “challenging” central European market.

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Hilton’s operations span Europe, and now touch the southern hemisphere, too, reducing exposure to individual markets, which means the group trades in multiple currencies. Thanks to sterling’s weakness, operating profit was up 1.4 per cent at constant currencies but rose 9.0 per cent on a reported basis. Operating profit for its major operations in western Europe rose by a tenth, lifted by higher raw material prices. Volumes grew 12.8 per cent, helped by a good start for the Portuguese joint venture, Sohi Food Solutions.

Meanwhile, central Europe’s operating profit fell significantly from £1.3m to £0.4m, despite turnover increasing by £1.8m. Management cites the “highly competitive and price sensitive landscape” here. There were also start-up costs, such as those required for the launch of a beef de-boning facility.

After the reporting period, Hilton agreed to supply fresh food to Tesco's (TSCO) central European operations. The group is planning a ready-meals facility in the region. 

Analysts at Panmure Gordon forecast adjusted pre-tax profit of £35.4m and EPS of 36.4p for the year to December 2017, up from £33.2m and 33.7p in 2016.

HILTON FOOD GROUP (HFG)   
ORD PRICE:752pMARKET VALUE:£556m
TOUCH:752-775p12-MONTH HIGH:808pLOW: 550p
DIVIDEND YIELD:2.3%PE RATIO:21
NET ASSET VALUE:131pNET CASH:£38.9m
Half-year to 16 Jul*Turnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201663216.716.94.6
201769118.419.25.0
% change+9+10+14+9
Ex-div:2 Nov   
Payment:1 Dec   
*28-week period