FDBusiness.com

Hilton Food Group, the specialist retail meat packing business supplying major international food retailers in thirteen European countries and Australia, has reported revenue fell by 2.3% to £1.099 billion, for the 52 weeks ended 28 December 2014, reflecting unfavourable exchange rate movements and the effect of lower raw material prices on selling prices. Volumes grew overall by 3.5% with strong volume increases in the UK and Holland offset by volume reductions in Ireland, Denmark and Central Europe in difficult trading conditions.

Operating profit, at £26.1 million was above the previous year’s level of £25.8 million after bearing increased start-up costs incurred in the UK and the impact of adverse exchange translation movements. The operating profit margin in 2014 was 2.4%, as compared with 2.3% in 2013, reflecting both the higher operating profit level and the impact of lower raw material meat prices, which do not under all Hilton’s pricing arrangements give rise to a corresponding margin decrease. Operating profit per kilogram of packed meat sold was 11.3p down from 11.5p in 2013.

Profit for the year, at £19.6 million was slightly higher than last year’s £19.4 million, reflecting the increase in operating profit partly offset by a slightly higher effective rate of taxation.

In the UK, investment to modernise and expand the capacity of the group’s Huntingdon site and service increased volumes for Tesco is well advanced, with the new production facilities fully commissioned.

In Australia, Hilton Food Group’s joint venture with Woolworths is performing well. The conversion of the Bunbury site in Western Australia to substantially increase retail packed meat production was successfully completed in the first half of 2014. Construction of a new dedicated retail packed meat facility, near Melbourne in Victoria, to be operated by the joint venture with Woolworths is on schedule to commence production in the third quarter of 2015.

Robert Watson OBE, chief executive of Hilton Food Group, comments: “During 2014 Hilton made sound progress in underpinning its future growth strategy, including the continued development of our Australian joint venture and the major UK capacity expansion. The high level of investment made in our meat packing facilities in 2014 was essential to facilitate the group’s planned future growth. We will continue to seek out available opportunities to progressively and profitably expand the scale and scope of our operations, employing a business model that remains resilient, relevant and internationally transferable.”