FDBusiness.com

Hilton Food Group, the leading specialist retail meat packing business supplying major international food retailers in Europe, has reported continuing pressure on consumer spending, with the economic backdrop and higher meat prices leading to further down trading to less expensive meat cuts. In the 28 weeks to 15 July 2012, the group increased turnover rose by 9.4% to £543.0 million with the recovery of higher raw material meat prices being offset by the impact of adverse exchange rate movements and continuing consumer down trading. Volumes grew overall by 10.3%, including the first half of a full year’s trading from the group’s new Danish facility, offset by the continuing impact of higher raw material meat prices on consumer demand.

However, operating profit margin was 2.4%, compared with 2.7% in the first 28 weeks of 2011. Excluding the impact of adverse exchange rate movements, the operating profit margin would have been 2.5%.

Operating profit for the first 28 weeks of 2012, at £13.3 million, was 0.5% ahead of the corresponding period in 2011. In the first 28 weeks of 2012 the average Euro to Sterling exchange rate was 1.22, as compared with 1.15 in the corresponding period last year, and there were also reductions in the relative values of the Swedish Krona, Danish Krone and the Polish Zloty, which together negatively impacted operating profit growth by £0.6 million. 

“I am pleased to report that, despite the adverse effect of exchange rate movements, an economic environment across Europe which has remained both challenging and uncertain and continued high raw material meat prices, our performance over the first 28 weeks of 2012 has remained steady,” says Robert Watson OBE, chief executive of Hilton Food Group. “We have achieved further growth in volumes and turnover, whilst continuing to actively support our customers’ growth in very competitive markets.”