Strong Progress By Hilton Food Group
Hilton Food Group, the specialist retail meat packing business supplying major international food retailers in thirteen European countries and Australia, has reported a 0.4% fall (1.9% on a 52-week basis) to £1.09 billion for the 53 weeks ended 3 January 2016, with unfavourable exchange rate movements more than offsetting the group’s volume gains. Hilton Food Group achieved overall volume growth of 5.5% (4.0% on a 52-week basis) with volume increases in the UK, Ireland, Holland and Central Europe, but lower volumes in Denmark.
Operating profit at £29.0 million was 11.3% (9.0% on a 52-week basis) above the previous year’s level and 20.9% higher on a constant currency basis. The operating profit margin in 2015 was 2.6%, as compared with 2.4% in 2014, reflecting the higher operating profit level and the operating profit per kilogram of packed meat sold was 11.9p (11.3p in 2014).
During the year, Hilton invested in modernising and expanding the capacity of its UK site in Huntingdon, to service increased volumes for Tesco. The new production facilities are fully bedded in, working well and delivering planned operational efficiencies. Hilton also continued to make progress with its Australian joint venture with Woolworths. A new dedicated retail packed meat facility, near Melbourne, operated by the joint venture company, commenced production on schedule in September 2015. A store roll out plan covering Victoria and South Australia has now been completed.
Robert Watson OBE, chief executive of Hilton Food Group, comments: “During 2015 Hilton made strong progress in pursuing its growth strategy, including the expansion of the Australian joint venture and the completion of the major UK capacity expansion project. We will continue to look for available opportunities to progressively and profitably expand the scale and scope of our operations as they arise using a business model that has over time proved to be successful, resilient, relevant and internationally transferable.”
Investment expenditure will now return to maintenance levels at £13.7 million, against £43.3 million in 2014, following completion of the major re-investment programmes undertaken in the UK and Sweden.
In Europe, Hilton has facilities in six countries each run by a local management team and operating under the terms of five to ten year long term supply Agreements with retail partners, either on a cost plus or agreed packing rate basis.
“Hilton’s medium term growth outlook remains encouraging following the successful completion of the UK capacity expansion and site redevelopment project in Huntingdon and the start of production with our Australian joint venture partner at Melbourne,” says Robert Watson. “Notwithstanding competitive market conditions, overseas currency fluctuations and pressure on consumer expenditure Hilton is therefore confident of growing its business with continued focus on new product development and range extension.”
