Fall in meat prices hit Hilton’s sales
The results were in-line with City analyst Shore Capital’s expectations, which upgraded its recommendation on the firm’s stock from ‘hold’ to ‘buy’.
Shore Capital analyst Clive Black upgraded the advice based on operating benefits to come from investment in Hilton’s UK and Swedish factories, potential to enter new markets, a strong balance sheet and the potential benefit its key client Tesco’s improving fortunes.
Hilton reported total volume growth of 3.6%, with growth in the UK and Netherlands partly offset by continuing pressure on consumer spending in other countries, it claimed.
‘Sound progress’
The firm’s boss Robert Watson said “sound progress” had been made in underpinning its future growth strategy – including UK capacity expansion and the development of its joint venture with Woolworths Limited in Australia.
“The high level of investment made in our meat packing facilities in 2014 was essential to facilitate the group’s planned future growth,” he claimed.
“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.”
Results in numbers
- Group sales down by 2.3% to £1.1bn
- Profit up from £25.8M to £26.1M
- Net cash from operatives activities up by 13.9% to £47.6M
- Net debt of £7.7M
The firm completed its £21.3M expansion and site redevelopment at Huntingdon, Cambridgeshire and started production with Woolworths Limited in Melbourne in the third quarter of the year.
It plans to complete construction of a new raw meat processing site in Victoria, Australia by the third-quarter of 2015.
Its operating profit rose from £25.8M to £26.1M despite the increased level of start-up costs in the UK, Watson said.
Investment
The firm invested a total of £43.3M in its factories in Sweden and the UK – an increase of £18.4M from 2013.
Its total capital expenditure since 2004 was almost £200M as it seeked to be at the forefront of meat processing, the firm claimed.
Hilton’s non-executive chairman, Sir David Naish, said the firm’s strategy was designed to support customers’ brands and achieve attractive growth for shareholders.
“This single minded approach has generated growth over an extended period of time and, with a strong reputation, well invested modern facilities and a robust balance sheet, the Group remains well positioned to achieve further progress,” he claimed.
Hilton operates from six European sites in the UK, Republic of Ireland, Sweden, Netherlands, Poland and Denmark.
