Shore Capital analysts Darren Shirley and Clive Black expected the food group to have a turnover of £1,174M in 2016, rising to £1,200M in 2017.
Shirley and Black expected the UK growth would “underpin UK volume growth until quarter 3 2016”.
“After breaking even in 2015 [financial year], we expect a positive profit contribution from Hilton’s antipodean activities in 2016 and beyond,” they said.
Their comments followed a trading update released by Hilton, which reported first quarter performance “in line with the board’s expectations”.
Volume growth in the UK market was within Hilton’s expectations.
“In western Europe, we have made good progress in a number of markets. In the UK, as anticipated, volumes have continued to grow relative to last year,” said Hilton.
‘Encouraging signs’
“The Irish business has also continued to show encouraging signs, with growth in the first quarter.”
Hilton revealed an investment programme at its Huntingdon, Cambridgeshire facility in March this year.
The investment has streamlined and modernised the plant and extended processing and packing capacity. Hilton said the work had “improved operational performances”.
In its latest trading update, Hilton said its joint venture with supermarket chain Woolworths in Australia was helping to grow volumes in line with its agreed plan with the retailer.
The food group opened a meat processing and packaging plant for Woolworths near Melbourne in September last year. Hilton also has meat processing and packaging plants in Bunbury, Brisbane and Queensland.
‘Financial position remains strong’
“The group’s financial position remains strong, underpinned by good operating cash flows,” said Hilton. “[The company] continues to explore opportunities to grow the business in both domestic and overseas markets.
“We have continued to grow by developing the business in existing markets and also through our geographical diversification.”
Interim results for the 28 weeks ending July 17 this year are expected to be released by Hilton on September 13.
Meanwhile, Hilton’s chief operating officer for continental Europe Theo Bergman stepped down from the board last month.
Philip Heffer takes over from Bergman, having been appointed chief operating officer for all of Hilton’s businesses.
Hilton Food Group – Shore Capital forecast
- £1,174M turnover in 2016
- £1,200M turnover in 2017
- £31M profit before tax 2016
- £32.9M profit before tax 2017