UK: Muted profit forecast sends Hilton shares lower
By Dean Best | 11 September 2012
- Hilton issues muted profit forecast
- Trading down, forex hit earnings
- Danish facility boosts sales
 |
Hilton said shoppers were buying cheaper meat |
A more muted profit forecast from UK meat processor Hilton Food Group sent shares in the Tesco and Ahold supplier down in early trading this morning (11 September).
After reporting flat half-year profits, Hilton said it now expects annual earnings to be "similar" to the year before. In March, Hilton said it was "well placed to deliver continued growth" for the year.
For the 28 weeks to 15 July, Hilton booked net profit of GBP9.6m (US$15.4m), as it had a year earlier.
Operating profit inched up 0.5% to GBP13.3m but Hilton said consumers trading down to less expensive cuts of meat hit earnings. It also pointed to a decline in the value of key European currencies.
Turnover increased 9.4% to GBP543m on the back of a 10.3% gain in volumes. Hilton said it was benefiting from the first half-year's contribution from a new facility in Denmark.
Shares in Hilton were down 3.28% at 288p at 10:18 BST.
Tuesday 11 September 2012
Hilton Food Group plc
Interim results for the 28 weeks to 15 July 2012
Continued volume and turnover growth achieved in difficult economic conditions
Hilton Food Group plc, the leading specialist retail meat packing business supplying major international food retailers in Europe, is pleased to announce its interim results for the 28 weeks to 15 July 2012.
|
|
28 weeks to 15 July 2012
|
28 weeks to 17 July 2011 |
Percentage growth |
52 weeks to 1 Jan 2012 |
|
Volume (tonnes)
|
116,179
|
105,305
|
10.3% |
209,086 |
|
Turnover
|
£543.0m |
£496.2m |
9.4% |
£981.3m |
|
Operating profit
|
£13.3m |
£13.2m |
0.5% |
£25.9m |
|
Profit after tax
|
£9.6m |
£9.6m |
0.4% |
£18.6m |
|
Free cash flow before dividends and financing
|
£8.6m |
£-1.4m |
|
£6.8m |
|
Net debt
|
£14.9m |
£24.8m |
|
£18.7m |
|
Earnings per share
|
12.8p |
12.8p |
|
24.7p |
|
Interim dividend to be paid on 30 November 2012 |
3.4p |
3.1p |
9.7% |
11.1p |
- Further volume and turnover growth achieved, despite a challenging economic environment
- Continuing pressure on consumer spending, with the economic backdrop and higher meat prices leading to further down trading to less expensive meat cuts
- Growth in operating profit also held back by the effect of adverse exchange rate movements (reducing operating profit by £0.6m, as compared with the first 28 weeks of 2011)
- Hilton’s new automated store order picking facility for Coop Danmark commenced operation in May 2012, with volumes handled now building up steadily
- Strong cash generation enabling net debt to be reduced by 40%, from £24.8m in July 2011 to £14.9m in July 2012, with the initial investment in the Danish plant now completed
- Robust balance sheet underpins growth in interim dividend from 3.1p to 3.4p, an increase of nearly 10%
Commenting, Robert Watson OBE, Chief Executive of Hilton Food Group plc said:
“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. We have achieved further growth in volumes and turnover, whilst continuing to actively support our customers’ growth in very competitive markets”.
For the full release, click here.
Original source: Hilton Food Group
Sectors: Financials, Meat & poultry, Private label
Companies: Hilton Food Group, Tesco, Ahold
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