Hilton Food Group reported an increase in full-year profits today (31 March) as increased volumes helped the UK meat firm shrug off downward pressure on sales.
The company said operating profit in the 12 months to 3 January rose 11.3% to GBP29m (US$41.6m). Profit before tax increased 11% to GBP28m. Earnings per share rose 10% and the group increased its dividend payment to shareholders by 9.8%.
Earnings growth came in spite of a 0.4% drop in value sales, which fell to GBP1.09bn. The company attributed the decline to the strength of the sterling, with currency exchange weighing 7.4% on the top line. Volume sales, however, increased 5.5%, the group noted in a regulatory filing. Volumes were supported by new capacity, which came online at Hilton’s site in Huntingdon to service increased volumes for Tesco. “New production facilities are fully bedded in, working well and delivering planned operational efficiencies,” Hilton said.
The group added that it is encouraged by the progress of its joint venture with Woolworths plc in Australia, which started production last September.
Chief executive Robert Watson commented: “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.”
Analysts at Shore Capital described the result as a “positive surprise” with profit coming in ahead of expectations. “The Hilton model has undoubtedly benefited from the return to robust volume growth, with total volumes across the group up 5.5%, albeit sales dipped by 0.4% reflecting currency headwinds,” the analysts noted.