Hilton Food Group said this morning (5 November) that trading for the first nine months of the year had come in “slightly above the board's expectations”, thanks to volume growth in some areas and cost efficiencies.
The company revealed that western Europe delivered “good volume growth” as the UK was lifted by recent capacity expansion that was delivered at lower-than-anticipated start up costs. Holland performed well, while Sweden was boosted by savings that were passed on to customers, the meat group commented. Denmark, however, "remains slow".
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In central Europe, the company reported volume growth in the Baltic states, while its Australian joint venture is “making excellent progress” and meeting its roll-out schedule.
Hilton concluded: “The group's financial position remains strong with the group continuing to generate cash in line with the board's expectations, leaving Hilton well-placed to continue to explore opportunities to grow the business in both domestic and overseas markets.”
Shore Capital analyst Darren Shirley concurred that the group's financial position leaves it well-placed to expand into new markets, possibly leveraging relationships with key customers such as Delhaize. "Hilton Foods is a high quality company, we have already highlighted the strong balance sheet and cash generation and we also point to very well invested facilities and the ambitious management team. Ambitions to move into new markets remain intact, and we see the potential to leverage a strong relationship with Ahold to be a medium term beneficiary from the proposed merger with Delhaize merger," the analyst wrote in an investor note.
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