Hilton extends meat supply deal with Tesco
Hilton said the five-year agreement with Tesco would result in a “substantial increase” in the volumes supplied to the retailer from its Huntingdon facility, with the benefits felt from 2015 onwards.
It added that it would make an additional investments at Huntingdon “to raise volumes and introduce new state-of-the-art technology within the facility”.
Robert Watson, CEO of Hilton Food Group said: “This is an exciting development for Hilton. We are proud to have formed a strong, long-lasting partnership with Tesco and we will continue to work closely with them to supply products of the highest quality to their customers.”
Hilton also revealed it was planning to invest in its Swedish operations, with total capital expenditure in the UK and Sweden expected to reach around £30m. This would be financed from “banking facilities” and “cash resources”, it said.
The company’s latest update on trading in Western Europe, excluding the UK, revealed that “slightly lower growth” was expected for the region in 2014, reflecting “macro-economic and consumer weakness in some countries”. However, it added that it expected the impact of this downturn to be “wholly offset” by the positive effect of its agreement with Tesco.
Investment consultancy Investec said it expected the Tesco deal to be worth around £50m in revenue in 2014, with value doubling in 2015 to £100m. Analyst Nicola Mallard said that this would offset the “sluggish” growth in Europe, and should result in overall growth for both the 2014 and 2015 financial years.
“Hilton is securing growth on opposite sides of the world, proving that its business proposition has gained wide acceptance amongst the global retailer network,” she said.
