Reporting on preliminary results for the 53 weeks to 3 January 2016, the UK-based business’ chief executive Robert Watson hailed Hilton Food Group’s “strong progress in pursuing its growth strategy”. This plan included the expansion of a joint venture in Australia, completion of a capacity expansion project in the UK, as well as a reinvestment initiative in Vesteras, Sweden.
In the trading figures, Hilton Food Group posted year-on-year operating profit growth of 11.3% (£29m in the period compared to £26.1m in 2014). Pre-tax profit was up 11% on 2014 (£28m compared to £25.2m).
UK pound deprecition
“These are good results for the specialist meat-packing firm,” financial analyst Joshua Raymond of XTB.com told our sister site Meat Trades Journal. “The key now will be whether the firm can maintain its growth strategy in 2016, despite concerns over a slowdown in global growth and a potentially fragile UK environment against the backdrop of the Brexit vote.”
Raymond added that “it’s clear” the depreciation of the UK pound in 2016, which has dropped owing to international Brexit concerns, “will have an underlying impact” on Hilton Food Group’s sterling reported revenues for the first half of 2016.
A referendum will be held on 23 June for the UK to remain in, or leave, the European Union – known colloquially as Brexit.
When asked if the looming referendum would impact the financial performance of Hilton Food Group, a company spokesman only said: “The business has made it clear that it will maintain a neutral stance on the referendum and will work going forwards with whatever the outcome is.”
Successful investments
Despite a rise in its operational profits, Hilton Food Group reported a 0.4% decline in revenue when compared to 2014. It also saw a significant drop in investment expenditure for the year – £13.7m compared to £43m in 2014. Volume sales, however, grew 5.5% over the year.
Commenting on the results, Sir David Naish, Hilton Food Group’s non-executive chairman, said: “Over the last two years we have made major new investments to secure the group’s future growth potential. The principal items of expenditure involved the redevelopment of the group’s facilities in Huntingdon to enable the planned UK volume increases for Tesco and a re-investment programme at Vasteras in Sweden. Both projects were successfully completed in early 2015, providing additional capacity and delivering considerable improvements in operational efficiency.”