The UK-based meat company has gradually moved to reduce its economic dependence on one economy and expansion across Asia-Pacific and Europe is starting to bear fruit. Pre-tax profits for the 28 weeks to 17 July came to £16.7m, a 26.7% rise from last year.
International highlights for the business include the roll-out of a new facility in Melbourne, Australia, a joint venture signed with Sonae, Portugal, and an extension to supply fresh pizzas in Sweden.
“Our co-operation with Sonae in Portugal, the market leader there, is actually a fine example of a market that is very competitive, a market that is focused on cost and efficiency and we have proved to them [Sonae] what efficiency we can bring to the market,” said Robert Watson, chief executive of Hilton Foods Group.
“We’re very excited about Portugal and it’s a fine example of how we can enter a foreign market quickly and have a positive impact.”
Foreign exchange glee
A high proportion of Hilton Food Group’s sales are earned in currencies other than sterling and its results had been “favourably impacted” by the weakness of the pound relative to other currencies, according to the company. The euro, Danish krone and Swedish krona all strengthened by at least 6%.
Hilton Foods posted operating profits of £18.1m for Western Europe, helped by an 8.6% rise in turnover, thanks to strong volume growth supported by good foreign exchange rates. Sweden, in particular, saw above-average turnover, thanks to the high price of pork.
On the results, Nigel Majewski, chief financial officer at Hilton Foods Group, said: “We would characterise these results as good underlying growth that has been enhanced by a very successful start-up in Australia, where we have boosted our service fee income by £900,000. On top of that we’ve successfully lowered start-up costs in Australia and the UK and it leaves us well placed to complete the year positively.”
Majewski and Watson were tight-lipped on plans for further geographic expansion, but said the strong performance meant the company was looking at other markets across Europe and Asia-Pacific to enter.
Go to Meat Trades Journal, our sister site, which has covered Hilton Foods’ financial results in full.