Hilton Meats Grows in Challenging Market12 September 2013
GLOBAL - Meat processor Hilton Meats group has seen a good trading performance over the first six months of the year, despite the impact of short term industry issues in the UK and Ireland and weak macroeconomic conditions across most of our European markets.
In the latest company report, Hilton meats said that volumes rose by 0.7 per cent, reflecting the introduction of new product lines in Holland, partly offset by continuing pressure from higher raw material meat prices on consumer demand.
Turnover rose by 9.4 per cent to £593.8 million compared to £543.0 million in 2012 as the group benefitted from the recovery of higher raw material meat prices and the favourable impact of exchange rate movements.
Operating profit for the first 28 weeks of 2013, at £13.4 million, was 1.2 per cent ahead of the corresponding period last year, despite the impact of the initial start-up costs in Australia, which reduced operating profit by 3.8 per cent.
The operating profit margin was 2.3 per cent, compared with 2.4 per cent in the first 28 weeks of 2012, reflecting the impact of increased raw material prices within the company’s fixed packing rate contracts.
Net finance costs, at £0.5 million, were lower than last year when they were £0.7 million with reduced levels of net debt and sterling and euro inter-bank offered rates remaining close to historically low levels.
The taxation charge for the period was £2.9 million the same as in 2012, representing an effective underlying rate of tax of 22.6 per cent, as compared with 23.1 per cent last year.
Profit after taxation, at £10.0 million, was £0.4 million or four per cent above last year when it was £9.6 million with higher operating profit, reduced finance costs, the initial joint venture income and a slightly lower effective rate of taxation.
The share of profit in the group’s joint venture of £0.1 million comprises Hilton Meats’ 50 per cent share of the post-tax profits of the Australian joint venture company, which started earning processing fee income at Bunbury from mid May 2013.
Currently this income is based on low levels of retail packed meat volumes prior to the completion of the conversion of the Bunbury facility which will materially increase the volume of retail packed products delivered from this site.
Start-up costs are always incurred in advance of and during major plant conversions and new builds and over the first 28 weeks £0.5m of start-up costs were incurred in Australia.
Basic earnings per share in the first 28 weeks of 2013, at 13.0p, were 1.6 per cent ahead of those for the first half of last year with a 3.4 per cent increase in net income offset by an increased number of shares in issue, following executive and sharesave scheme share option exercises.
Robert Watson OBE, Chief Executive of Hilton Food Group plc said: “We are pleased to have achieved further growth despite challenging market conditions.
“Strategically we continue to make strong progress and were able to announce last month the construction of a new purpose built retail packing facility in Victoria, Australia, to be operated by our joint venture company.
“Our aim is to continue to extend the geographic reach of the Hilton model and we continue to look for new opportunities.”
TheMeatSite News Desk