UK-listed private-label meat supplier Hilton Food Group has reported a jump in annual profits as expansion in Europe boosted sales.
The company, which sells meat to retailers including Tesco, Ahold and Danish firm Coop, today (29 March) booked an 11% rise in operating profit to GBP25.9m (US$41.2m) for the year to 1 January. Net profit increased 9.2% to GBP17.2m.
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Hilton reported a 13.6% rise in revenue as a new facility in Denmark pushed volumes up 6% and the company was able to recover higher meat prices.
However, underlying volumes were “slightly reduced”, the company said, amid the rise in prices and pressure on consumer spending.
Chief executive Robert Watson said Hilton aimed to be the “best specialist meat packing company in Europe” and said 2011 had been “another successful year” for the group.
“In terms both of sales and profit growth, our performance has remained robust. We have continued to invest to improve the operational efficiency of our packing plants, expand and develop our product ranges and put in place the required capacity for anticipated future growth,” Watson said.
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By GlobalDataPanmure Gordon analyst Graham Jones said 2011 had been “another year of good growth” for Hilton.
“With impressive cash flow, the balance sheet is the strongest of its peers, and we expect further geographic expansion will continue to drive growth going forwards,” Jones said.
He also said Panmure Gordon was increasing its target price for Hilton’s shares from 335p to 355p. The shares, on 10.6x P/E and 5.6x EV/EBITDA for 2012E, continue to trade at significant discount to its key peers Cranswick and Devro,” he said.
Hilton chairman Sir David Naish said trading conditions in 2012 would echo those of last year but insisted the company expected to grow again.
“We expect similar trading conditions featuring comparatively high prices for meat and other commodities and constrained consumer spending. The board considers, however, that Hilton is well placed to deliver continued growth and meet the board’s expectations for 2012.”
Shares in Hilton, which have risen over 16% in the last year, were down 1.61% at 290.25p at 16:03 BST this afternoon.
