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Hilton predicts more growth in 2016

By Rick Pendrous+

08-Feb-2016
Last updated on 08-Feb-2016 at 14:34 GMT2016-02-08T14:34:50Z

Meat supplier Hilton exceeded its board's expectations for 2015 trading
Meat supplier Hilton exceeded its board's expectations for 2015 trading

Hilton Food Group, the international specialist meat packing business, has predicted a “positive” 2016 as it released a trading update last month for the 53 weeks to January 3 2016, which exceeded its board’s expectations.

Shore Capital analysts Clive Black and Darren Shirley attributed Hilton’s positive results to the addition of a 53rd week to trading, which contributed 2% to the upgrade; a strong Christmas trading period with some key customers, such as Tesco performing well and reporting volume growth and like-for-like sales up 1.3% for the six weeks to January 9; and the release of some volume-driven incentive provisions, which had supported margins.

Black and Shirley raised their forecasts for Hilton’s full-year results – which will be released on March 31 – by 4.5%, with turnover expected to be about £1.1bn and profit before tax (PBT) up from £25.9M to £27M. City analyst Nicola Mallard at Investec also raised her 2015 full-year forecast by 5.0%, with PBT expected to rise from £25.1M to £26.3M.

Major step forward

While Mallard put this down to some “one-off” factors and, therefore, kept her 2016 and 2017 forecasts the same, she added: “We still anticipate a major step forward in 2016, with new volume wins annualising in the UK and the new Victoria site contributing in Australia.”

In western Europe, Hilton delivered additional volumes in both the UK, which benefitted from the recent capacity expansion, as well as in the Netherlands, where the business also performed well.

Volume growth in these countries was partly offset by lower demand in Denmark, while volumes in Sweden remained steady.

Highly competitive

In central Europe, which remained highly competitive, the group’s performance was in line with its expectations, it claimed. Growth was achieved in Poland, Hungary and the Baltic states.

Hilton’s joint venture in Australia continues to make good progress, it added. Its Victoria plant began production successfully and continues to meet its roll-out schedule, while maintaining high service levels.

Hilton noted that although the business environment remained competitive, the outlook for 2016 was positive. The group’s financial position remained strong, it said, leaving it well positioned for future expansion.

The company said it was well placed to deliver continued growth over the medium term. Hilton also announced that it would explore further opportunities to develop its business in both domestic and overseas markets.