Hilton improves UK operational performance

By Michelle Perrett

- Last updated on GMT

Hilton set out six strategic objectives with its latest financial results
Hilton set out six strategic objectives with its latest financial results

Related tags: Joint venture, Europe

Hilton Food Group has revealed that a major investment programme at the group’s UK facilities in Huntingdon is generating “improved operational performances”.

The investment, which took place at the group’s facilities in Huntingdon, was to enable for planned UK volume increases for Tesco. The development involved the streamlining and modernisation of the facility, including the extension of the processing and packing capacity, with a further production unit. 

Hilton reported the new update had “bedded in”​ and was generating “improved operational performances”​ more rapidly than previously expected.

The group also said that it opened a new meat processing facility for Australian supermarket Woolworths’ near Melbourne in Victoria in September 2015.​ The joint venture means that Hilton manages Woolworths' meat processing and packing facilities at Bunbury in Western Australia, Brisbane in Queensland and the new meat packing facility near Melbourne.

The company received a volume related management fee in respect of the facilities it operates on behalf of Woolworths.

Operating profit of £29M 

The group, which operates in 13 European countries and Australia, revealed operating profit of £29M, up by 11.3% on 2014, for the year ending January 3, 2016. The group’s net income in 2015 reached £20M, up 10.8%.

The business in western Europe covered the UK, Ireland, Holland, Sweden and Denmark. Operating profit hit £32.1M versus £27.1M in 2014, on turnover of £1.02bn. Volume growth of 5.1% was achieved, driven mainly by growth in the UK, as well as Ireland and Holland. Volumes in Denmark were reduced, with consumer spending remaining under continuing pressure and in Sweden volumes remained relatively steady.

In central Europe the group’s meat packing business, based at Tychy in Poland, supplied customers across central Europe, from Hungary to the Baltics. Operating profit was down to £2.3M from £2.4M in 2014, against a lower turnover of £74.1M, which dropped from £82.2M. The drop was due, in part, to competitive trading conditions, consumers trading down, lower raw material prices and exchange rate movements, said the manufacturer.

In Australia, the joint venture with Woolworths resulted in management share of £1.2M compared with £1.3M in 2014. The fall was said to reflect start-up and support costs in connection with the joint venture of £1.2M and central costs of £5.4M.

Extending its product range

Hilton said its future strategy would focus on growing volumes and extending its product range; optimising the use of its assets as well as investing in new technology and capacity; remaining vigilant on food safety and entering new territories.

Chief executive Robert Watson said: “Hilton’s medium term growth outlook remains encouraging following the successful completion of the UK capacity expansion and site redevelopment project in Huntingdon and the start of production with our Australian joint venture partner at Melbourne.

“Notwithstanding competitive market conditions, overseas currency fluctuations and pressure on consumer expenditure Hilton is therefore confident of growing its business with continued focus on new product development and range extension.”

It was also revealed that Sir David Naish, non-executive chairman, would step down and be replaced by Colin Smith.

 

Hilton’s six strategic objectives

  1. Growing volumes
  2. Extending its product range
  3. Optimising the use of its assets
  4. Investing in new technology and capacity
  5. Remaining vigilant on food safety
  6. Entering new territories

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