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LONDON --Hilton Food Group (LSE: HFG.L ) , the leading specialist retail meat-packing business supplying major international food retailers in Europe, announced a turnover of 543 million pounds for the first six months of the year, an increase of 9.4%. However, the increase in sales did not flow through to the bottom line, with operating profit up 0.5% to 13.3 million pounds and profit after tax up 0.4% to 9.6 million pounds. The share price was down 3% on early trading to 288.75 pence.
The Group, which competes alongside Devro in the food-processing market, will be encouraged after turning a cash outflow of 1.4 million pounds in the six months to July 2011 to an inflow of 8.6 million pounds this year. As a result, net debt was reduced from 24.8 million pounds to 14.9 million pounds. Earnings per share remained unchanged from last year at 12.8 pence, and an interim dividend was announced of 3.4 pence, an increase of 9.7%.
Robert Watson, OBE, chief executive of Hilton Food Group, said:
I am pleased to report that, despite the adverse effect of exchange rate movements, an economic environment across Europe which has remained both challenging and uncertain and continued high raw material meat prices, our performance over the first 28 weeks of 2012 has remained steady. We have achieved further growth in volumes and turnover, whilst continuing to actively support our customers' growth in very competitive markets.
The economy has provided difficult trading conditions, and Hilton has managed to grow volumes by 10.3% to reach the turnover generated. In particular, a new Danish facility has contributed to the increase, although overall demand has been subdued by higher raw material meat prices.
Hilton Foods will now hope to build a healthy rise in profits over the remaining six months, although it is heavily dependent on a small number of customers and their related success or failure to sell the packaged meat products. An improvement in the economic environment and a continued healthy supply of meat would be a welcome sight and allow the Group to push on.
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