Hilton Foods profit growth reinforces global expansion

By Oscar Rousseau contact

- Last updated on GMT

Hilton Foods said profits were enhanced by reduced start-up costs for Australian and UK ventures
Hilton Foods said profits were enhanced by reduced start-up costs for Australian and UK ventures
Meat packer Hilton Foods’ quarter rise in pre-tax profits, posted in its interim trading report for the 28 weeks to 17 July, will underpin further international expansion.

The UK-based meat company has gradually moved to reduce its economic dependence on one economy and expansion across Asia-Pacific and Europe is starting to bear fruit. Pre-tax profits for the 28 weeks to 17 July came to £16.7m, a 26.7% rise from last year.

International highlights for the business include the roll-out of a new facility in Melbourne, Australia, a joint venture signed with Sonae, Portugal, and an extension to supply fresh pizzas in Sweden.

Our co-operation with Sonae in Portugal, the market leader there, is actually a fine example of a market that is very competitive, a market that is focused on cost and efficiency and we have proved to them ​[Sonae] what efficiency we can bring to the market,​” said Robert Watson, chief executive of Hilton Foods Group.

We’re very excited about Portugal and it’s a fine example of how we can enter a foreign market quickly and have a positive impact.​”

Foreign exchange glee

A high proportion of Hilton Food Group’s sales​ are earned in currencies other than sterling and its results had been “favourably impacted​” by the weakness of the pound relative to other currencies, according to the company. The euro, Danish krone and Swedish krona all strengthened by at least 6%.

Hilton Foods​ posted operating profits of £18.1m for Western Europe, helped by an 8.6% rise in turnover, thanks to strong volume growth supported by good foreign exchange rates. Sweden, in particular, saw above-average turnover, thanks to the high price of pork.

On the results, Nigel Majewski, chief financial officer at Hilton Foods Group, said: “We would characterise these results as good underlying growth that has been enhanced by a very successful start-up in Australia, where we have boosted our service fee income by £900,000. On top of that we’ve successfully lowered start-up costs in Australia and the UK and it leaves us well placed to complete the year positively.​”

Majewski and Watson were tight-lipped on plans for further geographic expansion, but said the strong performance meant the company was looking at other markets across Europe and Asia-Pacific to enter.

Go to Meat Trades Journal, our sister site, which has covered Hilton Foods’ financial results​ in full.

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