Hilton Food Group interim results indicate positive growth
Hilton Food Group has reported continued year-on-year sales growth driven by higher raw material prices and volume growth, partly attributed to full year volumes from foodservice catering butcher Fairfax Meadow.
The company’s preliminary results for the 52 weeks ending 1st January 2023 stated: “We have demonstrated strength and resilience in our core meat category with award winning products across the categories in which we operate. We continue to remain focused on responding to consumer needs in our development of new products and leveraging our industry leading technology to support our core protein business.”
Key points from the company’s financial overview include:
- Group revenue up 16.5% to £3.8 billion (2021: £3.3 billion), underpinned by contribution from newly acquired businesses, first full year of trading in New Zealand and inflationary impact
- Volume growth of 4.3% to 513,816 tonnes (2021: 492,588 tonnes)
- Adjusted operating profit down 3.3% to £71.1 million (2021: £73.6 million)
- IFRS operating profit down 14.8% to £54 million (2021: £63.4 million) after exceptional items of £11.9 million, relating predominantly to 2021 fire at Belgium site.
Despite the current global instability, the company stated that it has maintained its focus on sustainability. Its strategy is to build a platform to create sustainable value over the long-term part of which is its Sustainable Protein Plan, a blueprint for social and environmental progress across three pillars: product, planet and people.
Through partnerships, Hilton Foods is aiming to help create a more circular and sustainable food system that “provides healthy and affordable proteins for consumers who have seen the cost of cooking double, and who worry about the health of their families and the future of our planet.”
Within the report, the Group also details its work to decarbonise cattle, deliver zero emission factories and eliminate deforestation. Its investment in the meat technology business Cellular Agriculture, the company argues, is helping Hilton become a leader in the emerging market for cultured meat.
In 2021, the Group acquired food service business Fairfax Meadow and the vegan/vegetarian business Dalco. Across its European branch of the business, volumes increased by 4.1% attributable to the newly acquired businesses and there was good growth in convenience volumes in Central Europe and at Dalco.
Sales grew by 13.4% due to raw material price inflation and the higher volumes.
In Australia the Group operates facilities in Bunbury, Western Australia, Melbourne, Victoria and Brisbane, Queensland. A new food park facility in New Zealand opened in July 2021 to supply beef, lamb, pork, chicken, seafood and added-value products.
Volumes for the year increased by 4.7% through the full year of trading at the New Zealand facility. Sales increased by 21.2% driven by inflation in Australia and the new facility in New Zealand. Adjusted operating profit increased by 19.4% given the higher volumes as well as benefitting from recovery of increased interest costs. Operating margins were steady at 1.7% (2021: 1.7%) and the operating profit margin per kg increased to 16.1p (2021: 14.1p).
The Group has also announced the appointment of Steve Murrells CBE as Group Chief Executive Officer.
Murrells will assume the role from 3rd July 2023, and will join the Group Board at the same time. He succeeds Philip Heffer, who has decided to stand down from the Board and step back from running the company after almost 30 years with Hilton Foods, including the past five years as Group CEO. Heffer will remain with the business as co-founder and advisor to the Hilton Foods Board.
Steve Murrells’ connection to the business dates back almost 30 years, when he was one of Hilton Foods’ first customers and commercial partners at Tesco. After serving as CEO of Tulip Ltd from 2009 to 2012, Steve was appointed as CEO of Co-op Food, where he oversaw a turnaround in performance and repositioned the business as a leading convenience player. This was followed by five years as Group CEO of Co-op Group, leading the business through the Covid-19 pandemic, repositioning the Group’s Insurance and Probate businesses, and growing its online capabilities.
Murrells was appointed Commander of the Order of the British Empire (CBE) in the 2022 New Year Honours for services to the food supply chain. He also currently acts as an advisor to Noble Foods Ltd.