Hilton Food Group expects to grow operating profit margins back to 3% despite announcing a fall in margins in its latest results.
Tesco’s meat packer announced a year-on-year dip in margins from 2.4% last year, to 2.3% in the 28 weeks to 14 July this week.
It blamed the fall on costs associated with a joint venture that invovled taking over the operation of Woolworths’ site in Perth, Australia as well as an increase in raw material prices.
Margins would not increase immediately, as Hilton would incur further costs in setting up a planned meat plant near Melbourne, which is scheduled to open in 2015, Hilton said. However, CEO Robert Watson added: “When the timing’s right, it will happen.”
Hilton posted a 1.2% increase in operating profit, to £13.4m on turnover up 9.4%, to £593.8m, in its results this week. Sales volumes increased by 0.7% over the period.