Top story

Hilton Food Group has acquired the entire share capital of UK-based foodservice meat supplier Fairfax Meadow Europe from Argent Food Group for £23.8m.

Hilton said the acquisition will improve its access to the out-of-home channel as it continues to recover after the relaxation of Covid restrictions and will contribute further growth to the business.

Fairfax Meadow was established over 40 years ago and supplies some of the largest businesses in the UK hospitality and travel sector operating from four meat processing and packing facilities in Derby, Milton Keynes, North London and Southampton.

Hilton said the business is now recovering strongly following the impact of Covid-19, as the UK hospitality and travel sectors fully reopen.

Fairfax generated an EBITDA loss of £2.3m in the year ended 31 December 2020, after adjusting for exceptional items and reflecting the significant impact of Covid, and an EBITDA profit of £4.4m in the year ended 31st December 2019.

Hilton has paid cash consideration of £23.8m, taking into account adjustments for net debt and normalised working capital. The acquisition has been funded from the group’s debt facilities.

“This development into the foodservice sector will ensure that Hilton is the protein partner of choice for customers across more mealtimes and meal occasions,” Hilton stated.

Hilton’s CEO, Philip Heffer, commented: “This transaction is all about growth. With its award-winning reputation, Fairfax Meadow represents a great opportunity for Hilton to expand into an adjacent and growing foodservice sector in the UK. It is another step towards our goal of becoming the protein partner of choice for every meal occasion - offering high quality, affordable, and rigorously sourced proteins for customers and consumers here in the UK and across the world.

“We look forward to leveraging Hilton’s expertise, reputation and investment to grow and expand the Fairfax business, and we plan to offer Hilton’s broad product range, including sous vide, seafood and alternative protein products, to Fairfax’s customers.”

Fairfax Meadow MD, Penny Tomlinson, added: “Fairfax Meadow is built on a foundation of longstanding, strong, customer and supplier relationships which we will continue to develop as we move forward together. Philip and the team at Hilton have followed our progress closely over the past few years and by joining forces now, we will have the right platform and investment for the next phase of Fairfax Meadow’s growth.

“With Hilton’s retail supply chain expertise, quality management and leading sustainability standards, together with our longstanding reputation for butchery and foodservice excellence, this is a fantastic opportunity. I am excited for the next stage of our development as I continue to lead Fairfax Meadow within the Hilton family and to seeing the positive impact for our teams, our customers and our suppliers.”

Meanwhile, Hilton has updated the market on trading for the period from 19 July to date, stating that its performance has been in line with expectations.

Growth has continued, driven predominantly by the successful rollout of our growth strategy in Australia and Asia Pacific, as well as through continued expansion across a range of protein categories.

In Australia, it is are successfully operating as a unified business covering the sites of Bunbury (Western Australia), Melbourne (Victoria) and Brisbane (Queensland).

In Europe, is has continued to make good progress in a number of markets with overall regional revenue, as expected, relatively flat for the quarter, reflecting the increase in the number of consumers eating out following the re-opening of food service.

However, it has seen growth in the slow cooked business in the UK, as well as in Central Europe, with continued volume growth in fresh food across both Tesco and Zabka.

Meanwhile, it continues to expand across a wider range of protein categories: in Denmark it is packing chicken and vegetable protein products, and in Holland it purchased the remaining 50% of Dalco.

Trading subsidiary Hilton Food Solutions has also performed well, due to the re-opening of food service, as well as through successful trading with European customers.

“The group’s financial position remains strong and we continue to explore opportunities to invest in and to grow the business in both domestic and overseas markets,” it stated.

Hilton shares are up 0.5% to 1,163.3p so far this morning.

Morning update

The John Lewis Partnership has announcing the signing a new green £420m five-year revolving credit facility linked to environmental targets.

The facility is provided by seven banks and replaces existing facilities of £500m, which are due to expire at the end of 2022.

Under the terms of the new agreement, the interest rate the group pays on the facility will vary depending on whether it achieves three environmental targets over five years related to reducing carbon emissions, reducing food waste and moving away from fossil fuels.

These targets contribute to the Partnership’s existing sustainability commitments of targeting net zero carbon emissions by 2035, a 50% reduction in food waste across Waitrose by 2030 and the end use of fossil fuels across the company’s transport fleet by 2030.

Additionally, the John Lewis Partnership has recently joined leading businesses in signing up to the Science Based Targets Initiative Business Ambition for 1.5°C as well as the UN Race to Zero campaign.

Bérangère Michel, executive director for Finance at the John Lewis Partnership said: “This is an important agreement for the Partnership. It is critical for businesses to align financial strategy with sustainability goals in order to address climate change. I am pleased that the Partnership is living up to its sustainability commitments and its purpose by making this very important step, ahead of the COP26 summit.”

“This credit facility also reinforces the strong relationships we have with our banking partners, who continue to support the Partnership and our plans for the years ahead.”

Elsewhere, Premier Foods has announced a new ESG strategy with series of major sustainability commitments.

Its new “Enriching Life Plan” strategy will focus on three ares; product, planet and people.

Under product, it has committed to more than doubling the sales of products that meet high nutrition standards by 2030 and has pledged to achieve £250m of sales from plant-based products by the same date.

For planet, it aims to reduce its scope 1 and 2 carbon emissions by 42% by 2030 and achieve net zero for direct emissions by 2040. It will also introduce science-based targets to measure both direct and indirect emissions and halve food waste by 2030.

Finally, for people it has committed to a gender balance for senior management population by 2030 and to donate 1 million meals to those in food poverty a year by 2030.

Performance against these targets will be regularly monitored and reviewed by the Group’s ESG governance committee and reported on annually. This committee is chaired by the CEO and status updates on each of the three pillars are provided to the board regularly.

CEO Alex Whitehouse commented: “”Over the last few years, we have made some very good progress against our previous ESG strategy and we are proud of the achievements that we have made so far. We have evolved rapidly as a business over the last eighteen months and we now have ambitions which are much bigger and bolder. So today we are launching a new ESG strategy which reflects this ambition. We firmly believe that we should take responsibility for helping to support a healthier planet, for delivering new product options to help consumers eat more healthily and in caring for our colleagues and communities.”

“Therefore, we are today laying out a comprehensive set of new commitments. We will leverage our proven branded growth model and insight driven innovation capabilities to develop and provide consumers with an increasing number of healthy options including a series of plant-based products such as Sharwood’s Vegan cooking sauces and Mr Kipling 30% less sugar cake slices. This strategy will be instrumental as we target the delivery of £250m sales from plant-based products by 2030 and double the sales of products that meet high nutritional standards.”

On the markets this morning, the FTSE 100 is down 0.3% to 7,230.5pts.

Risers include Naked Wines, up 11.9% to 734p, Nichols, up 1.6% to 1,158p and Devro, up 1.2% to 215p.

Fallers include Virgin Wines, down 3.9% to 185p, Just Eat Takeaway, down 2.5% to 5,197p, Pets at Home, down 2.3% to 478p and THG, down 2.2% to 219.2p. 

Yesterday in the City

The FTSE closed the day yesterday broadly flat, edging down less than 0.1% to 7,249.4pts.

AB InBev closed the day up 10.3% to €54.46 after posting strong than expected third quarter figures that propelled sales back above pre-Covid levels.

C&C Group also jumped 6% to 264.6p after announcing its own rebound in trading following the reopening of the on-trade sector.

DS Smith was up 2.1% to 387.6p as it reported a continued rise in its corrugated box volumes.

Elsewhere, THG continued to fall, dropping a further 5.7% back to a new low of 224p.

Other fallers included THG, down 5.7% to 224p, Just Eat, down 3.9% to 5,331p, Nichols, down 3% to 1,140p, McColl’s Retail Group, down 2.3% to 19.5p, Sainsbury’s, down 2.3% to 299.6p and AG Barr, down 2.2% to 498p.

Risers included Bakkavor, up 4.2% to 129.4p, Glanbia, up 2.2% to €14.05, McBride, up 2% to 72p, Coca Cola HBC, up 1.9% to 2,519p, Hotel Chocolat, up 1.7% to 525p, PayPoint, up 1.6% to 699p and Greggs, up 1.6% to 3,139p.