Fairfax Meadow butchers

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Meat and fish supplier Hilton Food Group has reported a surge in revenues and profits as it extended its reach across protein categories around the world.

The group, which supplies Tesco in the UK, increased sales 19% to £3.3bn in the 52 weeks to 2 January, with volumes up 5% year on year.

Adjusted pre-tax profits rose 10% to £67.2m and EBITDA increased 9.9% to £139m - although exceptional costs of £8.2m associated with acquisitions and a fire at a Belgian facility pushed down group pre-tax profits by 12.3% to £47.4m.

Hilton has expanded rapidly since floating in 2007 and now operates in 19 markets across Europe, Asia Pacific and North America.

In recent years, the group extended its reach from meat into fish with the acquisition of Icelandic Seachill in 2017.

It has continued on the acquisition trail in the past year, moving into the North American market for first time with the purchase of leading Dutch smoked salmon producer Foppen. It also launched into UK foodservice through the acquisition of Fairfax Meadow and entered new markets in Europe with a deal for vegetarian firm Dalco.

More than 75% of group volumes in 2021 were produced in countries outside the UK.

Chief executive Philip Heffer said 2021 had been a year of delivery and diversification.

“We have delivered another strong financial performance with volumes and revenue both growing, maintaining a trend of continuous volume growth every year since Hilton’s flotation in 2007,” he added.

“These results reflect an outstanding team effort as well as the power of our business model, which is rooted in the partnerships we have built with customers across Europe and Asia-Pacific.”

Heffer said Hilton was “well placed” to create long-term sustainable value, in spite of short-term challenges or market headwinds.

“While those headwinds persist, our model positions us well to provide nutritious, affordable, and increasingly sustainable protein at scale, fulfilling changing consumer demands.”

Chairman Robert Watson said that against the backdrop of a more challenging environment, with global uncertainties impacting supply chains and inflation, the Hilton board was confident of making further progress in 2022.

Hilton also announced in a separate statement it had appointed Matt Osborne as cheif financial officer. He will take on the role following the AGM on 24 May, replacing Nigel Majewski, who has served as CFO for 15 years.

Osborne joined Hilton from Greene King in 2018 as the group’s financial controller.

Despite the strong results, Hilton shares opened 0.5% lower at 1,216p this morning.

Morning update

Tobacco giant Imperial Brands said it had made “good progress” despite a weaker performance in Europe offsetting growth in other regions.

A first-half trading update revealed adjusted operating profits are expected to grow by about 2% as losses for its next-generation products (NGP) reduced.

Group net revenues in the first six months are forecast to be broadly flat compared with last year, reflecting a weaker tobacco performance in Europe.

However, Imperial, which makes the JPS, L&B and Winston brands, said market share gain for cigarettes in the US, UK and Australia more than offset declines in Germany and Spain.

The group noted a return to pre-Covid purchasing patterns as Northern Europeans resumed international travel.

It also expected price increases during the latter part of the first half to support stronger revenue performance in the final six months of the financial years.

Imperial, which previously announced it was exiting Russia, said it was continuing negotiations with a local third party for an “orderly transfer” of its Russian assets and operations as a going concern.

“Meanwhile, we also continue to support our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine,” the group added.

Investors were cheered by the Imperial update, with shares rising 2.2% to 1,652p this morning.

The reopening of markets at home and overseas has helped premium spirits group Distil end the year strongly.

The RedLeg spiced rum, Blackwoods gin and Blavod vodka maker reported a 32% jump in revenues and a 38% rise in volumes in its fourth quarter ended 31 March.

Executive chairman Don Goulding said in a trading update that the source of business in terms of territories and trade channels continued to expand as markets reopened following Covid lockdowns.

It resulted in export revenue growth of 70% year on year, with domestic sales up 29% and overall business tracking ahead of pre-pandemic levels.

RedLeg Spiced Rum remained the main driver of growth, with sales increasing 37%, while Blackwoods Gin grew ahead of the market, with volumes up 5%. Blavod Black Vodka licenced volumes increased 260% as duty-free outlets gradually reopened.

Distil also confirmed it does not source, directly or indirectly, any packaging, ingredients or production from either Ukraine or Russia.

“We previously exported our brands to these markets and whilst they were in growth it was off a low base, and they accounted for relatively small volumes,” Goulding added.

“Their closure has had no material impact on our results or plans.

“Our team has been raising funds for the Red Cross Ukraine Crisis Appeal, and we have pledged to match those funds.”

The FTSE 100 opened down 0.4% to 7,583.92pts yesterday.

Deliveroo, HelloFresh and Delivery Hero were among the early losers, down 2.7% to 121.9p, 2.3% to €44.94 and 2.2% to €47.15 respectively.

Yesterday in the City

The FTSE 100 remained in the black yesterday despite the threat of more Russian sanctions looming over it, with the index up 0.7% to 7,613.72pts.

Tesco and Sainsbury’s shares came under a bit of pressure after fellow listed supermarket Morrisons warned of pressure on profits under the current volatile conditions, with Tesco down 0.8% to 273.8p and Sainsbury’s down 0.7% to 245.5p.

Conversely, discounter B&M European Value Retail rose 2.5% to 561.6p, while Ocado climbed 1.3% to 1,228p.

Finsbury Food Group led the way for grocery risers, up 7.9% to 75p, with HelloFresh up 4.8% to €46.50 and Delivery Hero up 4.1% to €48.12, and Science in Sport rising 4.2% to 56.5p.

It was also a good day for Hotel Chocolat Group, up 4% to 440p, Deliveroo, up 3% to 125.3p, and AG Barr, up 1.9% to 540p.

Fallers included McColl’s Retail Group, up 12.3% to 2.1p, Associated British Foods, down 1.4% to 1,643p, and Hilton Food Group, down 1.8% to 1,222p.