A successful launch of meat trading business in the UK has contributed to a surge in profits at Hilton Food Group.

Hilton Food Solutions, which launched at the beginning of 2016, was a logical development given the group’s procurement strengths and extensive global contacts in the meat trade, CEO Robert Watson told The Grocer.

Despite being a new venture and only making up a small part of the wider group, the business helped in part drive Hilton operating profits 25.7% higher to £17.3m in the six months to 17 July.

Hilton Food Solutions was established after the group took a majority stake in an existing business that was already trading, Watson said.

It supplies customers in manufacturing and food service rather than the big retailers, such as Tesco, with which Hilton traditionally deals.

“It is not a big business and is in its early days,” Watson added. “Hopefully it will develop in a positive direction for us but it is not a game changer by any means.”

The horse meat scandal dealt the meat trading industry a blow in 2013 but Watson said Hilton’s expertise and relationships would bring confidence to the market.

“We have a very good understanding of the supply chain around a lot of markets – as well as strong relationships with lots of suppliers and customers – so naturally us being involved will give a lot of confidence to the trading process,” he added. “We will bring a really strong offer to the marketplace.”

Hilton reported a positive first-half performance all round, with revenues up 9.1% to £631.9m as volumes jumped 4.5% to 133,706 tonnes.

The growth of its Tesco business in the UK was the main driver in the “encouraging” rise in volumes, with trading in Ireland and Holland also contributing, as well as continued product innovation and range extension.

Favourable shifts in exchange rates played a part in boosting the top line as other currencies the group trades in across Europe strengthening against the pound in the first half, including the euro, Danish krone and Swedish krona.

The higher volumes and favourable currency translation were also mainly responsible for the big jump in profitability, with pre-tax profits up 26.7% to £13.2m.

“We have made strategic progress particularly in terms of geographic expansion with the roll out in Australia and the early stages of a partnership with Sonae in Portugal,” Waston said.

“We will continue with our strategy of furthering the geographic reach of the Hilton model exploring a range of new expansion opportunities.”

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