Hilton Food Group (LON:HFG) announced Monday they have agreed to extend for 15 years the meat supply agreement with Australian supermarket Woolworths.
The supply, by Hilton Foods Australia, will include packaged and value-added meat products. It is expected to start operations in the plants of Bunbury and Truganina from the 1st of July this year.
These plants were previously handled by Woolworths Meats Co Pty, a joint venture between the two companies. The current assets belong to Woolworths. However, after two years the Hilton group will buy the relevant plant assets for an estimate value of AU$85 million, in cash or equity consideration.
The meat giant has been working closely with the Aussie supermarket for five years now. With this new long-term contract they are looking to enhance the relationship by delivering quality, innovative meat products and “convenient and affordable protein choices” for Woolworths’ customers.
“The long term contract between us displays the mutual trust we have in our partnership and Hilton looks forward to working with the Woolworths team to strengthen further our world class meat offer in Australia,” said Robert Watson, chief executive of Hilton.
Earlier this month, the group announced a positive trading outlook in line with their expectations. They showed supported growth around Western European markets, as well as a high turnover in the UK and Ireland. And in the three months to Christmas, sales were up in Scandinavia, especially in Sweden with their fresh pizzas product.
Moreover, the acquisition of Icelandic Group UK, made public last November, was completed this month for £80.8 million.
As for Woolworths, the supermarket announced last week their profits and first-half earnings surged by 38 percent beating their main Australian rival Coles. Net profit after tax rose to AU $969 million for the last quarter in 2017.
Shares of the Hilton Food Group were up 0.24 percent, trading at 382p, as of 12:00 (GMT).