Food packaging business Hilton Food Group plc (LON: HFG) reported performance ‘in line with Board expectations’ as UK and Australian markets yielded good progress.
However, the European market proved challenging for Hilton Food Group. Elsewhere in the food sector, Bakkavor Group Plc (LON: BAKK) and Avangardco Investments Public Limited (LON: AVGR) also faced challenges.
Hilton stated that despite progress relating to the Fresh Food Factory, volumes remained ‘challenged’ in Central Europe. However, the Company has achieved growth in turnover alongside strategic progress in Western Europe and the UK, owing to an agreement with Tesco (LON: TSCO).
In its statement, the Company said,
“In Western Europe we have made good progress in a number of markets. In the UK, we made significant strategic progress with an agreement to pack 100% of Tesco’s red meat.Turnover in the UK has therefore continued to grow driven predominantly by higher Tesco red meat volumes as well as increased Seachill volumes, where we have benefitted this year from the new business wins. Volumes remain relatively flat in both Sweden and Denmark, where we have recently started to sell pizzas. In Holland, although red meat volumes were lower than last year, we have benefitted from vegetarian and vegan products produced by Dalco, with listings now secured with a number of our Retail customers. In addition, we have extended the range of products with existing Dalco customers. The joint venture in Portugal is continuing to show good progress.”
The greatest progress, though, was witnessed in its Australian operations. The Company stated that it saw ‘double-digit volume growth’ from its business, which covered its joint venture in Bunbury and Victoria, and its Queensland site.
The Group concluded by stating that its financial position remains strong and that it continued to explore investment opportunities.
Following the update, the Company’s shares have rallied 1.78% or 18.00p to 1,028.00p per share 31/10/19 15:15 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Hilton Food Group stock, their p/e ratio is 24.02 and their dividend yield stands at 2.09%.
