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Hilton Food Group shares soar as strong festive trading helps maintain annual food supplier guidance
- The packaging company lowered its profit expectations in September and November
- Hilton said it had made “encouraging” progress in passing on cost increases
- His shares were the second highest riser on the FTSE 250 index on Thursday
Hilton Food Group shares rose Thursday after the food packaging industry said its full-year results were expected to be in line with management forecasts after a “pleasant performance” in the run-up to Christmas.
The Huntingdon-based company, which supplies meat to Tesco supermarkets, lowered its profit expectations in September, in part because of rising interest rates and start-up costs associated with its New Zealand food park.
Two months later it issued another profit warning due to pressure on the UK fishing business and a more challenging economic situation.
Delicious: Huntingdon-based Hilton Food Group supplies meat to Tesco supermarkets
But over the past two months, the company said it had made “encouraging” progress in passing on cost increases to customers and was experiencing a robust holiday season in the British Isles.
Bosses now expect full-year results for the 12 months ended January 1 to be in line with revised guidance set out in November.
Hilton Food Group shares reflected this upbeat assessment on Thursday, rising 12.8 percent to 618p, making it the FTSE 250 Index’s second best performer after online clothing retailer ASOS.
Over the past year, the company has seen continued sales growth driven by strong sales from its fresh food business in Central Europe and impressive sales growth at its three sites in Australia.
The sale also benefited from the Auckland food park’s first full year of business, as well as the acquisition of smoked salmon producer Foppen.
The acquisition of the Dutch group, financed primarily through a £75 million share increase, helped Hilton enter the US market, where Foppen’s products are sold in Costco stores.
Just before closing the purchase, the company also bought Fairfax Meadow, a major supplier to the hospitality and travel industries, and agreed to buy the remaining interest it did not own in plant-based food manufacturer Dalco.
Aside from acquisitions, it has formed new partnerships with Australian automation company Agito and technology company Cellular Agriculture.
In addition, three weeks ago it announced a partnership with Singapore-based Country Foods to expand its business into Southeast Asia.
Hilton Foods said it “continues to explore broader geographic expansion and growth opportunities in our existing markets as we deliver on our strategy as the protein partner of choice.”
Despite the broader economic uncertainty, the company has expressed an optimistic outlook for the year ahead, in part due to recent trading results, the diversity of its products and the quality of its facilities.
Established in 1994 as a central beef and lamb meatpacking facility, the company supplies food to 19 markets, mainly in Europe, and its most well-known customers include Waitrose and Woolworths, Australia’s largest supermarket chain.