Hilton Foods battles horsemeat and high prices for small profit

10th Sep 2013 08:30

The horsemeat scandal in the UK and higher prices of meat generally meant Hilton Foods had to fight hard for a slight increase in interim profits. Even after £0.5m of start-up costs from a new joint venture in Australia, the meat packing group posted a 4% gain in post-tax profits to £10m in the 28 weeks to July 14th, on turnover of £593.8m, up 9.4%.Revenue growth reflected the passing on of increased raw material prices and currency exchange gains, as the higher prices held volume growth back to only 0.7%. In August Hilton and JV partner Woolworth's began construction of a new purpose-built retail packing facility in Victoria and conversion of an existing Woolworth's facility in Bunbury, Western Australia.Chief Executive Robert Watson suggested further geographic expansion was on the cards and it continued to look for new opportunities for this through new product development and extension of its product range.Management said they expected pressure from tight consumer expenditure and high meat prices to continue in Europe over the remainder of 2013 and that Hilton will incur further start-up costs in Australia in relation to the recently announced facility in Victoria. The board added that it expected profits for the full year to be in line with its expectations after factoring in the impact of the increased Australian start-up costs. Shares in Hilton Foods were unmoved at 436.13p at 08:49 on Tuesday.OH