TIDMHFG
RNS Number : 0779O
Hilton Food Group PLC
13 September 2011
Hilton Food Group plc
Interim results for the 28 weeks to 17 July 2011
Another period of strong performance
Hilton Food Group plc, the leading specialist retail meat
packing business supplying major international food retailers in
Europe, is pleased to announce its interim results for the 28 weeks
to 17 July 2011.
28 weeks
28 weeks to 52 weeks
to 18 July Percentage to
17 July 2011 2010 growth 2 Jan 2011
--------------------- -------------- ---------- ----------- ------------
Volume (tonnes) 105,305 102,688 2.5% 197,170
--------------------- -------------- ---------- ----------- ------------
Turnover GBP496.2m GBP449.9m 10.3% GBP864.2m
--------------------- -------------- ---------- ----------- ------------
Operating profit GBP13.2m GBP12.2m 8.6% GBP23.3m
--------------------- -------------- ---------- ----------- ------------
Profit before tax GBP12.6m GBP11.5m 8.8% GBP22.2m
--------------------- -------------- ---------- ----------- ------------
Cash generated from GBP22.8m GBP20.8m 9.6% GBP34.1m
operations
--------------------- -------------- ---------- ----------- ------------
Net debt GBP24.8m GBP16.0m GBP18.0m
--------------------- -------------- ---------- ----------- ------------
Earnings per share 12.8p 11.8p 8.5% 22.6p
--------------------- -------------- ---------- ----------- ------------
Interim dividend 3.1p 2.8p 10.7% 10.2p
to be paid in
December 2011
--------------------- -------------- ---------- ----------- ------------
-- Hilton has continued to benefit from its geographically
diversified business model; 74% of the Group's revenues are now
earned outside the UK
-- The Group recorded a resilient overall performance, despite
continuing pressure on consumer spending, with earnings growth
showing good momentum
-- Higher meat prices restrained volumes during the period but
contributed to strong turnover growth
-- Hilton's newest facility in Denmark commenced production on
30 March 2011, with volumes now building up rapidly
-- Strong balance sheet and cash generation enabled the Group to
fund continuing investment in its production facilities. Net debt
increased as expected from GBP18.0m to GBP24.8m, reflecting the
investment in the new Danish plant
Commenting, Robert Watson, Chief Executive of Hilton Food Group
plc said:
"In these difficult times, Hilton continued to benefit from its
geographically diversified business model. Despite the economic
environment across Europe and rising raw material meat prices,
trading over the first 28 weeks of 2011 has been strong. We have
achieved further growth in turnover and profits, while continuing
to actively support our customers' growth in very competitive
markets".
Enquiries:
Hilton Food Group - Robert Watson, Tel: +44 (0) 1480 387 214
Nigel Majewski
Citigate Dewe Rogerson - Tom Baldock, Tel: +44 (0) 207 638 9571
Clare Simonds
Financial review
The Group is presenting its interim results for the 28 weeks to
17 July 2011, together with comparative information for the 28
weeks to 18 July 2010 and the 52 weeks to 2 January 2011. The
interim results of the Group are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU).
Underlying trading performance has remained strong, despite
challenging economic conditions across a number of our markets.
Turnover rose by over 10% to GBP496.2m, as compared to GBP449.9m in
the corresponding 28 week period last year. The increase reflected
the recovery of higher raw material costs and a favourable impact
from currency translation, which accounted for 2% of the turnover
increase.
Volumes grew overall by under 3%, despite the impact of higher
raw material meat prices and continuing downward pressure on
consumer spending. Further details of turnover and volume growth by
segment are detailed in the Review of operations, below.
The operating profit margin was 2.7%, unchanged from that in the
first 28 weeks of 2010.
Operating profit for the first 28 weeks of 2011, at GBP13.2m,
was GBP1.0m (9%) ahead of the operating profit of GBP12.2m earned
in the corresponding period in 2010. Operating profit benefited
from improved performances in some markets and the recovery of
higher raw material prices.
Net finance costs remained stable, at GBP0.6m (2010: GBP0.6m),
reflecting positive cash generation to fund the higher level of
investment and continuing low sterling and euro inter bank offered
rates. Interest cover was 21 times (20 times in the corresponding
period last year).
Profit before taxation was GBP12.6m (2010: GBP11.5m), reflecting
the increase in operating profit. The tax charge for the period was
GBP3.0m (2010: GBP2.7m), representing a similar effective
underlying rate of tax, as compared with last year, of 23.6% (2010:
23.5%).
Basic earnings per share in the first 28 weeks were 12.8p (2010:
11.8p) an increase of 9%.
The Directors propose an interim dividend of 3.1p pence per
share, amounting to approximately GBP2.16m (compared with an
interim dividend of 2.8 pence per share in 2010 amounting to
GBP1.95m) to be paid on 2 December 2011, to shareholders on the
register at close of business on 4 November 2011.
The Group generated GBP22.8m of cash from operations during the
period (2010: GBP20.8m) which has enabled the Group to finance the
investment in Denmark with a manageable short term increase in the
level of net debt outstanding, whilst undertaking continuing
investment to improve and develop its other production facilities.
Group borrowings, net of cash balances of GBP25.4m, were GBP24.8m
at 17 July 2011 (GBP18.0m at 2 January 2011).
Capital expenditure in the period, at GBP18.9m, was much higher
than the level in the corresponding period last year (2010:
GBP6.8m) as it included the additional investment of GBP12.1m in
Denmark and GBP6.8m of expenditure incurred to mechanise further
our processing activities as well as on ongoing efficiency
improvements and equipment modernisation at Hilton's other five
production sites.
The principal risks and uncertainties facing the Group's
businesses
The Group has a sound established structure and set of processes
for identifying and mitigating the key risks the business faces.
The most significant risks and uncertainties faced by the Group,
together with the Group's risk management process are detailed in
the Business review on pages 16 and 17 of the Hilton Food Group plc
annual report and financial statements 2010. The principal risks
and uncertainties identified in that report, which are unchanged,
were:
-- The Group's growth potential is dependent on the success of its
customers and the future growth of their packed meat sales;
-- The Group is dependent on a small number of customers who exercise
significant buying power and influence;
-- The Group's business is reliant on a number of key personnel and
its ability to manage growth successfully;
-- The Group's business is dependent on maintaining a wide and
flexible global meat supply base;
-- Outbreaks of disease and feed contamination affecting livestock
and media concerns can impact the Group's sales; and
-- The Group's business is dependent on the state of the economy and
levels of consumer spending in the countries in which it operates.
The risks and uncertainties set out above had no material
adverse impact on the results for the 28 weeks to 17 July 2011,
beyond the continuing effects of the difficult economic environment
across Europe on consumer spending patterns, as identified in this
interim management report. These risks and uncertainties are
expected to remain unchanged with respect to the last 24 weeks of
the 2011 financial year, over which the macroeconomic environment
across Europe is expected to remain little changed, with the pace
of any recovery from recent recessions being potentially both muted
and unpredictable in some of the countries in which we operate.
Related parties
Transactions with related parties, which comprise principally
purchases of raw material meat under normal market conditions, are
covered in note 11 to the condensed consolidated interim financial
information. The nature of these transactions is unchanged from
previous years.
Forward looking information
This interim management report contains certain forward looking
statements. These statements are inevitably subject to risk factors
associated with, amongst other things, economic, political and
business developments which may occur from time to time across the
countries in which the Group operates. It is believed that the
expectations reflected in these statements are reasonable, but all
forward looking statements and forecasts involve risk and
uncertainty, quite simply because they relate to events and depend
on circumstances that will occur in the future.
Going concern
The Group's borrowings are detailed in note 9 to the condensed
consolidated interim financial informationand the principal banking
facilities which support the Group's existing and contracted new
business are committed, with no renewal required until 2015. The
Group is in compliance with all its banking covenants. The
financial position of the Group including its cash flows, liquidity
position and borrowings are described above, with its business
activities and the factors likely to affect its future development,
performance and position being covered in the Review of operations,
below.
As at the date of this report, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
business for the foreseeable future. Accordingly, the condensed
consolidated interim financial information has been prepared on a
going concern basis.
Review of operations
The Group has benefited over the recent difficult economic
period from the diversity of its geographical operations. In the
first 28 weeks of 2011 74% of our revenue was earned outside the
United Kingdom, with 76% of our total volume of meat packed outside
the UK. The broad spread of the Group's businesses across
Continental Europe represents a significant strength in terms of
reducing Hilton's dependence on any one European economy, during
the less certain and more unpredictable economic times experienced
over recent years.
Western Europe
Operating profit of GBP12.1m (2010: GBP10.9m) on turnover of
GBP452.2m (2010: GBP408.1m)
Further turnover and volume growth was achieved in Western
Europe, with our customers continuing to make good progress. Volume
growth was 2.2%, with turnover growth of 10.8%, the latter
reflecting increases in raw material meat prices. This progress was
achieved despite a macroeconomic environment which has remained
challenging, with consumer spending remaining under pressure in
some of the countries in which we operate. The new facility for
Coop Danmark came on stream in late March 2011 and a rapid volume
build up is currently in progress. The automated store order
picking facility which we are installing as an additional service
in Denmark is on schedule.
Hilton views product and packaging development and extending the
range of products supplied to its customers as a key strategy for
continuing to drive our business forward. The key product launches
made in recent years have all continued to perform well and the
first 28 weeks of 2011 saw the launch of an innovative new
packaging range in Holland.
Central Europe
Operating profit of GBP1.1m (2010: GBP1.3m) on turnover of
GBP44.0m (2010: GBP41.8m)
Central Europe is a multi-customer business where products are
supplied to Ahold stores in the Czech Republic and Slovakia, to
Tesco stores in the Czech Republic, Hungary, Poland and Slovakia
and to Rimi stores in Latvia, Lithuania and Estonia. The business
has expanded rapidly in recent years and it achieved further growth
in the first 28 weeks of 2011, despite very competitive markets.
Overall volume growth was just under 5%, with turnover growth of
5.3%. Recent capital expenditure, including new robotics at our
warehouse facilities, has bedded in well and leaves us well placed
to manage growth for each of our customers in the region.
Investment in our facilities
Hilton continues to invest in order to maintain all its
facilities at the state of the art levels required to service its
customers' growth, to progressively extend the range of products
supplied to those customers, deliver first class service levels and
continuously increase production efficiency. Such investment
ensures that we can achieve low unit costs and competitive selling
prices at increasingly high levels of production throughput.
Capital expenditure in the period was GBP18.9m (2010: GBP6.8m),
including expenditure of GBP12.1m on equipment for the new facility
in Denmark.
Employees
The further progress made by theGroup in the first 28 weeks of
2011 is once again attributable to the quality of the workforces
and management teams we have in place in each country in which we
operate and, on behalf of the Board, we would like to thank them
for their continuing commitment, enthusiasm, expertise and
support.
Future outlook
Despite continuing pressure on consumer expenditure in many
countries in which we operate, and with the economic backdrop
across Europe remaining both difficult and uncertain, we have
delivered further strong revenue growth, which has been achieved by
working closely and proactively with our customers. In such an
environment, consumers' drive for value is almost certain to
continue. As a business with modern, well invested and flexible
facilities, which has both a wide geographic spread and an
extensive global procurement reach, Hilton is well positioned,
should the current difficult economic environment, as expected,
persist.
We will continue to explore opportunities for further
geographical expansion and to expand our existing businesses
through new product development and range extension. Although the
remainder of 2011 will inevitably see further macroeconomic
challenges, the Board expects the Hilton to meet its expectations
for the 2011 financial year.
Sir David Naish DL Robert Watson OBE
Non-Executive Chairman Chief Executive
12 September 2011
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge:
(a) the attached condensed consolidated interim financial
information has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union;
(b) the Financial review and Review of operations which
constitute the 'interim management report' include a fair review of
the information required by DTR 4.2.7R (indication of important
events during the first 28 weeks and description of principal risks
and uncertainties for the remaining 24 weeks of the year); and
(c) the attached condensed consolidated interim financial
information includes a fair review of the information required by
DTR 4.2.8R (disclosure of related party transactions and any
changes therein).
The Directors of Hilton Food Group plc were listed in the Hilton
Food Group plc annual report and financial statements 2010 on pages
18 and 19. There have been no changes in Directors since 2 January
2011, a list of which is maintained on the Hilton Food Group plc
website at www.hiltonfoodgroupplc.com.
On behalf of the Board
Robert Watson OBE
Chief Executive
Nigel Majewski
Finance Director
Income statement
28 weeks 28 weeks
ended ended
17 July 2011 18 July 2010
Continuing operations Note GBP'000 GBP'000
Revenue 4 496,242 449,876
Cost of sales (430,454) (392,523)
Gross profit 65,788 57,353
Distribution costs (5,382) (5,754)
Administrative expenses (47,212) (39,447)
Operating profit 4 13,194 12,152
--------------------------------------- ----- -------------- --------------
Finance income 121 65
Finance costs (747) (670)
--------------------------------------- ----- -------------- --------------
Finance costs - net (626) (605)
--------------------------------------- ----- -------------- --------------
Profit before income tax 12,568 11,547
Income tax expense 5 (2,964) (2,717)
--------------------------------------- ----- -------------- --------------
Profit for the half year 9,604 8,830
--------------------------------------- ----- -------------- --------------
Attributable to:
Owners of the parent 8,930 8,202
Non-controlling interests 674 628
--------------------------------------- ----- -------------- --------------
9,604 8,830
--------------------------------------- ----- -------------- --------------
Earnings per share for profit
attributable to owners of the parent
- Basic (pence) 7 12.8 11.8
- Diluted (pence) 7 12.6 11.7
--------------------------------------- ----- -------------- --------------
Statement of comprehensive income
28 weeks 28 weeks
ended ended
17 July 2011 18 July 2010
GBP'000 GBP'000
---------------------------------------------- -------------- --------------
Profit for the half year 9,604 8,830
Other comprehensive income/(expense)
Currency translation differences 579 (797)
Other comprehensive income/(expense) for
the half year net of tax 579 (797)
---------------------------------------------- -------------- --------------
Total comprehensive income for the half year 10,183 8,033
---------------------------------------------- -------------- --------------
Total comprehensive income attributable to:
Owners of the parent 9,446 7,519
Non-controlling interests 737 514
---------------------------------------------- -------------- --------------
10,183 8,033
---------------------------------------------- -------------- --------------
The notes form an integral part of this condensed consolidated
interim financial information.
Balance sheet
17 July 18 July 2 January
2011 2010 2011
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 8 63,942 46,867 57,836
Intangible assets 8 2,135 2,123 2,063
Deferred income tax assets 1,007 565 1,021
67,084 49,555 60,920
------------------------------------- ----- --------- --------- ----------
Current assets
Inventories 23,160 19,537 20,346
Trade and other receivables 92,926 68,991 85,088
Cash and cash equivalents 25,401 24,419 26,141
------------------------------------- ----- --------- --------- ----------
141,487 112,947 131,575
------------------------------------- ----- --------- --------- ----------
Total assets 208,571 162,502 192,495
------------------------------------- ----- --------- --------- ----------
Equity
Share capital 10 6,978 6,966 6,966
Share premium 231 - -
Employee share schemes reserve 1,358 621 1,071
Foreign currency translation reserve 4,274 2,579 3,758
Retained earnings 39,287 29,925 35,518
Reverse acquisition reserve (31,700) (31,700) (31,700)
Merger reserve 919 919 919
------------------------------------- ----- --------- --------- ----------
Capital and reserves attributable to
owners of the parent 21,347 9,310 16,532
Non-controlling interests 2,876 2,032 2,613
------------------------------------- ----- --------- --------- ----------
Total equity 24,223 11,342 19,145
------------------------------------- ----- --------- --------- ----------
Liabilities
Non-current liabilities
Borrowings 9 41,491 33,473 35,359
Deferred income tax liabilities 1,039 1,637 1,037
42,530 35,110 36,396
------------------------------------- ----- --------- --------- ----------
Current liabilities
Borrowings 9 8,684 6,990 8,828
Trade and other payables 131,492 107,268 124,820
Current income tax liabilities 1,642 1,792 3,306
------------------------------------- ----- --------- --------- ----------
141,818 116,050 136,954
------------------------------------- ----- --------- --------- ----------
Total liabilities 184,348 151,160 173,350
------------------------------------- ----- --------- --------- ----------
Total equity and liabilities 208,571 162,502 192,495
------------------------------------- ----- --------- --------- ----------
The notes form an integral part of this condensed consolidated
interim financial information.
Statement of changes in equity
Attributable to owners of the parent
-------------------------------------
Employee Foreign
share currency Reverse
Share Share schemes translation Retained acquisition Merger Non-controlling Total
capital premium reserve reserve earnings reserve reserve Total interests equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Balance at 4
January 2010 6,966 - 377 3,262 26,432 (31,700) 919 6,256 2,300 8,556
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Comprehensive
income
Profit for the
half year - - - - 8,202 - - 8,202 628 8,830
Other
comprehensive
income
Currency
translation
differences - - - (683) - - - (683) (114) (797)
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Total
comprehensive
income - - - (683) 8,202 - - 7,519 514 8,033
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Transactions
with owners
Adjustment in
respect of
employee
share
schemes - - 244 - - - - 244 - 244
Dividends paid 6 - - - - (4,709) - - (4,709) (782) (5,491)
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Total
transactions
with owners - - 244 - (4,709) - - (4,465) (782) (5,247)
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Balance at 18
July 2010 6,966 - 621 2,579 29,925 (31,700) 919 9,310 2,032 11,342
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Balance at 3
January 2011 6,966 - 1,071 3,758 35,518 (31,700) 919 16,532 2,613 19,145
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Comprehensive
income
Profit for the
half year - - - - 8,930 - - 8,930 674 9,604
Other
comprehensive
income
Currency
translation
differences - - - 516 - - - 516 63 579
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Total
comprehensive
income - - - 516 8,930 - - 9,446 737 10,183
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Transactions
with owners
Issue of new
shares 12 231 - - - - - 243 - 243
Adjustment in
respect of
employee
share
schemes - - 287 - - - - 287 - 287
Dividends paid 6 - - - - (5,161) - - (5,161) (474) (5,635)
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Total
transactions
with owners 12 231 287 - (5,161) - - (4,631) (474) (5,105)
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
Balance at 17
July 2011 6,978 231 1,358 4,274 39,287 (31,700) 919 21,347 2,876 24,223
--------------- ----- -------- -------- --------- ------------ --------- ------------ -------- -------- ---------------- --------
The notes form an integral part of this condensed consolidated
interim financial information.
Cash flow statement
28 weeks 28 weeks
ended ended
17 July 18 July
2011 2010
GBP'000 GBP'000
---------------------------------------------------- ----------- -----------
Cash flows from operating activities
Cash generated from operations 22,772 20,775
Interest paid (747) (670)
Income tax paid (4,636) (3,095)
Net cash generated from operating activities 17,389 17,010
---------------------------------------------------- ----------- -----------
Cash flows from investing activities
Purchase of property, plant and equipment (18,308) (6,805)
Proceeds from sale of property, plant and equipment 14 25
Purchase of intangible assets (634) -
Interest received 121 65
---------------------------------------------------- ----------- -----------
Net cash used in investing activities (18,807) (6,715)
---------------------------------------------------- ----------- -----------
Cash flows from financing activities
Proceeds from borrowings 9,257 799
Repayments of borrowings (3,535) (4,660)
Issue of new shares 243 -
Dividends paid to company shareholders (5,161) (4,709)
Dividends paid to non-controlling interests (474) (782)
Net cash generated from/(used in) financing
activities 330 (9,352)
---------------------------------------------------- ----------- -----------
Net (decrease)/increase in cash, cash equivalents
and bank overdrafts (1,088) 943
Cash, cash equivalents and bank overdrafts at start
of period 26,141 24,141
Exchange gains/(losses) on cash, cash equivalents
and bank overdrafts 348 (665)
---------------------------------------------------- ----------- -----------
Cash, cash equivalents and bank overdrafts at end
of period 25,401 24,419
---------------------------------------------------- ----------- -----------
The notes form an integral part of this condensed consolidated
interim financial information.
Notes to the interim financial information
1 General information
Hilton Food Group plc ("the Company") and its subsidiaries
(together "the Group") is a specialist retail meat packing business
supplying major international food retailers in twelve European
countries.
The Company is a public limited liability company incorporated
and domiciled in the UK. The address of the registered office is
2-8 The Interchange, Latham Road, Huntingdon, Cambridgeshire PE29
6YE. The registered number of the Company is 6165540.
The Company maintains a Premium Listing on the London Stock
Exchange.
This condensed consolidated interim financial information was
approved for issue on 12 September 2011.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of Section 434
of the Companies Act 2006. Statutory accounts for the 52 weeks
ended 2 January 2011 were approved by the Board of Directors on 30
March 2011 and delivered to the Registrar of Companies. The report
of the auditors on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
This condensed consolidated interim financial information has
been reviewed, not audited.
2 Basis of preparation
This condensed consolidated interim financial information for
the 28 weeks ended 17 July 2011 has been prepared in accordance
with the Disclosure and Transparency Rules of the Financial
Services Authority and with IAS 34, 'Interim financial reporting'
as adopted by the European Union. The condensed consolidated
interim financial information should be read in conjunction with
the annual report and financial statements for the 52 weeks ended 2
January 2011 which have been prepared in accordance with IFRS as
adopted by the European Union.
3 Accounting policies
Except as described below, the accounting policies applied are
consistent with those of the annual report and financial statements
for the 52 weeks ended 2 January 2011, as described in those annual
financial statements.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
International Financial Reporting Standards
(a) Standards, amendments and interpretations effective in 2011
but not relevant to the Group's operations
IAS 24 (revised), 'Related party disclosures'.
IAS 32 (amendment), 'Financial Instruments: Presentation and IAS
1: Presentation on classification of rights issue'.
IFRS 1 (amendment), 'First time adoption of IFRS'.
IFRIC 14 (amendment), 'IAS 19 - Prepayments of a minimum funding
requirement'.
IFRIC 19, 'Extinguishing financial liabilities with equity
instruments'.
4 Segment information
Management has determined the operating segments based on the
reports reviewed by the Executive Directors that are used to make
strategic decisions. The Executive Directors have considered the
business from both a geographic and product perspective. From a
geographic perspective, the Executive Directors consider that the
group has six operating segments: i) United Kingdom; ii)
Netherlands; iii) Republic of Ireland; iv) Sweden; v) Denmark and
vi) Central Europe including Poland, Czech Republic, Hungary,
Slovakia, Latvia, Lithuania and Estonia. The United Kingdom,
Netherlands, Republic of Ireland, Sweden and Denmark have been
aggregated into one reportable segment "Western Europe" as they
have similar economic characteristics as identified in IFRS 8.
Central Europe comprises the other reportable segment. From a
product perspective the Executive Directors consider that the Group
has only one identifiable product, wholesaling of meat. The
Executive Directors consider that no further segmentation is
appropriate, as all of the Group's operations are subject to
similar risks and returns and exhibit similar long-term financial
performance. The segment information provided to the Executive
Directors for the reportable segments is as follows:
Operating
Total profit/
segment segment
revenue result
GBP'000 GBP'000
----------------------------- --------- ----------
28 weeks ended 17 July 2011
Western Europe 452,266 12,101
Central Europe 43,976 1,093
----------------------------- --------- ----------
Total 496,242 13,194
----------------------------- --------- ----------
28 weeks ended 18 July 2010
Western Europe 408,102 10,855
Central Europe 41,774 1,297
Total 449,876 12,152
----------------------------- --------- ----------
17 July 18 July
2011 2010 2 January 2011
GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- ---------------
Total assets
Western Europe 185,638 142,327 171,042
Central Europe 21,926 19,610 20,432
-------------------------------- -------- -------- ---------------
Total segment assets 207,564 161,937 191,474
Deferred income tax assets 1,007 565 1,021
-------------------------------- -------- -------- ---------------
Total assets per balance sheet 208,571 162,502 192,495
-------------------------------- -------- -------- ---------------
There are no significant seasonal fluctuations.
5 Income tax expense
Income tax expense is recognised based on management's best
estimate of the weighted average annual income tax rate expected
for the full financial year. The estimated average annual tax rate
used for the 52 weeks to 1 January 2012 is 23.6%. The estimated
average annual tax rate for the 28 weeks ended 18 July 2010 was
23.5%.
6 Dividends
28 weeks 28 weeks
ended ended
17 July 18 July
2011 2010
GBP'000 GBP'000
----------------------------------------------------- --------- ---------
Second interim dividend paid nil (2010: 5.54p) per
ordinary share - 3,859
Final dividend paid 7.4p (2010: 1.22p) per ordinary
share 5,161 850
----------------------------------------------------- --------- ---------
Total dividends paid 5,161 4,709
----------------------------------------------------- --------- ---------
The Directors will declare an interim dividend of 3.1 pence per
share payable on 2 December 2011 to shareholders who are on the
register at 4 November 2011. This interim dividend, amounting to
GBP2.16m has not been recognised as a liability in this interim
financial information. It will be recognised in shareholders'
equity in the 52 weeks to 1 January 2012.
7 Earnings per share
Basic earnings per share are calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has share options for which a calculation is done to determine the
number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share
options.
28 weeks ended 28 weeks ended
17 July 2011 18 July 2010
Basic Diluted Basic Diluted
------------------------- ------------- ------- -------- ------- --------
Profit attributable to
equity holders of the
company (GBP'000) 8,930 8,930 8,202 8,202
------------------------- ------------- ------- -------- ------- --------
Weighted average number
of ordinary shares in
issue (thousands) 69,690 69,690 69,657 69,657
Adjustment for share
options (thousands) - 1,160 - 645
------------------------- ------------- ------- -------- ------- --------
Adjusted weighted
average number of
ordinary shares (thousands) 69,690 70,850 69,657 70,302
------------------------- ------------- ------- -------- ------- --------
Basic and diluted
earnings per share (pence) 12.8 12.6 11.8 11.7
------------------------- ------------- ------- -------- ------- --------
8 Property, plant and equipment and intangible assets
Property,
plant and Intangible
equipment assets
GBP'000 GBP'000
---------------------------------------------- ----------- -----------
28 weeks ended 18 July 2010
Opening net book amount as at 4 January 2010 48,252 2,651
Exchange adjustments (1,218) (40)
Additions 6,805 -
Disposals (16) -
Depreciation and amortisation (6,956) (488)
---------------------------------------------- ----------- -----------
Closing net book amount as at 18 July 2010 46,867 2,123
---------------------------------------------- ----------- -----------
28 weeks ended 17 July 2011
Opening net book amount as at 3 January 2011 57,836 2,063
Exchange adjustments 907 22
Additions 13,037 634
Disposals (15) -
Depreciation and amortisation (7,823) (584)
---------------------------------------------- ----------- -----------
Closing net book amount as at 17 July 2011 63,942 2,135
---------------------------------------------- ----------- -----------
Additions comprise investments required to further mechanise our
processing activities together with expenditure on efficiency
improvement, equipment modernisation and continuing expenditure on
equipment for the new Danish facility. At 17 July 2011 commitments
for the purchase of property, plant and equipment relating to the
new Danish facility totalled GBP3,041,000.
9 Borrowings
17 July 18 July 2 January
2011 2010 2011
GBP'000 GBP'000 GBP'000
------------------ -------- -------- ----------
Current 8,684 6,990 8,828
Non-current 41,491 33,473 35,359
Total borrowings 50,175 40,463 44,187
------------------ -------- -------- ----------
Movements in borrowings is analysed as follows:
28 weeks 28 weeks 52 weeks
ended ended ended
17 July 18 July 2 January
2011 2010 2011
GBP'000 GBP'000 GBP'000
------------------------- --------- --------- -----------
Opening amount 44,187 44,695 44,695
Exchange adjustments 266 (371) (145)
New borrowings 9,257 799 7,700
Repayment of borrowings (3,535) (4,660) (8,063)
Closing amount 50,175 40,463 44,187
------------------------- --------- --------- -----------
10 Share capital
Number of Ordinary
shares shares Total
(thousands) GBP'000 GBP'000
------------------------------------------- ------------ --------- --------
At 4 January 2010 and at 18 July 2010 69,657 6,966 6,966
------------------------------------------- ------------ --------- --------
At 3 January 2011 69,657 6,966 6,966
Issue of new shares on exercise of
employee share options 122 12 12
------------------------------------------- ------------ --------- --------
At 17 July 2011 69,779 6,978 6,978
------------------------------------------- ------------ --------- --------
11 Related party transactions
The Directors do not consider there to be one ultimate
controlling party. The companies noted below are all deemed to be
related parties by way of common Directors.
Sales and purchases made on an arm's length basis on normal
credit terms to related parties were as follows:
28 weeks 28 weeks 52 weeks
ended ended ended
17 July 18 July 2 January
2011 2010 2011
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- --------- -----------
Hilton Meats (International) Limited -
sales 1,758 1,165 2,131
Hilton Meats (International) Limited -
purchases 28,290 33,576 56,706
Romford Wholesale Meats Limited -
purchases 27,805 22,686 44,487
RWM Dorset Limited - purchases 8,395 11,746 20,947
------------------------------------------- --------- --------- -----------
Amounts owing to and from related parties were as follows:
17 July 18 July 2 January
2011 2010 2011
GBP'000 GBP'000 GBP'000
-------------------------------------- -------- -------- ----------
Amounts owing to related parties
Hilton Meats (International) Limited 3,829 3,348 2,831
Romford Wholesale Meats Limited 4,165 2,667 2,645
RWM Dorset Limited 819 1,483 1,467
Amounts owing from related parties
Hilton Meats (International) Limited 166 294 188
-------------------------------------- -------- -------- ----------
The ultimate shareholders of all the above companies have an
interest in the share capital of the Company.
Auditors' review report
Independent review report to Hilton Food Group plc
Introduction
We have been engaged by the Company to review the condensed
consolidated interim financial information in the interim financial
report for the 28 weeks ended 17 July 2011 which comprises the
income statement, the statement of comprehensive income, the
balance sheet, the statement of changes in equity, the cash flow
statement and related notes. We have read the other information
contained in the interim financial report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed consolidated interim
financial information.
Directors' responsibilities
The interim financial report is the responsibility of, and has
been approved by, the Directors. The Directors are responsible for
preparing the interim financial report in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed consolidated interim financial
information included in this interim financial report has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed consolidated interim financial information in the
interim financial report based on our review. This report,
including the conclusion, has been prepared for and only for the
company and the purpose of the Disclosure and Transparency Rules of
the Financial Services Authority and for no other purpose. We do
not, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim
financial information in the interim financial report for the 28
weeks ended 17 July 2011 is not prepared, in all material respects,
in accordance with International Accounting Standard 34 as adopted
by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
Belfast
12 September 2011
The maintenance and integrity of the Hilton Food Group plc
website is the responsibility of the Directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the interim financial report
since it was initially presented on the website. Legislation in the
United Kingdom governing the preparation and dissemination of
financial information may differ from legislation in other
jurisdictions
This information is provided by RNS
The company news service from the London Stock Exchange
END
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