Hilton Foods' sizzling interims lift shares to all-time high

With almost 134,000 tonnes of meat processed in the 28 weeks to 17 July, a 4.5% increase on the same period last year, sales were lifted 9.1% to £631.9m.

Hilton hailed the encouraging volume growth despite what remains a challenging retail grocery market, pointing to higher volumes in the UK following the investment bedding-in phase with Tesco, encouraging growth in Ireland and further progress in Holland and Central Europe.

The higher sales, the successful launch of Hilton's UK meat trading business at the beginning of the year and reduced costs meant underlying operating profits grew 21% on a constant currency basis, with a boost from the weak pound helping lift profit before tax nearly 27% to £16.7m, with earnings per share up 28% to 16.9m.

Cash generation remained strong but was down 4% to £12.8m and the board lifted the interim dividend 12.2% to 4.6p.

Chief executive Robert Watson hailed "strategic progress", particularly in terms of geographic expansion with the roll out in Australia on schedule and the early stages of a new partnership agreed with Sonae in Portugal.

"We continue to grow our existing business through innovation and product development including the establishment of a meat trading business in the UK to utilise our industry experience, procurement strength and trade contacts together with the Swedish range extension into pizzas later in the year.

"We will continue with our strategy of furthering the geographic reach of the Hilton model exploring a range of new expansion opportunities".

House broker Numis said it would update its numbers in the coming days but said the strong first half provided "good underlying momentum that will stand the group in excellent stead" for the second half and coming year, with "rising net cash resources available if required to facilitate any further organic expansion with new/existing customers".