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Hilton Food Group has reported falling sales despite rising volumes as the meat packing company is hit with the double whammy of unfavourable exchange rates and falling prices. The business said the 12 months to 28 December was a “year of investment for future growth”.

There was substantially higher investment in the year – up from £18.4m for 2013 to £43.3m – covering major reinvestment programmes in the UK and Sweden. Hilton is currently modernising and expanding capacity at its Huntingdon site to service increased volumes for Tesco.

It registered volume growth of 3.5% to 231,500 tonnes, with growth in the UK and Holland partly offset by continuing pressure on consumer spending in other countries. Revenues reduced by 2.3% from £1.12bn to £1.1bn, reflecting a 4.6% unfavourable movement in exchange translation and of lower raw material meat prices flowing through into reduced selling prices.

However, operating profits were slightly ahead of the previous year at £26.1m, up from £25.8m, despite an increased level of start-up costs in the UK and the impact of currency fluctuations.

The group’s shares opened more than 10p lower than yesterday’s closing price of 433p, but have since made a steady recovery to 427p.

“I am pleased to report that during 2014 Hilton made sound progress in underpinning its future growth strategy, including the continued development of our Australian joint venture and the major UK capacity expansion,” CEO Robert Watson said.

“The high level of investment made in our meat packing facilities in 2014 was essential to facilitate the group’s planned future growth. We will continue to seek out available opportunities to progressively and profitably expand the scale and scope of our operations, employing a business model that remains resilient, relevant and internationally transferable.”

Morning update

The private equity owner of Heinz and Burger King is lining up a deal to snap up Kraft Foods Group for anywhere up to $50bn, according to reports from the US. A “a person close to the matter” told the Wall Street Journal that Brazilian group 3G Capital was in advanced talks with Kraft. The PE firm has been searching for its next target for several months and has been linked with a number of US giants from Pepsi to Kelloggs. It is rumoured that because of the size of the transaction 3G may partner up again with Warren Buffett’s Berkshire Hathaway again – the pair combined two years ago for the $23.2bn Heinz deal. Shares in Kraft soared by 16.5% to $71.44 – giving it a valuation of more than $40bn – in after-hours trading yesterday. And when debt is factored in, a deal with 3G could end up valuing Kraft at around $50bn.

Brewer Adnams grew its operating profit grow by 15% to £3.8m in 2014 as sales rose 9% to £66m. Sales of its own beer reached their highest ever levels at more than 95,000 barrels (over 27 million pints), with debt levels falling by £2.7m to £8m. Adnams responded to the positive financials by recommending a 6.25% increase in its final dividend.

“We have been growing and strengthening the Adnams brand over a long period of time and our name and reputation, backed-up by high quality products, have served us well in very competitive markets in the last year”, the brewery said. “A lot of things came right for us in 2014, much of which were down to our own strategies and some were down to a stronger external environment. The economic upturn that we saw in the second half of 2013 continued during 2014 and the beer market showed its first increase in volumes for many years. The weather too was relatively benign for much of the year.”

London private equity house TowerBrook Capital Partners has acquired Netherlands-based frozen food producer Van Geloven. The company supplies a range of frozen convenience snacks and foods, including the Mora brand, the artisanal ragout brand the Bourgondiër and satay specialist Hebro. It also has private label contracts with major retail and foodservice customers. Van Geloven generated sales of €195.4m in 2014 and the management team were also part of the deal alongside TowerBrook.

British American Tobacco has completed the competitive tender process to replace PwC as auditor. The cigarette maker appointed rival Big Four firm KPM, with shareholder approval to be sought at April’s AGM.

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