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Hilton Food Group (HFG) said it was well positioned to make the most of future growth prospects both at home and abroad with the announcement of an uplift in interim pre-tax profit of 10.6% from £21m to 23.2m.

It said contribution from both UK meat and Seachill, further progress from its Australian operations and from the new Dalco and HFR Food Solutions business drove volume growth of 6.8% and revenue growth of 6.5% on a constant currency basis.

Revenue climbed 6.5% on a constant currency basis, and 5.6% on a reported basis to £912.1m. Operating profit climbed 14.6% on a constant currency basis to £26.7m.

Robert Watson, executive chairman, said Hilton had expanded its operational scale and diversified into new high-growth proteins while delivering continued increases in volume and profit.

“Our new factory in Brisbane, Australia, began production ahead of schedule and we also opened our fresh convenience foods facility in Poland.

“In the UK we are now packing 100% of Tesco retail packed red meat. Investments in vegetarian and sous vide manufacturers increases the new protein offerings we can supply to our retailer partners.”

Watson said the group’s financial position remained strong and it was well positioned to capitalise on future growth prospects both in domestic and overseas markets are they arose. Full-year results should be in line with the board’s expectations.

Hilton shares were up 1.7% to 994.4p in early trading this morning.

Morning update

Pre-tax profits at fresh prepared food supplier Bakkavor Group (BAKK) plunged nearly 59% in the first half of the year from £47.1m to £19.5m on group revenue up 1.4% from just under £910m to £923m.

It was a period Agust Gudmundsson, chief executive, described as “challenging” but he expected an uplift in performance, boosted in the UK by the impact of new business and an easing of raw material inflation.

Group like-for-like revenue rose 2% to £877.9m in the 26 weeks to 29 June. The UK managed just 0.7% growth to £772.2m while international grew 12.7% to £105.7m.

Adjusted EBITDA pre-IFRS 16 fell 6.5% to £73.5m. Margins fell 60bps in line with the company’s expectations.

Some £13.1m of exceptional costs and £8.3m of start-up losses for new sites impacted operating margin. Operational net debt increased to £356.6m following a period of planned capital investment.

Gudmundsson said: “During a challenging period, I’m pleased by the resilience we’ve shown across the business to deliver a solid first half performance. While the trading environment in the UK is still uncertain, we remain positive of our long-term prospects and the demand for fresh prepared food.

“Our UK operations have never been stronger and we’re the clear market leader across all four of our core categories. I’m encouraged by developments made across our US business; improving efficiencies, streamlining our customer proposition and building sales across new sites.”

The business in China continued to go from strength to strength, expanding both its customer base and product offering.

“Despite a subdued start to the second half, we currently expect an uplift in performance, boosted in the UK by the impact of new business and an easing of raw material inflation.”

The international business was making further progress and therefore the group remained confident it would deliver full-year performance broadly in line with 2018, said Gudmundsson.

“Looking further ahead, we believe that our strategy, combined with our scale and expertise, leaves us well placed to capitalise on future growth opportunities.”

Bakkavor shares rose 1.2% this morning to 108.7p, but remain 36.8% down year-on-year.

On the markets this morning, the FTSE 100 fell 0.3% in early trading to 7,212pts.

Early risers include Hotel Chocolat Group (HOTC), up 1.4% to 375p, PayPoint (PAY), up 1% to 930.9p, Marks and Spencer Group (MKS), up 0.5% to 197.1p, PZ Cussons (PZC), up 0.5% to 214.5p and Sainsbury (SBRY), also up 0.5% to 201.7p.

Fallers so far today include McBride (MCB), down 2.5% to 48.3p, Tesco (TSCO), down 2.1% to 225.8p, Associated British Foods (ABF) fell 2% to 2,258p following yesterday’s trading update and Compass Group (CPG) dropped 1.9% to 1,997p.

Yesterday in the City

Logistics firm Eddie Stobart said it had received a potential offer by funds managed by DBAY Advisors.

It stressed there could be no certainty that an offer would be made or as to the terms of any offer.

DBAY is required to announce a firm intention to make an offer no later than 5pm on 7 October or walk away.

The FTSE 100 closed down 0.6% to 7,235.81pts.

FTSE 100 fallers included Coca-Cola HBC (CCH), down 3.4% to 2.715p, Just Eat (JE), off 2.9% at 760p, Compass Group (CPG), down 2.9% at 2,035p Marston’s (MARS) moved down 2.8% to 123.2p and Wynnstay Group (WYN) closed down 2.5% at 290p.

Stocks on the up included Nichols (NICL), up 1.5% to 1.725p, Premier Foods (PFD), up 1.4% to 32.2p following yesterday morning’s trading statement, PureCircle (PURE), climbed 0.9% to 247.3p and Hilton Food Group (HFG), edged 0.7% higher to 978p ahead of this morning’s interims.

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