REG - Hilton Food Grp Plc - Interim Results
07/09/2023 07:00
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RNS Number : 6340L Hilton Food Group PLC 07 September 2023
7 September 2023
Hilton Food Group plc
Interim results for the 28 weeks to 16 July 2023
Robust financial performance in line with expectations; strong operational
progress
Business highlights - strong operational progress across categories and
geographies
· Strong performance in APAC region delivered through partnership with
Woolworths
· Core meat category continued to perform well; new business wins in
poultry and food service
· Seafood recovery on track following management actions
· Decisive action responding to market changes in vegan and vegetarian
category
· Launch of Swedish food park in Q3 2023
· Hilton's scale, innovation and technology capabilities underlined via
rollout of new free flow mince packaging with core customer, saving 690 tonnes
of plastic
· Continued progress towards meeting ESG commitments, submitted
ambitious science-based targets in line with 1.5̊ C
Financial highlights - robust financial performance, trading in line with
Board expectations
· Revenue up 5.2% to £2.1bn (2022: £2.0bn) driven primarily by raw
material price inflation
· Volumes 0.2% higher at 272,321 tonnes (2022: 271,708 tonnes)
Adjusted results
· Adjusted operating profit up 1.4% to £41.8m (2022: £41.2m)
· Adjusted profit before tax 22.2% lower to £26.8m (2022: £34.4m)
impacted by higher interest costs
· Adjusted basic earnings per share down 22.9% to 21.6p (2022: 28.0p)
IFRS results
· Operating profit down 0.6% to £30.6m (2022: £30.8m)
· Profit before tax 42.3% lower to £11.3m (2022: £19.6m)
· Basic earnings per share down 49.7% to 7.6p (2022: 15.1p)
· Net bank debt £216.5m (£211.6m at 2022 year end) (2022: £221.0m)
· Interim dividend of 9.0p (2022: 7.1p)
Outlook
Hilton Foods is well positioned to continue to trade in line with Board
expectations for the rest of the year. Growth prospects are underpinned by
recent acquisitions and the continued recovery in seafood, combined with
opportunities to develop cross-category business and utilise wider supply
chain management expertise. Hilton Foods continues to explore growth
opportunities and wider geographic expansion with existing and new customers.
With a strong financial position with leverage and headroom at comfortable
levels, the outlook for continued progress remains positive.
Steve Murrells, Hilton Foods Chief Executive Officer, said:
"I am pleased, in my first set of results as Hilton Food's CEO, to show
delivery of a robust performance against a challenging economic backdrop. Our
core meat business has continued to perform strongly and we are pleased with
the continued recovery in seafood. At the same time, we continue to make
progress in our ESG strategy, including delivering packaging innovation to
reduce plastic usage and setting more ambitious science-based targets.
"I joined Hilton because it is an exciting business with great people, real
expertise in producing high-quality food products that consumers want and is a
trusted partner to retailers around the world. As I look ahead, I am confident
in the opportunities we have to grow, building on our existing partnerships
and forging new ones, based on our unique multi-category protein offer."
A presentation for analysts and investors will be held this morning at 08.30,
which will also be webcast. For details please contact
hiltonfood@headlandconsultancy.com (mailto:hiltonfood@headlandconsultancy.com)
Financial performance - overview:
2023 2022 Change
28 weeks to 28 weeks to Reported Constant currency
16 July 2023 17 July 2022
Volume (1) (tonnes) 272,321 271,708 0.2% 0.2%
Revenue £2,123.1m £2,018.6m 5.2% 5.2%
Adjusted results (2)
Adjusted operating profit £41.8m £41.2m 1.4% 0.6%
Adjusted profit before tax £26.8m £34.4m -22.2% -23.1%
Adjusted basic earnings per share 21.6p 28.0p -22.9% -24.3%
Adjusted EBITDA £67.5m £66.6m 1.3% 0.9%
IFRS results
Operating profit £30.6m £30.8m -0.6%
Profit before tax £11.3m £19.6m -42.3%
Basic earnings per share 7.6p 15.1p -49.7%
Other measures
EBITDA £72.3m £71.9m 0.6%
Net bank debt (3) £216.5m £221.0m
Interim dividend 9.0p 7.1p 26.8%
Notes
1 Volume includes 50% share Portuguese joint venture activities
2 Adjusted results represent the IFRS results before deduction of
acquisition intangibles amortisation and exceptional items and also IFRS 16
lease adjustments as detailed in the Alternative performance measures note 16.
Unless otherwise stated financial metrics in the Financial and strategic
highlights, Review of operations and Financial review refer to the adjusted
results
3 Net bank debt represents borrowings less cash and cash equivalents
excluding lease liabilities
Enquiries:
Hilton Food Group
Tel: +44 (0) 1480 387214
Steve Murrells, Chief Executive Officer
Matt Osborne, Chief Financial Officer
Headland Consultancy
Limited Tel: +44
(0) 20 3805 4822
Susanna
Voyle
Email: hiltonfood@headlandconsultancy.com
Will Smith
Joanna
Clark
This announcement contains inside information.
About Hilton
Hilton Foods builds and operates large scale, highly automated facilities for
food processing, manufacturing and logistics for leading international retail
and food service customers. We are a business of over 7,000 employees,
operating from 24 technologically advanced food processing, packing and
logistics facilities across 19 markets in Europe, Asia Pacific and North
America. For almost thirty years, our business has been built on dedicated
partnerships with our customers and suppliers, many forged over several
decades, and together we target long-term, sustainable growth and shared
value. We supply our customers with high quality, traceable, and assured food
products, with high standards of technical excellence and expertise.
Cautionary statement
This interim management report contains forward-looking statements. Such
statements are based on current expectations and assumptions and are subject
to risk factors and uncertainties which we believe are reasonable.
Accordingly, Hilton's actual future results may differ materially from the
results expressed or implied in these forward-looking statements. We do not
undertake to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Alternative performance measures (APMs)
Hilton uses Alternative Performance Measures (APMs) to monitor the underlying
performance of the Group. Management considers that APMs better reflect
business performance and provide useful information in line with how
management monitor and manage the business day-to-day.
Review of operations
The Group is presenting its interim results for the 28 weeks 16 July 2023,
together with comparative information for the 28 weeks to 17 July 2022. These
interim results are prepared in accordance with UK-adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Performance overview
A robust business performance in the period saw revenue grow by 5.2% with
volumes 0.2% higher. Revenues reflect higher volumes, continued raw material
price inflation and also a full period of trading at Foppen following its
acquisition in March 2022. The operating margin was steady at 2.0% (2022:
2.0%) although the operating margin per kg increased slightly to 15.3p per kg
(2022: 15.2p per kg).
Hilton's results, reported in Sterling, are sensitive to changes in the value
of Sterling compared to the range of overseas currencies in which the Group
trades. Over the 28 weeks to 16 July 2023 there was no significant impact of
average exchange rates on our results compared with 2022.
UK and Ireland
Adjusted operating profit of £12.8m (2022: £11.8m) on revenue of £701.1m
(2022: £695.1m restated)
This operating segment covers the Hilton Foods businesses and joint ventures
in the UK and Ireland including meat processing facilities in Huntingdon, fish
facilities in Grimsby as well as the Fairfax Meadow food service business
acquired in 2021.
Volumes were 4.4% lower although revenue increased by 0.5% on a constant
currency basis. Operating margins increased slightly to 1.8% (2022: 1.7%)
reflecting strong core performance as well as the financial recovery in our
Seafood business which is on track.
Our UK based food service company, Fairfax Meadow continues to grow revenues
and win new business. The strategically well-placed customer base offers
opportunity to expand the range of Hilton Foods products offered to food
service.
Europe
Adjusted operating profit of £20.4m (2022: £19.9m) on revenue of £553.8m
(2022: £495.8m)
This operating segment covers the Group's meat, fish and vegetarian businesses
and joint ventures in Holland, Belgium, Sweden, Denmark, Central Europe,
Greece and Portugal.
Volumes were 1.7% lower although revenue increased by 9.3% on a constant
currency basis due to raw material price inflation. Operating margins were
3.7% (2022: 4.0%). The results reflect strong performance in our Central
Europe and Scandinavia based businesses and a full period's trading
performance for Foppen, the smoked salmon business acquired in March 2022.
Operations at our Dalco vegan and vegetarian business in the Netherlands has
been impacted by increased raw material costs and changes in consumer
purchasing patterns, one key driver of which has been the flight to value
during the cost of living crisis. We are proactively restructuring the
business which will lead to the closure of our Oss facility to optimise the
business at a single site centre of excellence. Our strong product offering,
extensive market experience and focus on operational efficiency puts us in a
strong position to continue to take advantage of market opportunities in this
sector.
In June 2021 the Group's facility in Belgium suffered an extensive fire and we
continue to work closely with insurers to progress the related claims.
APAC
Adjusted operating profit of £16.5m (2022: £13.0m) on revenue of £868.2m
(2022: £827.7m)
In Australia, the Group operates plants in Bunbury, Western Australia,
Melbourne, Victoria and Brisbane, Queensland. We also have a facility in
Auckland, New Zealand.
Volumes during the period increased strongly by 6.8%. Revenues were 6.8%
higher on a constant currency basis. Operating margins increased to 1.9%
(2022: 1.6%) partly attributable to the recovery of higher interest costs
under our cost plus contract. We continue to see strong performance in the
APAC region delivered through our partnership with Woolworths.
Strategic progress
Following a challenging 2022, our UK seafood business recovery is progressing
well with strong cost recovery plans delivering improvements to financial
performance. Investment in automation has enhanced our efficiency and unlocked
capacity to support future growth. There is also a new management team in
place, who are successfully delivering on our recovery plan.
In Q3 2023 we will be launching our new Swedish food park through our retail
partnership with ICA. The new facility will use the latest technology and
automation to produce a range of new private label products including porridge
and soup. It provides opportunity to broaden our customer product portfolio
and unlock further growth in the territory.
We continue to develop and apply automation, robotics and technology services
with our supply chain service offering providing a competitive advantage
facing into sector challenges. In Denmark we have extended our crate wash
services to other categories, cementing our position as a supply chain
partner. We are also extending our services offering into the food service
sector with a returnable crate model trial in the UK.
Delivery of our ESG commitments continues to progress. We have submitted more
ambitious science-based targets which, once validated, will be in line with a
1.5̊ C trajectory. In partnership with retail partners in the UK, Netherlands
and Sweden we have launched mince flow wrap, which achieves a 70% reduction in
plastic packaging. So far we have saved 690 tonnes of plastic.
Investments in our facilities
Hilton continues to invest in all its facilities maintaining state of the art
levels required to service our customers' growth, extend the range of products
supplied to those customers and deliver both first class service levels and
further increases in production efficiency. This investment ensures we can
achieve low unit costs and competitive selling prices at increasingly higher
levels of production throughput. Capital expenditure during the period was
£27.8m (2022: £26.0m) which included investment in the new Sweden food park
and in UK factory automation.
Financial review
Adjusted results represent the IFRS results before deduction of acquisition
intangibles amortisation, exceptional items and IFRS 16 lease adjustments.
These adjustments are detailed in the Alternative performance measures note
16.
Revenue increased by 5.2% to £2,123.1m (2022: £2,018.6m restated) and by
5.2% on a constant currency basis reflecting higher volumes and raw material
price inflation. Further details of revenue and volume growth by segment are
detailed in the Review of operations above.
Adjusted operating profit for the first 28 weeks of 2023 was £41.8m, 1.4%
higher than in the previous year (2022: £41.2m) and 0.6% higher on a constant
currency basis. The adjusted operating profit margin was in line with H1 2022
at 2.0% (2022: 2.0%) but ahead of the adjusted margin of 1.8% for the 2022
full year. IFRS operating profit for the first 28 weeks of 2023 was £30.6m
(2022: £30.8m) after charging exceptional costs of £7.7m (2022: £3.2m).
There were IFRS exceptional costs of £7.7m (2022: £3.2m) which related to
£5.2m of additional costs incurred following the Belgium fire in 2021, £1.2m
on tangible assets impaired due to the anticipated closure of the Dalco Oss
facility and £1.3m of reorganisation costs.
Adjusted net finance costs excluding exceptional items and lease interest
increased to £15.0m (2022: £6.8m) reflecting higher benchmark rates as well
as higher borrowings following the Foppen acquisition in March 2022. Interest
cover was 2.8 times (2022: 6 times). Similarly IFRS net finance costs
increased to £19.3m (2022: £11.2m).
The adjusted taxation charge for the period was £6.8m (2022: £8.4m)
representing an effective underlying tax rate of 25.2%, compared with 24.3%
last year. The IFRS taxation charge was £3.8m (2022: £5.0m) representing an
increased effective underlying tax rate of 34.0% (2022: 25.7%) attributable to
the exceptional costs.
Net income represents profit for the year attributable to owners of the
parent. Adjusted net income of £19.3m was 22.6% lower than last year (2022:
£25.0m) primarily reflecting the significantly higher unrecoverable interest
costs. IFRS net income was £6.8m (2022: £13.5m) impacted by the higher
interest and exceptional costs.
Adjusted basic earnings per share of 21.6p in the first 28 weeks of 2023 were
22.9% below 28.0p last year reflecting lower net income. Similarly IFRS basic
earnings per share was lower at 7.6p (2022: 15.1p).
Adjusted EBITDA increased to £67.5m for the period (2022: £66.6m) and IFRS
EBITDA was £72.3m (2022: £71.9m).
In the first 28 weeks the Group generated £18.9m of cash inflow before
acquisitions and financing activities (2022: cash outflow £17.4m). Net cash
generated from operations of £48.1m (2022: £8.4m) reflects normalisation of
working capital. During the period a further £1.6m was invested in Cellular
Agriculture Ltd following the achievement of development milestones.
Cash balances at 16 July 2023 were £79.7m (2022: £96.9m), which with net of
borrowings of £296.1m (2022: £317.9m), resulted in net bank debt of £216.5m
(£221.0m at 17 July 2022 and £211.6m at 1 January 2023). At 16 July 2023 the
Group had undrawn committed facilities under its syndicated banking facilities
of £88.1m (£106.4m at 1 January 2023). These banking facilities are subject
to covenants comprising net bank debt to EBITDA and interest cover. The Group
had significant headroom under these covenants at 16 July 2023 of at least 33%
for all these metrics.
The Group has maintained a progressive dividend policy since flotation. Hilton
Foods remains financially strong with significant cash balances and undrawn
loan facilities, and we continue to operate well within our banking covenants.
The Board is satisfied that the Group has adequate headroom under its existing
facilities, that it is appropriate to continue to operate and to maintain this
dividend policy and have approved the payment of an interim dividend of 9.0p
per ordinary share (2022: 7.1p). The interim dividend represents an increase
of 26.8% on the interim dividend declared in the prior year and reflects a
resumption in the interim dividend payout being approximately 30% of the
previous year's total dividend. This interim dividend amounting to £8.1m will
be paid on 1 December 2023 to shareholders on the register at close of
business on 3 November 2023.
Going concern
The Directors have performed a detailed assessment, including a review of the
Group's budget and forecasts for the 2023 financial year and its longer term
plans, including consideration of the principal risks faced by the Group. The
resilience of the Group has been assessed by applying significant downside
sensitivities to the Group's cash flow projections. Allowing for these
sensitivities and potential mitigating actions the Board is satisfied that the
Group is able to continue to operate well within its banking covenants and has
adequate headroom under its existing committed facilities which do not expire
until 2027. The Directors are satisfied that the Company and the Group have
adequate resources to continue to operate and meet its liabilities as they
fall due for the foreseeable future, a period considered to be at least 12
months from the date of signing these interim financial statements. For this
reason they continue to adopt the going concern basis for preparing the
financial statements.
The Group's borrowings are detailed in note 12 to this report and the
principal banking facilities which support the Group's existing and contracted
new business, are committed. The Group is in full compliance with all its
banking covenants and based on forecasts and sensitized projections is
expected to remain in compliance. Future geographical expansion which is not
yet contracted, and which is not built into our internal budgets and
forecasts, may require additional or extended banking facilities and such
future geographical expansion will depend on our ability to negotiate
appropriate additional or extended facilities, as and when they are required.
During the 2022 financial year the Group renewed its banking facilities with a
£424m five year revolving credit and term loan facility.
The Group's internal budgets and forward forecasts, which incorporate all
reasonably foreseeable changes in trading performance, are regularly reviewed
by the Board and show that it will be able to operate within its current
banking facilities, taking into account available cash balances, for the
foreseeable future.
The principal risks and uncertainties facing the Group's businesses
Hilton Foods has well developed processes and structures for identifying and
subsequently mitigating the key risks which the Group faces. The most
significant risks and uncertainties faced by the Group, together with the
Group's risk management processes are detailed in the review of Risk
management and principal risks on pages 26 to 31 of the Hilton Food Group plc
2022 Annual report. The principal risks and uncertainties identified in that
report were:
· The progress of the Group's business is affected by the macroeconomic
and geopolitical environment and levels of consumer spending;
· The Group's growth potential may be affected by the success of its
customers and their sales growth;
· The Group strategy focuses on industry-leading customers who can
exercise significant buying power and influence when it comes to contractual
renewal terms at 5 to 15-year intervals;
· As Hilton Foods continues to grow there is more reliance on key
personnel and their ability to manage growth, change, integration and
compliance across new legislative and regulatory environments. This
risk increases as the Group continues to expand with new customers and into
new territories with potentially greater reliance on stretched skilled
resource and execution of simultaneous growth projects;
· The Group's business strength is affected by its ability to maintain
a wide and flexible global food supply base operating at standards that can
continuously achieve the specifications set by Hilton Foods and its customers;
· Contamination within the upstream supply chain including outbreaks of
disease and feed contaminants affecting livestock and fish;
· Significant incidents such as fire, flood, pandemic or interruption
of supply of key utilities could impact the Group's business continuity;
· The Group's IT systems could be subject to cyber-attacks, including
ransomware and fraudulent external email activity. These kinds of attacks are
generally increasing in frequency and sophistication;
· A significant breach of health & safety legislation as complexity
increases in managing sites across different product groups and geographies;
and
· The Group's business and supply chain is affected by climate change
risks comprising both physical and transition risks. Physical risks include
long-term rises in temperature and sea levels as well as changes to the
frequency and severity of extreme weather events. Transition risks include
policy changes, reputational impacts, and shifts in market preferences and
technology.
Cost of living crisis, increasing interest rates and the Russia-Ukraine War
The macroeconomic and geopolitical landscape, exacerbated by the Ukrainian war
and increasing interest rates, is having an unprecedented impact on our supply
chains, operations, consumers and customers. Energy price volatility and an
acute cost of living crisis is impacting consumer spending and eating habits,
although we are expecting this to ease as the rate of food price inflation
slows.
We recognise the impact of increasing interest costs on all businesses and we
continue to focus on ways of reducing our exposure including through the use
of cash pooling and exploring working capital financing.
Our continued focus on cost control, innovation and factory efficiency is
enabling us to manage the inflationary pressures the industry is currently
facing. Through our strong customer relationships we are able to support
consumers to navigate through these challenging times.
Brexit
We continue to monitor the UK and EU regulatory and trade environments as they
evolve and amend processes and operations as required. We are working closely
with our customers and supply chains to ensure preparation for the
implementation of the Windsor Framework in Q4 2023. Our focus on technology
and automation further reduces our risk exposure in this area.
The risks and uncertainties outlined above had no material adverse impact on
the results for the 28 weeks to 16 July 2023 and are expected to remain
virtually unchanged for the remainder of the 2023 financial year.
Steve Murrells
Chief Executive Officer
Matt Osborne
Chief Financial Officer
6 September 2023
Statement of Directors' responsibilities
The Directors confirm that the condensed consolidated interim financial
statements have been prepared in accordance with UK-adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
(a) an indication of important events that have occurred during the first 28
weeks and their impact on the condensed set of financial statements, and a
description of principal risks and uncertainties for the remaining 24 weeks of
the financial year; and
(b) material related party transactions in the first 28 weeks and any material
changes in the related party transactions described in the last annual report.
The maintenance and integrity of the Hilton Food Group plc website is the
responsibility of the Directors; the work carried out by the authors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that might have occurred to the interim
financial statements since they were initially presented on the website.
The Directors of Hilton Food Group plc are listed in the 2022 Hilton Food
Group plc Annual report and financial statements. On 3 July 2023 Philip Heffer
stepped down from the Board and Steve Murrells CBE joined the Board as Group
CEO. There have been no other changes in Directors since 2 January 2023. A
list of current Directors is maintained on the Hilton Food Group plc website
at https://www.hiltonfoods.com/.
On behalf of the Board
Robert Watson OBE
Chairman
Matt Osborne
Chief Financial Officer
Condensed Consolidated Income statement
28 weeks 28 weeks
ended Restated (note 2)
16 July 2023 17 July 2022
Continuing operations Note £'000 £'000
Revenue 4 2,123,139 2,018,597
Cost of sales (1,901,347) (1,831,173)
Gross profit 221,792 187,424
Distribution costs (24,224) (18,314)
Other administrative expenses (159,980) (135,849)
Exceptional items 5 (7,743) (3,183)
Total administrative expenses (167,723) (139,032)
Share of profit in joint ventures and associates 772 721
Operating profit 4 30,617 30,799
Finance income 43 19
Other finance costs (19,386) (11,191)
Exceptional finance costs 5 - (75)
Total finance costs (19,386) (11,266)
Finance costs - net (19,343) (11,247)
Profit before income tax 11,274 19,552
Income tax expense (4,062) (6,526)
Exceptional tax credit 5 228 1,502
Total income tax expense 6 (3,834) (5,024)
Profit for the period 7,440 14,528
Profit attributable to:
Owners of the parent 6,770 13,455
Non-controlling interests 670 1,073
7,440 14,528
Earnings per share for profit attributable to owners of the parent
- Basic (pence) 8 7.6 15.1
- Diluted (pence) 8 7.5 14.9
The above condensed consolidated income statement should be read in
conjunction with the accompanying notes
Condensed Consolidated Statement of comprehensive income
28 weeks ended 28 weeks ended
16 July 2023 17 July 2022
£'000 £'000
Profit for the period 7,440 14,528
Other comprehensive income/(expense)
Currency translation differences (1,498) (714)
(Loss)/gain on cash flow hedges (3,252) 1,756
Other comprehensive income/(expense) for the period net of tax (4,750) 1,042
Total comprehensive income for the period 2,690 15,570
Total comprehensive income attributable to:
Owners of the parent 2,201 14,421
Non-controlling interests 489 1,149
2,690 15,570
The above condensed consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
Condensed Consolidated Balance sheet
16 July 2023 17 July 2022 1 January 2023
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 9 314,266 316,743 327,611
Lease: Right-of-use asset 9 195,869 222,218 216,578
Intangible assets 9 155,558 153,732 160,480
Investments 10 8,485 5,723 6,208
Deferred income tax assets 12,765 12,224 13,801
686,943 710,640 724,678
Current assets
Inventories 191,386 176,259 206,729
Trade and other receivables 261,209 260,079 271,160
Current tax assets 7,137 6,484 5,995
Derivative financial instruments 15 - 4,540 -
Cash and cash equivalents 79,676 96,864 87,224
539,408 544,226 571,108
Total assets 1,226,351 1,254,866 1,295,786
Equity and liabilities
Equity
Ordinary shares 13 8,960 8,938 8,943
Share premium 144,926 143,714 144,926
Employee share schemes reserve 5,901 6,405 5,004
Foreign currency translation reserve (3,696) (2,896) (2,379)
Retained earnings 154,411 170,761 167,862
Reverse acquisition reserve (31,700) (31,700) (31,700)
Merger reserve 919 919 919
Cashflow hedging reserve (2,466) 1,756 786
277,255 297,897 294,361
Non-controlling interests 9,891 6,157 10,956
Total equity 287,146 304,054 305,317
Liabilities
Non-current liabilities
Borrowings 12 268,159 287,460 270,510
Lease liabilities 211,848 236,202 230,152
Deferred income tax liabilities 14,166 12,939 15,921
494,173 536,601 516,583
Current liabilities
Borrowings 12 27,971 30,389 28,279
Lease liabilities 14,048 12,647 16,006
Trade and other payables 396,364 371,175 426,203
Derivative financial instruments 15 6,649 - 3,398
445,032 414,211 473,886
Total liabilities 939,205 950,812 990,469
Total equity and liabilities 1,226,351 1,254,866 1,295,786
The above condensed consolidated balance sheet should be read in conjunction
with the accompanying notes.
Condensed Consolidated Statement of changes in equity
Attributable to owners of the parent
Share capital Share premium Employee share schemes reserve Foreign currency translation reserve Retained earnings Reverse acquisition reserve Merger reserve Cashflow hedge reserve Own shares Total Non-controlling interests Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 3 January 2022 8,893 142,043 6,990 (2,106) 176,449 (31,700) 919 - (87) 301,401 6,548 307,949
Comprehensive income
Profit for the period - - - - 13,455 - - - - 13,455 1,073 14,528
Other comprehensive income
Currency translation differences - - - (790) - - - - - (790) 76 (714)
Gain on cash flow hedging - - - - - - - 1,756 - 1,756 - 1,756
Total comprehensive income for the period - - - (790) 13,455 - - 1,756 - 14,421 1,149 15,570
Transactions with non-controlling interests - - - - - - - - - - (349) (349)
Issue of new shares 13 17 1,671 - - - - - - - 1,688 - 1,688
Adjustment in respect of employee share schemes - - (470) - - - - - - (470) - (470)
Settlement of employee share schemes 28 - (115) - - - - - 87 - - -
Dividends paid 7 - - - - (19,143) - - - - (19,143) (1,191) (20,334)
Total transactions with owners 45 1,671 (585) - (19,143) - - - 87 (17,925) (1,540) (19,465)
Balance at 17 July 2022 8,938 143,714 6,405 (2,896) 170,761 (31,700) 919 1,756 - 297,897 6,157 304,054
Balance at 2 January 2023 8,943 144,926 5,004 (2,379) 167,862 (31,700) 919 786 - 294,361 10,956 305,317
Profit for the period - - - - 6,770 - - - - 6,770 670 7,440
Currency translation differences - - - (1,317) - - - - - (1,317) (181) (1,498)
Loss on cash flow hedging - - - - - - - (3,252) - (3,252) - (3,252)
Total comprehensive income for the period - - - (1,317) 6,770 - - (3,252) - 2,201 489 2,690
Issue of new shares 13 17 - - - - - - - - 17 - 17
Adjustment in respect of employee share schemes - - 897 - - - - - - 897 - 897
Dividends paid 7 - - - - (20,221) - - - - (20,221) (1,554) (21,775)
Total transactions with owners 17 - 897 - (20,221) - - - - (19,307) (1,554) (20,861)
Balance at 16 July 2023 8,960 144,926 5,901 (3,696) 154,411 (31,700) 919 (2,466) - 277,255 9,891 287,146
The above condensed consolidated statement of changes in equity should be read
in conjunction with the accompanying notes.
Condensed Consolidated Cash flow statement
28 weeks ended 28 weeks ended
16 July 2023 17 July 2022
£'000 £'000
Cash flows from operating activities
Cash generated from operations 73,654 27,975
Interest paid (19,386) (11,249)
Income tax paid (6,195) (8,359)
Net cash generated from operating activities 48,073 8,367
Cash flows from investing activities
Acquisition of subsidiary - (81,821)
Purchase of non-controlling interest - (1,207)
Acquisition of investments in joint ventures and associates (1,635) -
Purchases of property, plant and equipment (26,151) (25,494)
Proceeds from sale of property, plant and equipment 266 48
Purchases of intangible assets (1,689) (447)
Interest received 43 2
Net cash used in investing activities (29,166) (108,919)
Cash flows from financing activities
Proceeds from borrowings 18,312 313,618
Repayments of borrowings (13,743) (228,565)
Payment of lease liability (6,871) (7,651)
Dividends paid to owners of the parent (20,221) (19,143)
Dividends paid to non-controlling interests (1,554) (1,191)
Net cash generated (used in)/from financing activities (24,077) 57,068
Net decrease in cash and cash equivalents (5,170) (43,484)
Cash and cash equivalents at beginning of the period 87,224 140,170
Exchange (losses)/gains on cash and cash equivalents (2,378) 178
Cash and cash equivalents at end of the period 79,676 96,864
The above condensed consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Notes to the interim financial statements
1 General information
Hilton Food Group plc ("the Company") and its subsidiaries (together "the
Group") is a leading international multi-protein food business.
The Company is a public company limited by shares 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 06165540.
The Company maintains a Premium Listing on the London Stock Exchange.
These interim financial statements were approved for issue on 6 September
2023.
These interim financial statements do not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory accounts for
the 52 weeks ended 1 January 2023 were approved by the Board of Directors on
23 April 2023 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.
These interim financial statements have been reviewed, not audited.
2 Basis of preparation
This consolidated interim financial report for the 28 weeks ended 16 July 2023
have been prepared in accordance with the UK-adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Going concern
The consolidated interim financial statements have been prepared on the going
concern basis. The Group has undertaken a detailed going concern assessment,
including a review of its budget and forecasts for the 2023 financial year and
its longer term plans, including consideration of the principal risks faced by
the Group. The resilience of the Group in the face of uncertain challenges has
then been assessed by applying significant downside sensitivities to the
Group's cash flow projections. Allowing for these sensitivities and potential
mitigating actions the Board is satisfied that the Group is able to continue
to operate well within its banking covenants and has adequate headroom under
its existing committed facilities. The Directors are satisfied that the Group
has adequate resources to continue to operate and meet its liabilities as they
fall due for a period of at least 12 months from the date of signing these
interim financial statements and therefore consider it appropriate to adopt
the going concern basis of accounting in preparing the consolidated interim
financial statements.
Estimates and judgements
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the
consolidated financial statements for the 52 weeks ended 1 January 2023.
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current
reporting period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
Prior year restatement
Following a review of the classification of revenue recognised in the prior
period, intra-group revenue totalling £20.1m was identified as being included
in the reported figure for external revenue. This has been adjusted in the
comparatives presented with a corresponding reduction in cost-of-sales. There
is no impact on reported profitability for the prior period and revenue
reported for the full year 2022 is not affected as there was no margin charged
on this intra-group revenue.
3 Accounting policies
The accounting policies adopted in the preparation of these interim results
are consistent with those applied in the preparation of the Group's annual
report for the year ended 1 January 2023 and corresponding interim reporting
period.
The group has reviewed its exposure to climate related and other emerging
business risks, but has not identified any risks that could impact the
financial performance or position of the group as at 16 July 2023
The Group has recognised exceptional items during the period, the accounting
policy in respect of these is summarised below.
Exceptional items
Exceptional items are not defined under IFRS. However, the Group classifies
Exceptional Items as those that are separately identifiable by virtue of their
size, nature or expected frequency and that therefore warrant separate
presentation.
As detailed in note 5 during the period to 16 July 2023 the Group has
recognised exceptional items in respect of costs associated with the fire at
its facility in Belgium and re-organisation programs. The income statement
separately shows the impact of the exceptional items on reported operating
profit with further reconciliations between statutory and adjusted measures
used by the Group presented in note 16. Presentation of these exceptional
items and the reconciliations between adjusted and statutory measures is not
intended to be a substitute for or intended to promote the adjusted measures
above statutory measures.
Current income tax
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual earnings.
4 Segment information
Management have 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 four operating segments: i) UK & Ireland which comprises the Group's
operations in United Kingdom and Republic of Ireland; ii) Europe which
includes the Group's operations in the Netherlands, Sweden, Denmark, Central
Europe and Portugal; iii) APAC comprising the Group's operations in Australia
and New Zealand; and iv) Central costs. Previously, the UK & Ireland and
Europe segments were reported on a combined basis as "Europe" but following
the changes to the Group's organisational structure have now been shown
separately. The restated segments are shown in the tables below.
From a product perspective the Executive Directors consider that the Group has
only one identifiable product, wholesaling of food protein products including
meat, fish and vegetarian. 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 segment profit/(loss)
revenue segment result
£'000 £'000
28 weeks ended 16 July 2023
UK & Ireland 701,097 9,018
Europe 553,846 12,339
APAC 868,196 17,266
Central costs - (8,006)
Total 2,123,139 30,617
28 weeks ended 17 July 2022 (Restated)
UK & Ireland 695,137 6,762
Europe 495,788 10,617
APAC 827,672 14,177
Central costs - (757)
Total 2,018,597 30,799
The Group uses a number of alternative performance measures to assess
underlying performance, these are explained and reconciled to the segmental
results presented above in note 16. There is no inter-segment revenue included
in the figures above.
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
(Restated) (Restated)
Total assets
UK & Ireland 381,643 328,577 394,602
Europe 360,432 409,670 375,334
APAC 431,999 481,656 481,229
Central costs 32,375 16,255 24,825
Total segment assets 1,206,449 1,236,158 1,275,990
Current income tax assets 7,137 6,484 5,995
Deferred income tax assets 12,765 12,224 13,801
Total assets per balance sheet 1,226,351 1,254,866 1,295,786
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
(Restated) (Restated)
Total liabilities
UK & Ireland 166,084 161,680 182,267
Europe 178,953 176,045 204,636
APAC 379,749 427,508 466,492
Central costs 200,253 172,640 121,153
Total segment liabilities 925,039 937,873 974,548
Deferred income tax liabilities 14,166 12,939 15,921
Total liabilities per balance sheet 939,205 950,812 990,469
5 Exceptional items
28 weeks ended 16 July 2023 28 weeks ended 17 July 2022
Operating profit Finance costs Tax Profit Operating profit Finance costs Tax Profit
after tax after tax
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Belgium fire 5,239 - - 5,239 3,815 - (954) 2,861
Acquisition of Foods Connected - - - - (3,876) - - (3,876)
Acquisition related costs - - - - 1,204 75 (229) 1,050
Reorganisation costs 1,304 - - 1,304 2,040 - (319) 1,721
Dalco Impairment 1,200 - (228) 972 - - - -
Total exceptional costs 7,743 - (228) 7,515 3,183 75 (1,502) 1,756
Fire in Belgium
In June 2021 the Group's facility in Belgium suffered an extensive fire. The
Group continues to work closely with its insurers to progress related
insurance claims. The results for the period to 16 July 2023 do not include
potential income that may be received in respect of these claims with the
insurance proceeds therefore considered to be contingent assets; at this stage
in the claims process the value of the contingent asset has yet to be
determined. Legal claims have been made against the Group in connection with
the fire, however at this stage the Group considers the likelihood of
incurring financial liabilities as a result of them is remote.
Exceptional costs totalling £5,239,000 have been recognised in the period
relating to additional costs incurred in continuing to supply our customer in
Belgium in connection with the insurance claim and legal claims.
In the prior period exceptional costs totalling £3,815,000 were recognised
relating to additional costs incurred in continuing to operate in Belgium.
Reorganisation Costs
During the period exceptional reorganisation costs of £1,304,000 have been
recognised by the Group. These costs resulted from on-going efficiency and
restructuring programs resulting in redundancies at a number of facilities
operated by the Group.
Dalco Impairment of Property, Plant and Equipment
The intended closure of one of the sites operated by our Dalco business allows
us to optimise production and drive efficiencies at a single site centre of
excellence for our vegan and vegetarian products. An exceptional impairment
charge of £1.2m has been recognised in respect of property, plant and
equipment that the Group does not expect to be able to re-purpose for use in
its other facilities.
6 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 28 weeks to 16 July 2023 is
34.0%. The estimated average annual effective tax rate for the 28 weeks ended
17 July 2022 was 25.7%.
7 Dividends
28 weeks ended 28 weeks ended
16 July 2023 17 July 2022
£'000 £'000
Final dividend paid 22.6p per ordinary share (2022: 21.5p) 20,221 19,143
Total dividends paid 20,221 19,143
The Directors have approved the payment of an interim dividend of 9.0p per
share payable on 1 December 2023 to shareholders who are on the register at 3
November 2023. This interim dividend, amounting to £8.1m has not been
recognised as a liability in these interim financial statements. It will be
recognised in shareholders' equity in the 52 weeks to 31 December 2023.
8 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 period.
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
below 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
16 July 2023 17 July 2022
Basic Diluted Basic Diluted
Profit attributable to equity holders of the Company (£'000) 6,770 6,770 13,455 13,455
Weighted average number of ordinary shares in issue (thousands) 89,525 89,525 89,002 89,002
Adjustment for share options (thousands) - 942 - 1,221
Adjusted weighted average number of ordinary shares (thousands) 89,525 90,467 89,002 90,223
Basic and diluted earnings per share (pence) 7.6 7.5 15.1 14.9
9 Property, plant and equipment, right-of-use and intangible assets
Property, plant and equipment Lease: Right-of-use asset Intangible assets
£'000 £'000 £'000
28 weeks ended 17 July 2022
Opening net book amount as at 4 January 2021 291,488 222,004 105,775
Exchange adjustments 7,996 2,994 175
Acquisition of subsidiary 16,992 3,214 50,851
Additions 25,494 4,376 447
Disposals (109) - -
Lease modifications - 38 -
Transfer 1,841 - 1,392
Depreciation and amortisation (26,959) (10,408) (4,908)
Closing net book amount as at 17 July 2022 316,743 222,218 153,732
28 weeks ended 16 July 2023
Opening net book amount as at 2 January 2022 327,611 216,578 160,480
Exchange adjustments (12,563) (13,558) (191)
Additions 26,151 2,348 1,689
Disposals (340) (86) (760)
Lease modifications - 46 -
Reclassification to right of use asset (94) 94 -
Depreciation and amortisation (25,253) (9,553) (5,706)
Impairment (1,200) - -
Transfers to/from intangibles (46) - 46
Closing net book amount as at 16 July 2023 314,266 195,869 155,558
The Group has commitments to purchase property, plant and equipment of
£5,555,000 (2022: £11,557,000).
Given the current challenges in the alternative proteins market, alongside the
wider inflationary environment an indicator of impairment was considered to
exist at the interim balance sheet date and therefore an impairment assessment
was performed in respect of the carrying value of the Dalco cash generating
unit. The recoverable amount of the Dalco cash generating unit, calculated on
a value in use basis, exceeded its carrying value and therefore no impairment
was required. Key assumptions applied in the calculations of the recoverable
amount were forecast EBITDA, a pre-tax discount rate of 9.7% and a growth rate
of 2%.
The calculations are sensitive to changes in these assumptions with reasonable
possible changes in assumptions being an increase in discount rate of 0.5%pts,
a reduction in growth rate of 0.5%pts or a reduction in budgeted cashflows of
5%. Applying these reasonable sensitivities individually would result in an
impairment charge of £1-2m.
No indicators for impairment of any of the other CGUs have been identified. As
a result, management has not updated any other impairment assessments at the
interim date.
10 Investments
Investments in joint ventures and associates
28 weeks ended 28 weeks ended 52 weeks ended
16 July 17 July 2 January
2023 2022 2022
£'000 £'000 £'000
At the beginning of the period 6,208 5,539 5,539
Acquisitions 1,635 1,190 2,904
Profit for the period 772 721 1,235
Disposal of investment (note 11) - (1,750) (2,925)
Dividends received - - (672)
Effect of movements in foreign exchange (130) 23 127
At the end of the period 8,485 5,723 6,208
11 Business Combinations
2023
There have been no business combinations in the period to 16 July 2023.
2022
Foods Connected Ltd
Group £'000
Property, plant and equipment 71
Intangibles-Technology 2,849
Brand and customer relationship intangibles 6,964
Trade and other receivables 1,231
Cash and cash equivalents 230
Trade and other payables (1,509)
Deferred tax (1,882)
Goodwill 3,300
Fair value of assets acquired 11,254
Consideration
Issue of shares 1,688
Non-controlling interest 3,939
Deemed fair value of existing 50% interest 5,627
11,254
On 7 July 2022 the Group completed the purchase of an additional 15% of Foods
Connected Ltd. taking its interest from 50% to 65%. Foods Connected Ltd.
provides software solutions for supply chain, procurement, food safety,
quality and CSR.
Due to the timing of completion of the acquisition and the timing of other
acquisition activity undertaken by the Group in 2022, the assessment of the
fair values of assets and liabilities acquired and Goodwill was treated as
provisional when the Group reported its 2022 annual results. Following further
review the figures have now been confirmed as final and are in line with the
figures reported in 2022.
Foods Connected Ltd
Consideration for the acquisition of the 15% interest in Foods Connected Ltd
in 2022 totalled £1,688,000 comprised of 170,305 Hilton Food Group plc shares
at Market Value taking the holding of Foods Connected to 65%. The acquisition
of Foods Connected provides an opportunity to deliver growth through new
customer agreements with retailers and manufacturers across Europe and
Australia and provides HFG control over the business.
As a result of the acquisition, and to allow full consolidation of Foods
Connected Ltd as a subsidiary the Group recognised an exceptional gain of
£2,701,000 being the difference between the carrying value of its joint
venture interest at the date of acquisition and its fair value.
The fair value of the technology acquired was established following a review
undertaken by qualified personnel and reflects their existing use value.
The value of technology intangible assets used in the company's operations
have been reviewed and valued at £2,849,000.
The value of customer relationships have also been assessed with the support
of competent professionals. Customer relationships have been assessed to have
a fair value of £6,964,000 and a useful economic life of 10 years. The value
of other assets and liabilities reflect the amounts expected to be realised or
paid respectively.
Goodwill of £3,300,000 has been recognised in 2022. Residual goodwill relates
to the strategic benefits for Hilton of diversifying its business and the
know-how of Foods Connected Ltd's employees.
The value of other assets and liabilities reflect the amounts expected to be
realised or paid, respectively.
12 Borrowings
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
Current 27,971 30,389 28,279
Non-current 268,159 287,460 270,510
Total borrowings 296,130 317,849 298,789
Movements in borrowings is analysed as follows:
28 weeks ended 28 weeks ended 52 weeks ended
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
Opening amount 298,789 224,732 224,732
Exchange adjustments (7,228) 8,064 6,832
New borrowings 18,312 313,618 295,790
Repayment of borrowings (13,743) (228,565) (228,565)
Closing amount 296,130 317,849 298,789
13 Ordinary shares
Number of Ordinary
shares shares Total
(thousands) £'000 £'000
At 4 January 2021 88,935 889 8,893
Issue of new shares on exercise of employee share options 275 3 28
Issue of new shares relating to purchase of additional 15% interest in Foods 170 2 17
Connected
At 17 July 2022 89,380 894 8,938
At 2 January 2023 89,433 8,943 8,943
Issue of new shares on exercise of employee share options 169 17 17
At 16 July 2023 89,602 8,960 8,960
All ordinary shares of 10p each have equal rights in respect of voting,
receipt of dividends and repayment of capital.
14 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.
Transactions between related parties made on an arm's length basis were as
follows:
28 weeks ended 28 weeks ended 53 weeks ended
16 July 17 July 1 January
2023 2022 2023
Group sales: £'000 £'000 £'000
Sohi Meat Solutions Distribuicao de Carnes SA -
Fee for services 1,690 1,708 3,190
Sohi Meat Solutions Distribuicao de Carnes SA -
Recharge of joint venture costs 225 129 409
Agito Holdings Limited - - 464
Group purchases:
Agito Holdings Limited 2,840 - 259
Amounts owing from related parties were as follows:
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
Agito Holdings Limited 484 - 464
Foods Connected Limited - 56 -
Sohi Meat Solutions Distribuicao de Carnes SA 263 240 374
Amounts owing to related parties were as follows:
16 July 17 July 1 January
2023 2022 2023
£'000 £'000 £'000
Agito Holdings Limited - - 259
Foods Connected Limited - 56 -
Sohi Meat Solutions Distribuicao de Carnes SA 439 240 55
15 Financial instruments
The Group holds a number of financial instruments which are carried at cost
which is the equivalent of their fair value unless otherwise stated below.
The Group has derivative financial instruments amounting to £6,649,000
liability (17 July 2022: £4,540,000 asset). The derivative financial
instruments are plain vanilla derivatives including foreign currency
options/forwards. The instruments that have a fair value where specific
valuation techniques are used to arrive at the carrying value which include
for foreign currency forwards - present value of future cash flows based on
the forward exchange rates at the balance sheet date and for foreign currency
options - option pricing models. These derivative financial instruments are
classified as Level 2.
The fair values have been classified into three categories depending on the
inputs used in the valuation technique.
The categories are as follows:
Level 1: quoted prices for identical instruments;
Level 2: directly or indirectly observable market inputs, other than Level 1
inputs; and
Level 3: inputs which are not based on observable market data.
Specific valuation techniques used to value financial instruments include:
· the use of quoted market prices or dealer quotes for similar
instruments
· for foreign currency forwards - the present value of future cash
flows based on the forward exchange rates at the reporting date
· for foreign currency options - option pricing models (e.g.
Black-Scholes model), and
· for other financial instruments - discounted cash flow analysis.
16 Alternative Performance Measures
The Group's performance is assessed using a number of alternative performance
measures (APMs).
The Group's alternative profitability measures are presented before
exceptional items, amortisation of certain intangible assets and depreciation
of fair value adjustments made to property, plant and equipment acquired
through business combinations and the impact of IFRS 16 - Leases.
The measures are presented on this basis, as management believe they provide
useful additional information about the Group's performance and aids a more
effective comparison of the underlying Group's trading performance from one
period to the next.
Adjusted profitability measures are reconciled to unadjusted IFRS results on
the face of the income statement below.
Reported Add back: IFRS 16 depreciation and interest Less: IAS 17 lease accounting costs Reported excluding IFRS 16 Exceptional items Add back: Amortisation of intangibles & fair value adjustments Adjusted
28 weeks ended 16 July 2023 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Operating profit - excl. exceptional items 38,360 9,459 (11,301) 36,518 - 5,252 41,770
Exceptional items (7,743) - - (7,743) 7,743 - -
Operating profit 30,617 9,459 (11,301) 28,775 7,743 5,252 41,770
Net finance costs (19,343) 4,330 - (15,013) - - (15,013)
Profit before income tax 11,274 13,789 (11,301) 13,762 7,743 5,252 26,757
Income tax expense (3,834) (1,454) - (5,288) (228) (1,234) (6,750)
Profit for the period 7,440 12,335 (11,301) 8,474 7,515 4,018 20,007
Less non-controlling interest (670) (19) - (689) - - (689)
Profit attributable to members of the parent 6,770 12,316 (11,301) 7,785 7,515 4,018 19,318
Depreciation, amortisation and impairment 41,656 (9,459) - 32,197 (1,200) (5,252) 25,745
EBITDA 72,273 - (11,301) 60,972 7,743 - 67,515
Earnings per share pence pence pence
Basic 7.6 8.7 21.6
Diluted 7.5 8.6 21.4
Reported Add back: IFRS 16 depreciation and interest Less: IAS 17 lease accounting costs Reported excluding IFRS 16 Exceptional items Add back: Amortisation of intangibles & fair value adjustments Adjusted
28 weeks ended 17 July 2022 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Operating profit - excl. exceptional items 33,982 10,314 (8,414) 35,882 - 5,308 41,190
Exceptional items (3,183) - - (3,183) 3,183 - -
Operating profit 30,799 10,314 (8,414) 32,699 3,183 5,308 41,190
Net finance costs (11,247) 4,372 - (6,875) 75 - (6,800)
Profit before income tax 19,552 14,686 (8,414) 25,824 3,258 5,308 34,390
Income tax expense (5,024) (653) - (5,677) (1,502) (1,166) (8,345)
Profit for the period 14,528 14,033 (8,414) 20,147 1,756 4,142 26,045
Less non-controlling interest (1,073) (12) - (1,085) - - (1,085)
Profit attributable to members of the parent 13,455 14,021 (8,414) 19,062 1,756 4,142 24,960
Depreciation, amortisation and impairment 41,054 (10,314) - 30,740 - (5,308) 25,432
EBITDA 71,853 - (8,414) 63,439 3,183 - 66,622
Earnings per share pence pence pence
Basic 15.1 21.4 28.0
Diluted 14.9 21.1 27.7
Segmental operating profit reconciles to adjusted segmental operating profit
as follows:
Reported Add back: IFRS 16 depreciation and interest Less: IAS 17 lease accounting costs Reported excluding IFRS 16 Exceptional items Add back: Amortisation of intangibles & fair value adjustments Adjusted
28 weeks ended 16 July 2023 £'000 £'000 £'000 £'000 £'000 £'000 £'000
UK & Ireland 9,018 1,508 (2,009) 8,517 1,242 3,039 12,798
Europe 12,339 1,900 (2,511) 11,728 6,439 2,213 20,380
APAC 17,266 5,992 (6,781) 16,477 - - 16,477
Central costs (8,006) 59 - (7,947) 62 - (7,885)
Total 30,617 9,459 (11,301) 28,775 7,743 5,252 41,770
Reported Add back: IFRS 16 depreciation and interest Less: IAS 17 lease accounting costs Reported excluding IFRS 16 Exceptional items Add back: Amortisation of intangibles & fair value adjustments Adjusted
28 weeks ended 17 July 2022 £'000 £'000 £'000 £'000 £'000 £'000 £'000
UK & Ireland 6,762 2,163 (1,886) 7,039 2,040 2,675 11,754
Europe 10,617 2,081 735 13,433 3,815 2,633 19,881
APAC 14,177 6,070 (7,263) 12,984 - - 12,984
Central costs (757) - - (757) (2,672) - (3,429)
Total 30,799 10,314 (8,414) 32,699 3,183 5,308 41,190
Independent review report to Hilton Food Group plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Hilton Food Group plc's condensed consolidated interim
financial statements (the "interim financial statements") in the condensed
consolidated interim financial statements of Hilton Food Group plc for the 28
weeks week period ended 16 July 2023 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Balance sheet as at 16 July 2023;
· the Condensed Consolidated Income statement and the Condensed
Consolidated Statement of comprehensive income for the period then ended;
· the Condensed Consolidated Cash flow statement for the period
then ended;
· the Condensed Consolidated Statement of changes in equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the condensed consolidated
interim financial statements of Hilton Food Group plc have been prepared in
accordance with UK adopted International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council 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, 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.
We have read the other information contained in the condensed consolidated
interim financial statements and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the interim
financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The condensed consolidated interim financial statements, including the interim
financial statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the condensed
consolidated interim financial statements in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the condensed consolidated interim financial
statements, including the interim financial statements, the directors are
responsible for assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the condensed consolidated interim financial statements based on
our review. Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit procedures,
as described in the Basis for conclusion paragraph of this report. This
report, including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this conclusion,
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.
PricewaterhouseCoopers LLP
Chartered Accountants
Belfast
6 September 2023
The maintenance and integrity of the Hilton Food Group 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 financial
statements since they were initially presented on the website. Legislation in
the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
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