Trade Resources Company News Hilton Food Is Likely to Suffer a Short-Term Impact From The Horsemeat Scandal

Hilton Food Is Likely to Suffer a Short-Term Impact From The Horsemeat Scandal

Meat packing firm Hilton Food is likely to suffer a short-term impact from the horsemeat scandal, despite none of its products being involved, according to City analyst Panmure Gordon.

Hilton Food Group was likely to suffer a short-term impact from the horsemeat crisis

The analyst’s executive director Graham Jones said:“While no Hilton products have been caught up in the European horsemeat issue, we expect that consumer sentiment to beef could have been impacted short-term.”

Jones added that 2012 was likely to prove a disappointing year from an earnings perspective. He forecast a 1.3% decline to 24.3p driven by a 4–5% impact from currencies and a big impact from consumer down-trading.

The past year had proved significant for the firm, said Jones, with the successful commissioning of the robotic store-order picking system in Denmark and the launch of a joint venture with Woolworths in Australia.

Horsemeat scandal

Also, the horsemeat scandal across Europe had “reminded everyone of the value of high quality, traceable supply”.

Moreover exchange rates had moved in Hilton’s favour.

Panmure Gordon forecast sales rising by 4.8% to 1,029M, despite a 4–5% impact from currency. Operating margins were predicted to fall from 2.6% to 2.5%, due to “significant consumer down-trading and the effect of rising prices on packing rate agreements”.

Profit before tax was predicted to fall by 0.9% to 24.3M and earnings per share to fall by 1.3% to 24.3p.

“For a company with such attractive growth opportunities, strong balance sheet and impressive cash generation, we believe this is good value, particularly relative to its mid-cap peers,” concluded Jones.

Panmure Gordon’s advice on the firm’s stock was ‘buy’.

Hilton Food Group’s full year results will be published on Thursday March 28.

Source: http://www.foodmanufacture.co.uk/Business-News/Hilton-Food-Group-likely-to-be-affected-by-horsemeat-scandal
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Hilton Food Group Likely to Be Affected by Horsemeat Scandal