- Meat packer recruits former Co-op boss as CEO
- Results confirm 17.4% profits plunge
- Seafood business has stabilised
Meat- and fish-packing business Hilton Food (HFG) has hired proven food industry leader and former Co-op boss Steve Murrells as its new CEO as the company continues to restore investor confidence in its global growth story following two profit warnings last year.
Shares in the FTSE 250 food producer cheapened 1.6% to 684p as results for 2022 confirmed a tough year, with pre-tax profit plunging 17.4% to £55.5 million.
This reflected a perfect storm of the cost-of-living crisis and unprecedented raw material cost inflation in its UK seafood business, which took longer than expected to recover, not to mention higher finance costs.
As Shares explained here, the supplier of red meat and vegetarian meals to the likes of Tesco (TSCO), Ahold Delhaize (AD:VIE) and Australia’s Woolworths (WOW:ASX) is rebuilding confidence and rehabilitating its UK seafood business after a testing 2022 which saw two earnings downgrades.
On the positive side, Hilton Food’s sales rose 16.5% to £3.8 billion last year, underpinned by price increases, contributions from recent acquisitions and a first full year of trading in New Zealand.
And the outlook for 2023 and beyond looks much better, with the UK seafood operation recovering under a new leadership team and the core meat business in rude health. Hilton Food also raised the final dividend by 5% to 22.6p in a strong show of confidence.
WHO IS STEVE MURRELLS?
Chief executive Philip Heffer will step back from running the company this summer after almost 30 years with Hilton Food, which has recruited Steve Murrells (pictured below) as his successor.
Heffer will remain with the business as co-founder and advisor to the board.
Murrells knows the business well - he was one of Hilton Foods’ first customers and commercial partners at Tesco - and his impressive CV includes a spell as CEO of Co-op Food, where he oversaw a turnaround and repositioned the business as a leading convenience retailer.
This was followed by a five year stint as CEO of Co-op Group, during which he steered the business through the Covid-19 pandemic.
‘Back in the 1990s and early 2000s,’ commented Murrells, ‘I was the meat category director at Tesco when Hilton was pioneering centrally packed meat, and the way Philip and the team have grown the business since then has been incredible, with fifteen years of sensational growth. I’ve loved getting to know the business again recently, and what is exciting is that there is so much still to achieve.’
THE HOUSE BROKER’S VIEW
House broker Shore Capital reiterated its view that Hilton Food is a ‘world class business’ that has ‘cultivated a broad array of growth opportunities across a range of proteins, geographies and services’.
While last year proved to be ‘unprecedentedly challenging from a raw material cost perspective’, Shore Capital regards the de-rating of Hilton Food’s shares as ‘a clear opportunity to acquire a high-quality cash-generative growth business.’
