Business Overview
Hilton Food Group plc (LSE: HFG) is one of the leading specialist international meatpacking companies. The company was incorporated in the year 1994 and manufactures a range of products including roasting joints, steaks, chops, and minces. Hilton is headquartered in Huntingdon, Cambridgeshire, the UK.

Recent Developments
On March 27, 2019, Company has reported its full-year financial results for the period ended December-30-2018. Group’s revenue surged by 21.9% (constant currency) to £1,649.6 million as compared with revenue of £1,357.3. On February 8, 2019, the company acquired 50 per cent stake in the leading vegetarian manufacturer Dalco Food B.V. Hilton Food Plc has scheduled its Annual Shareholder Meeting on May 21, 2019.

Financial Performance – (FY2018) (£k)

For FY18, revenue from operation surged by 21.9% on a constant currency basis, volume grew by 13.5%, on account of a full-year contribution from Seachill and Australia. The company reported a strong operating profit for FY18 of 27% including full-year trading at Seachill post-acquisition in 2017 and production start in Australia. Adjusted operating profit grew by 28.2% (on a constant currency basis) to £48.7 millionas compared with £38.3 million during FY17.Reported growth in earning per share stood at 13.1% as compared with the previous financial year. Hilton Plc is foraying into new geographies and markets either with its existing partners or with new customers.
EBITDA surged by 18.9% to £70.7 mnas compared with £59.5 million (excluding extraordinary acquisition expenses), indicating a surge in operating profit along with higher depreciation cost.
Net finance cost rose to £3.0 million as compared with £0.9 million during FY17, indicating higher debt borrowed for acquisition at Seachill and increased investment in their other facilities as well. Dividend per share rose by 12.6% to 21.4 pence as compared with a dividend of 19.0 pence per share during FY17.

Stock performance – 1 Year

Daily Price Chart as on March 28, 2019, before the market close. (Source: Thomson Reuters)

At the time of writing (as on March 28, 2019, at 11:05 AM GMT), shares of Hilton Plc were quoting at GBX 915.0 and added 1.0 points or 0.10% against its previous day close price. Shares have registered a 52w high of GBX 1,020.0, and a 52w low of GBX 800.0 and at the current price level shares were trading 10.39% below its 52w high level and 14.25% above its 52w low level, respectively.

Although at the simple moving average (SMA)standpoint, shares were trading below its 30-day, 60-day and 200-day simple average price level, which indicates that stock is in a downtrend. Also, at volume standpoint, stock's 5-day average daily volume traded on the London Stock
Exchange (LSE) was 30.89% below against its 30-day average daily volume traded on the LSE.

On a year-on-year basis, shares of Hilton Food Plc have delivered a return of 18.70%, but on a year-to-date basis, shares have delivered a return of 1.1% which was relatively below than the industry performance and broader index FTSE 100 index performance during the same period.

Valuation


Future Prospects 
New facilities which are yet to be open in New Zealand and Australia will drive company’s growth in the short and medium-term, also Hilton is enhancing its fish category and foraying into vegetarian category through the recent acquisition of Dalco. As per the management of Hilton Plc, the company's early performance in 2019 was in line with the management expectations.

Conclusion
The food products industry is highly regulated. As a manufacturer and distributor of food products, Hilton is subject to a number of food-related regulations. Also, since the company operates in various geographical regions, it has to comply with the regulation specific to each of the markets. In the UK, Hilton's operations are subject to multiple food, safety and environmental regulations. Also, Hilton presents all its financials in the British Pound and most of its earnings come from other European countries and transactional currencies principally remain Euro, Swedish Krona, Danish Krone and Australian Dollar. Thus, the company’s operations are always exposed to currency exchange rate volatility risks.  On the basis above rationale and valuation done by using the above method, we recommend potential investors to keep a close watch on this stock at the current price level.
 

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