Annual Financial Report

RNS Number : 8694Q

Hilton Food Group PLC

21 April 2009

 



Hilton Food Group Plc - Annual Financial Report

Hilton Food Group PLC

21 April 2009

For Immediate Release

Hilton Food Group plc (the 'Company')

Annual Financial Report

* Annual Report and Accounts for the year ended 31 December 2008

* Notice of Annual General Meeting 2009

* Form of Proxy for the Annual General Meeting

Copies of the above documents which were posted to shareholders on 20 April 2009 have been submitted to the UK Listing Authority and will be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at: The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.The Company's Annual Report may also be found on its investor website - www.hiltonfoodgroupplc.co.uk.

The Company announced its preliminary results for the year ended 31 December 2008 on 31 March 2009 which included audited financial statements and a fair review of business. The Company today provides the following additional regulated information, included within its Annual Report, in full unedited text as required to be made public under the Disclosure and Transparency Rules.

 Responsibility statement of the Directors in respect of the Annual Report and Accounts

Each of the Directors whose names and functions are set out below, confirm that to the best of their knowledge:

* the Group and parent company financial statements, prepared in accordance with applicable UK law and in conformity with IFRS, as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the Company; and

* the management reports (which comprise the Chairman's statement, the Chief Executive's review, the Group Business review and the Directors' report) include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principle risks and uncertainties they face which are detailed in the Corporate Governance report.

This responsibility statement was approved by the Board of Directors on 30 March 2009.

Directors

R Watson, OBE - Chief Executive

N Majewski - Finance Director

C Patten - Commercial Director

T Bergman - Ahold Business Director

P Heffer - Tesco Business Director

G Summerfield, CBE - Non-Executive Chairman

Sir D Naish, DL - Non-Executive Director

C Marsh - Non-Executive Director

 Principal Risks and Uncertainties

The Group's growth potential is dependent on the success of its customers and the future growth of their packed meat sales

All of the Group's products bear the brand labels of the customer to whom the products are supplied. The Group is therefore dependent on its customers to maintain or improve the public perception of their own brand names and sales of packed meat, but will play its full part in enhancing their brand values, by providing high quality competitively priced products, high service levels and continuing product and packaging innovation.

The Group recognises that quality assurance is integral to its customers' brands and works closely with its customers to ensure rigorous quality assurance standards are met. It is continuously measured by its customers across a wide range of parameters, including delivery time, product specification and accuracy of documentation and targets high service levels across all these parameters. The Group works closely with its customers to identify improvement opportunities across the supply chain, include product presentation, extending shelf life and reducing wastage. 

The Group is dependent on a small number of customers who exercise significant buying power and influence 

The Group has a comparatively narrow customer base, with sales to Tesco, Ahold (and its subsidiaries) and ICA currently comprising nearly all Hilton's revenue. The large retail chains continue to increase their market share of meat products in many countries, as retail customers move away from high street butchers towards one stop convenience shopping in large supermarkets. The continuation of this trend serves to increase the buying power of the Group's customers which in turn increases their negotiating power with the Group, which may enable them to seek better terms over time.  

Hilton's state of the art facilities, and management's continuous focus on reducing costs, allow it to operate efficiently at high throughputs and price its products competitively, which is particularly important in the current difficult economic environment. The Group's customer driven business model is focused solely on central meat packing and is unencumbered by the issues and conflicts faced by the majority of the group's competitors who are involved in significant upstream processing, including rearing, slaughtering and cutting. 

Hilton operates a decentralised entrepreneurial business structure, which enables it to work very closely with its retail partner in each country, and achieves high service levels in terms of orders delivered, delivery times, compliance with product specifications and accuracy of documentation, backed by an uncompromising focus on food safety and product integrity.

The Group's written supply contracts are renewable at various intervals. One such contract is due for renewal in 2009 and the Board expects this contract to be renewed on substantially unchanged terms.

The Group's business is reliant on a number of key personnel and its ability to manage growth successfully 

The Group is critically dependant on the skills of a small number of senior managers and, as the business develops and expands, the group's success will depend on its ability to attract and retain the necessary calibre of personnel in key positions. To continue to manage growth successfully, the Group will carefully manage its skill resources and continue to invest in on-the-job training and career development, together with the cost effective management of quality, appropriately scaleable information and control systems. 

The Group's business is dependent on maintaining a wide and flexible global meat supply base

The Group is reliant on its suppliers to provide sufficient volume of products on short lead times as ordered by its customers. The Group sources certain of its meat requirements from outside the European Union, for example South America and New Zealand. Tariffs, quotas or trade barriers imposed by countries where the group procures meat, or may do so in the future, and the progress of World Trade Organisation talks and other global trade developments could materially affect the Group's international procurement ability, making the maintenance of a wide and flexible global meat supply base essential. 

Outbreaks of disease and feed contamination affecting livestock and media concerns can impact the Group's sales

Reports in the public domain concerning the risks of consuming meat can cause consumer demand for meat to drop significantly in the short to medium term. A food scare similar to the Bovine Spongiform Encephalopathy ('BSE') scare that took place in 1996, or the much more recent disclosure of dioxin contamination of animal feed in Ireland can affect public confidence in red meats. 

The Group sources its meat from a trusted raw material supply base which all meet European and customer standards. The Group is subject to stringent standards which are independently monitored in every country and reliable product traceability and high welfare standards from the farm to the consumer are integral to the group's business model. The Group ensures full traceability from source to packed product across all suppliers, countries and packing sites.

The Group's business is dependent on the state of the economy and levels of consumer spending in the countries in which it operates

No business will be immune to the worsening economic climate and the reduced levels of consumer spending currently being experienced across Europe, but the Board expects, with a sound business model and strong retail partners, to be able to able to continue to make progress.

For further enquiries please contact:

Neil George

Company Secretary

Hilton Food Group plc

Tel. [phone]

 

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