Meat packing firm Hilton Food Group said trading was in line with expectations despite higher raw materials prices and challenging market conditions but gave downbeat outlook for the remainder of the year, sending its shares lower.
Hilton Food said, "The trading environment for the rest of 2011 is likely to remain challenging, with economic recovery across the European countries in which we operate moving at different speeds."
For the 28 weeks ended 17th July, the company said it has recorded good turnover growth in Western Europe, which benefited from a strong performance in Sweden "where the economic recovery has continued."
Also, Hilton Food said volumes in Denmark have started to grow after its facility was opened three months ahead of schedule. It added that it continues to grow the business in Central Europe, and is benefiting from the first full year of sales to Rimi in Estonia.
"The company's balance sheet remains strong. As expected, net debt has increased, reflecting completion of the first phase of investment in Denmark. We remain financially well placed for future expansion," the company said.
Shares of Hilton Food slipped 0.5% to 278.7p in London.
Things are looking good for Hilton Food Group, but after the shares' advance year-to-date the company's stock seems to have gone high enough for now. On Monday Hilton announced its intention to invest an estimated 20m pounds at its Huntingdon plant to supply Tesco with packed meat. The agreement, which runs until 2019, or perhaps beyond that, will boost UK volumes by about 40 per cent, or an estimated 140m pounds. [Tue 07:12]
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