Hilton Food’s shares have rebounded after a tough first few months of the year, and are up by around a fifth since the end of January. The company’s latest results, which included confirmation of its largest full-year dividend to date, contained detail of several new acquisitions as the company aims to become “the protein partner of choice” in the words of chief executive Philip Heffer.
A highlight from those results was the performance of the company’s Australasian market.
Volumes were up by a third, with revenue soaring by 71 per cent to £1.3bn, aided by the first full year of revenues from former joint venture plants and a new facility in New Zealand which opened in July. European volumes were up slightly on a two-year basis, but operating profit only grew by £400,000 on the continent.
It has certainly been an acquisitive period for Hilton Food. The company penetrated the North American market for the first time by picking up the salmon producer Foppen in March, which it funded through raising £75mn of equity. Meat supplier Fairfax Meadow was bought last October, allowing the company further diversification into the UK food service sector. In the same month the company acquired the other 50 per cent of the vegan and vegetarian proteins producer Dalco, further expanding its offering.
Chair Robert Watson perhaps sensed a good selling opportunity, given the upwards movement in the share price. He disposed of £2.4mn-worth of shares in two tranches, selling 100,000 shares at 1,200p apiece on 21 April and 100,000 shares at 1,199p each on 25 April.
Panmure Gordon analysts said that as the cost of living crisis intensifies the company “is anticipating strong demand for value products, notably mince” and is also forecasting robust demand for some premium items like steak “as consumers eat out less but try to recreate that experience at home”. The broker has the shares trading on 19 times forward 2022 earnings.
YouGov’s chief scientist tests market appetite
YouGov features in our directors’ deals for the second week in succession, although this week’s disposal of more than £2.5mn worth of shares by “chief scientist” Doug Rivers dwarfs finance director Alex McIntosh’s £196,000 sale highlighted last week.
We highlighted the bull case for the company’s shares at the beginning of this year and although they are currently trading about 20 per cent lower year-to-date, it has continued to perform well. Pre-tax profit climbed by 18 per cent in the six months to January 31.
The data-driven pollster is in the final phase of a long-term growth plan whose aims include doubling revenue and growing adjusted earnings per share at a compound rate of more than 30 per cent. Over the past five years, earnings per share has grown by 26 per cent.
On its last earnings call co-founder and chief executive Stephan Shakespeare said YouGov was confident of hitting its goals, citing the “buoyancy” of its sales growth and its ability to control costs. However, he added a caveat about the difficulty in predicting geopolitical and macroeconomic events.
Rivers, a political scientist with a PhD from Harvard, has been with YouGov since it took over his US-based polling start-up Polimetrix in 2007.
YouGov initially paid $7.5mn (£5.9mn) for a 32 per cent stake in 2006 and then handed over $24.1mn for the remaining 68 per cent a year later.
Since then, the Americas has gone on to become the company’s strongest region, generating 46 per cent of revenue and the vast majority of its adjusted operating profit in the half-year period.
Even after the recent sell-off in its shares, YouGov trades at a hefty premium to peers — its enterprise value equates to 28-times cash profit, according to FactSet. In comparison, advertising giant WPP sold its market research arm Kantar for 8.2x cash profit to Bain Capital in 2019, while German competitor GfK was bought by KKR at a multiple of 8.9x in 2016, according to Bloomberg.
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