The reason is devaluation, as Hazlewood makes more than a third of its profits in the Netherlands and there were hopes of huge benefits from the translation of overseas profits.
These turned out to be slightly disappointing. Pre-tax profits of pounds 55m, up by 7 per cent, included pounds 2.7m from currency translation but these were offset by the pounds 1.4m reduction in the value of sterling, lira and peseta debtors of the Dutch subsidiary.
There were several other special factors. On the negative side there was the pounds 2.4m cost of lower food prices following last year's glut, a pounds 1m change in depreciation policy and a pounds 1m cost of a product recall.
The bonuses were pounds 2.9m from the inclusion for a full year of acquisitions made earlier, a pounds 2.6m recovery in the supply of cockles and the pounds 1.3m benefit of a 53-week year.
Stripping these out left profits up by about 5 per cent on 7 per cent volume growth, which looks reasonable. The total dividend is 6.4p, up 5 per cent.
Its European exposure, however, could work against Hazlewood this year as the Dutch business is feeling the effects of recession in Germany and elsewhere. The company has already seen a fall in demand for fish and expects slower growth on the Continent than it has seen in recent years.
Its acquisition plans may also be trimmed, with borrowings at 95 per cent of shareholders' funds at the year-end. Gearing has since fallen to 85 per cent with the sale of the Luijckx chocolate business but is still high. Interest cover was however comfortable at more than five times.
That said, the shares are still trading on less than 10 times earnings , assuming a similar growth rate this year. The temptation to take profits should be resisted and the shares should be bought.
Chance to nurse an up-market share
THERE are nursing homes and nursing homes. Investors in the fast- emerging nursing home sector of the stock market can now choose from a broader range of operating styles with the flotation of Court Cavendish.
Founded just five years ago with two homes and 100 beds, Court Cavendish addresses the higher end of the pounds 7bn care market. Some 59 per cent of its patients are either wholly or partly privately funded and it deliberately aims for a 'country house feel' in its purpose-built nursing and residential homes.
Its average fees of pounds 307 a week are some way above the sums provided by the Department of Social Security or the equivalent by local authorities under the new Community Care legislation.
This differs from more established, although very successful, companies like Takare which aim to operate at DSS fee levels in uniform, purpose- built homes without any top-ups from private money. Westminster Health Care, a recent stock market entrant, lies somewhere between Takare and Court Cavendish.
Court Cavendish has hit a financing constraint in exploiting a market growing at between 3.5 per cent and 5 per cent a year. Armed with the pounds 45m almost entirely new money to be raised from the flotation, Court expects to add 500 beds to its existing 1,200.
Although demanding, the pricing of the shares is not greedy. A p/e of 15.2 and a yield of 2 per cent are a useful discount to both Westminster and the industry leader Takare. A genuine growth opportunity.Reuse content