Hillsdown dashes investors' hopes

HILLSDOWN, the food group best known for the Typhoo tea brand, yesterday dashed investors' hopes of a share buy-back or special dividend after market conditions forced it to scrap plans to sell its furniture and potato divisions, writes Peter Thal Larsen.

"It seems unlikely, in current market conditions, that we will be able to achieve a major disposal, which would be a necessary requirement before we would recommend a return of cash to shareholders," said Michael Teacher, Hillsdown chief executive.

The news effectively stalls Hillsdown's restructuring, which began last year when the company spun off housebuilder Fairview and the Terranova chilled foods business.

Meanwhile Sir John Nott, the former defence secretary, announced that he would be retiring as chairman after the annual meeting in May. He will be replaced by Peter Jacobs, the former chief executive of British Sugar and Bupa.

In the year to December Hillsdown reported a fall in operating profits from continuing activities to pounds 80.2m from pounds 100.5m. Trading profits in the core grocery business rose 4 per cent to pounds 57.4m. The shares closed up 3.5p at 73.5p.