Hillsdown sticks with diverse menu
Friday 05 September 1997
But the City will forgive him much more than this if he can kick-start a company whose shares have underperformed the market by 34 per cent in the past three years. On yesterday's evidence, there is a way to go yet.
With his strategic review completed, it is clear there will be no radical shake-up of the Hillsdown portfolio, which still includes a diverse spread of businesses, including Typhoo tea, ready-made meals and Fairview Homes. There are no plans to sell the non-food businesses. Instead Hillsdown plans to withdraw from its red meat operations and sell a host of other businesses in packaging and leather with total assets of pounds 85m. Talks on deals are well advanced and the company is planning a pounds 30m write-down in the full-year figures.
But, looking at Hillsdown's half-year figures, it is clear that there are potential dangers ahead. Pre-tax profits for the six months to June rose from pounds 44m to pounds 57m. But at the operating level, profits at three of the four food businesses fell. The figures were rescued by a strong performance from the furniture and house-building businesses, which are clearly benefiting from the upswing in the economic cycle.
The worry is that when the economy comes off the boil, Hillsdown will hit the buffers unless its food businesses can start generating growth. At the moment they are very much a mixed bag. The chilled business is performing well, poultry was badly affected by a freak viral outbreak in the sector which cost pounds 2.5m, and the grocery businesses are struggling.
On forecasts of pounds 165m, the shares, up 6p to 169.5p yesterday, trade on a forward rating of just 10. This is a substantial discount to the sector, while a yield of more than 6 per cent provides support.
But the City will want to see more evidence of growth in food before the shares enjoy a re-rating. Potentially a good bet, but perhaps too early to chase just now.
- 1 Scientists create transparent mouse complete with see-through organs
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Amazonian Indian tribe filmed making contact with Brazil village in rare video footage
Mystery of the Siberian holes at the end of the world 'solved': Scientists offer explanation
Pope Francis issues top 10 tips for happiness
Kenny Ireland dead: Benidorm actor dies aged 68
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...