Hilton Food Group Has Significant Potential in Central Europe: Shore Capital

Shore Capital said in a note this week that it recently visited Hilton Food Group’s (LON: HFG) Central Europe Factory (HFCE), its manufacturing facility based in the Silesia region of Southern Poland.

According to Shore Capital, the factory opened in 2006 and now has customers such as Fresh Meat, Rimi, and Tesco. The capabilities of the HFCE were said to have been “materially extended” in 2018.

“The scale of the long-term potential across Central Europe is significant in our view,” stated Shore Capital, noting it currently supplies a mix of products across eight countries.

They add that the site currently consists of 11 lines of Fresh Meat and eight lines of Fresh Food. “The rapid growth in FF [is] reflected in the 13% share of site volumes in 2019, expected to be a little over 50% in 2025,” adds the firm.

“We estimate the site makes a combined profit contribution in the high single/low double-digit millions – so similar in scale to the Hilton Foods Holland site,” states Shore Capital.

Despite the positives, Hilton Food’s shares have struggled so far this year, down over 4%. However, over the last 12 months, it has gained more than 11%, currently trading around the 887p mark.