25th Sep 2007 07:02
Hilton Food Group PLC25 September 2007 Hilton Food Group plc Interim Results for the 28 weeks to 15 July 2007 Continued progress in line with expectations Hilton Food Group plc, the leading specialist meat packing business supplyingmajor international food retailers, is pleased to announce its interim resultsfor the 28 weeks to 15 July 2007. 28 weeks to 28 weeks to 52 weeks to 15 July 2007 16 July 2006 31 Dec 2006 Turnover £305.9m £277.2m £526.7m Operating profit before significant item* £9.6m £9.7m £15.7m Operating profit after significant item* £7.9m £9.7m £15.7m Profit before tax £7.4m £9.6m £15.5m Cash generated from operations before significant £16.3m £16.5m £26.5mitem* Cash generated from operations after significant £14.6m £16.5m £26.5mitem* Basic earnings per share before significant item* 9.4p 9.2p 14.3p Basic earnings per share after significant item* 7.0p 9.2p 14.3p Interim Dividend to be paid in 2.2p December 2007 * the significant item in 2007 relates to costs to the Group associated with theflotation of Hilton Food Group plc on the London Stock Exchange • Successful listing on main market of the London Stock Exchange in May 2007 • Overall volume growth of 17%; turnover growth of 10% • Continued strong cash generation of £16.3m during the period • Major new factory at Huntingdon commissioned on time and on budget • Extension to facility in Zaandam, Holland completed on time and on budget Commenting, Robert Watson, Chief Executive said: "I am pleased to report that the first 28 weeks of 2007 have seen furtherprogress, in line with the Board's expectations, with good volume growth, thecompletion of two key capacity expansion projects and continued strong cashgeneration." Enquiries Hilton Food Group - Robert Watson, Nigel Majewski Tel: 01480 387214 Citigate Dewe Rogerson - Tom Baldock, Fiona Mulcahy, Nicola Smith Tel: 020 7638 7591 INTERIM STATEMENT This is our first Interim Report to shareholders, following the flotation of thecompany on the London Stock Exchange on 17 May 2007. We are pleased to reportthat the first 28 weeks of 2007 have seen continued progress, in line with theBoard's expectations. We were fully aware that the transition from being a private business to onelisted on the main market would be a very challenging process. We would like tothank our professional advisers and particularly our managers and employees who,by continuing to professionally operate the business through this process,achieved a seamless transition. Financial Review The Group is presenting its interim results for the 28 weeks to 15 July 2007,with comparative information for the 28 weeks to 16 July 2006 and the year to 31December 2006. The interim results of the Group are prepared in accordance withInternational Financial Reporting Standards ("IFRS") as adopted by the EU. Underlying trading performance has been satisfactory, with volumes growingoverall by 17%. Further details of volume growth by segment are detailed in theReview of Operations, below. Total Group turnover rose by 10% to £305.9 million, as compared to £277.2million in the corresponding period last year. The increase is below the levelof volume gains, as lower raw material prices have fed directly into lowerselling prices. Due to Hilton's reduced risk and non-integrated business model,where commercial arrangements are made on a margin or packing rate basis, Hiltonsuffers less from movements in raw material costs than under conventional foodmanufacturing models. In line with our expectations, gross profit margins fell back, from 14.7% to14.1%, reflecting principally the impact of negotiations with customers toreflect the higher volume levels going through the business, together with thestart up costs of the new facilities. Operating profit for the first half, at £9.6 million (£7.9m after flotationcosts of £1.7m), was marginally below the operating profit of £9.7m made forthe corresponding period in 2006. Operating profit benefited by £0.4m from therelease of provisions for overseas taxation exposures, which were put in placeprior to the flotation and have now been settled. Net finance costs rose from £0.1m to £0.5m. The increase comprises interest onthe new bank borrowings in the first half of £47.5m, which were put in placeprior to the flotation, but are now reducing; partly offset by the release ofprovisions for interest on overseas taxation exposures, which were put in placebefore the flotation and have since been settled. Profit before taxation was £7.4m (2006: £9.6m). The tax charge for the periodwas £2.2m. Excluding £1.7m of flotation costs, for which taxation relief has notbeen assumed, and the release of £0.8m of provisions for overseas taxationliabilities and interest, for which there is no associated tax charge, theeffective underlying rate of tax was 26%. Basic earnings per share before flotation costs in the first half were 9.4p(2006 9.2p). The board has declared its first interim dividend of 2.2 pence per share,amounting to approximately £1.5 m, which will be payable on 7 December 2007, toshareholders on the register at close of business on 1 November 2007. Cash flow continued to be strong, with the Group generating £16.3m cash (£14.6mafter flotation costs of £1.7m) during the period. This has enabled us tosteadily reduce the level of net debt outstanding at a slightly faster rate thanwe had expected. Accordingly Group borrowings, net of cash balances of £18.4m,stood at £37.6m at 15 July, 2007. Review of Operations Investment in Capacity Expansion Modern, well-invested facilities are a key competitive advantage for Hilton,which operates a high volume business where it is imperative to keep unit costslow. Over the three years to December 2006 capital expenditure on our facilitieshas totalled £57m, £44m of which has been spent on major capacity expansionprojects. We are pleased to report that two of these projects, at Huntingdon in the UK andZaandam in Holland, were completed during the first half of the year on time, onbudget and with minimal disruption to production at either site. In the UK a new purpose built factory at Huntingdon was completed that willenable Hilton to service its customer's expected growth over the medium term.The factory is producing packed minced meat, burger, kebab and other value addedproducts. The new facility will increase total volume capacity at Huntingdon byapproximately 50%. In Holland, the completion and commissioning in early 2007 of a factoryextension in Zaandam to service its customers expected growth over the mediumterm, will increase capacity by approximately 50%. Western Europe Continued progress was made across our Western European operations in the UK,Ireland, Holland and Sweden with our customers continuing to achieve organicgrowth. Volume growth was 10%, with turnover growth of 6%, reflecting lower rawmaterial prices. This was achieved despite the exceptionally adverse summerweather in the UK, which affected sales of barbecue and other seasonal lines. Other Regions In Central Europe, we saw a first time contribution from our facility inSouthern Poland (near to the Czech border), producing on average approximately200 tonnes per week. Ahold's divestment of its Polish stores is being largelyoffset by continuing volume growth in the Czech Republic, where it has retainedits stores. We continue to work closely with our customers in each country to deliver highservice levels, consistent quality and product innovation. Employees The continued progress made by the Group in the first 28 weeks of 2007, andthroughout the lengthy flotation process, is attributable to the strength of thededicated workforces we have in place in each country and, on behalf of theBoard, we would like to thank them for their continuing commitment, enthusiasmand expertise. Outlook Continuing growth across our business has been achieved in line with the Board'sexpectations, despite the extremely wet summer weather in Western Europeaffecting buying patterns at our customers' retail outlets. Current trading isin line with expectations for the Group and the Board believes the outlookremains as such for the remainder of the year. Looking forward, the Group is aligned with successful customers in growingmarkets, with empowered and highly professional management teams and sufficientpacking capacity in place to service our customers expected medium term growthplans. With Hilton's strong cash flow and a proven track record of setting up newfacilities for customers in new geographical locations, underpinned by extensiveprocurement, packing and packaging expertise, it is well placed to develop newbusiness opportunities, as and when they arise. Gordon Summerfield CBE, Chairman Robert Watson OBE, Chief Executive Condensed consolidated interim income statement Unaudited Unaudited Audited 28 wks 28 wks Year ended ended ended 15 July 16 July 31 December 2007 2006 2006 Continuing operations Note £'000 £'000 £'000Revenue 5 305,852 277,158 526,663Cost of sales (262,604) (236,350) (452,047)Gross profit 43,248 40,808 74,616Distribution costs (3,359) (3,077) (5,990)Administrative expenses (30,291) (28,044) (52,927)Restructuring and flotation costs 6 (1,687) - -Operating profit 5 7,911 9,687 15,699Finance income 220 172 824Finance costs (749) (298) (1,038)Finance costs - net (529) (126) (214)Profit before income tax 7,382 9,561 15,485Income tax expense 10 (2,157) (2,780) (4,824)Profit for the half year 5,225 6,781 10,661 Attributable to:Equity holders of the company 4,874 6,395 9,986Minority interest 351 386 675 5,225 6,781 10,661 Earnings per share for profit attributable to the equityholders of the company- Basic and Diluted (pence) 12 7.0 9.2 14.3 Dividend per share in respect of the financial period (pence)- Dividend per share paid during the period 35.5 6.0 6.0- Dividend per share proposed in respect of the period 2.2 - - The notes form an integral part of this condensed interim financial information Condensed consolidated interim balance sheet as at 15 July 2007 Unaudited Audited 15 July 16 July 31 December 2007 2006 2006 Note £'000 £'000 £'000AssetsNon-current assetsTangible and Intangible Assets 7 47,851 39,591 47,523Deferred income tax assets 1,274 1,099 1,219 49,125 40,690 48,742Current assetsInventories 9,776 9,298 9,525Trade and other receivables 46,780 42,664 41,037Cash and cash equivalents 18,373 23,613 22,327 74,929 75,575 72,889Total assets 124,054 116,265 121,631 Capital and reserves attributable to equity holders of thegroupShare capital 8 6,966 200 200Other reserves (77) 25 (102)Retained earnings 9,625 25,860 29,451 16,514 26,085 29,549Reverse acquisition reserve (31,700) - -Merger reserve 919 - - (14,267) 26,085 29,549Minority interest in equity 454 982 1,288Total equity (13,813) 27,067 30,837LiabilitiesNon-current liabilitiesBorrowings 9 48,517 9,567 10,196Deferred income tax liabilities 1,244 860 1,300Other non-current liabilities 1,248 2,034 1,850 51,009 12,461 13,346Current liabilitiesBorrowings 9 7,459 2,812 6,065Trade and other payables 77,131 71,247 69,740Current income tax liabilities 2,268 2,678 1,643 86,858 76,737 77,448Total liabilities 137,867 89,198 90,794Total equity and liabilities 124,054 116,265 121,631 The notes form an integral part of this condensed interim financial information Condensed consolidated interim statement of changes in equity Attributable to equity holders of the company Note Share Other Retained Sub Reverse Merger Total Minority Total capital reserves earnings total Acquisition reserve interest equity reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 200 (31) 23,665 23,834 - - 23,834 1,179 25,013 Currency translation differences - 56 - 56 - - 56 (33) 23Profit for the half year - - 6,395 6,395 - - 6,395 386 6,781Total recognised income and expense for the 28 wks ended 16 July 2006 56 6,395 6,451 - - 6,451 353 6,804 Dividend paid 11 - - (4,200) (4,200) - - (4,200) (550) (4,750) Balance at 16 July 2006 200 25 25,860 26,085 - - 26,085 982 27,067 Balance at 1 January 2007 200 (102) 29,451 29,549 - - 29,549 1,288 30,837 Currency translation differences - 25 - 25 - - 25 3 28Profit for the half year - - 4,874 4,874 - - 4,874 351 5,225Total recognised income andexpense for the 28 wks ended 15 July 2007 - 25 4,874 4,899 - - 4,899 354 5,253 Dividend paid 11 - - (24,700) (24,700) - - (24,700) (1,039) (25,739)Reverse acquisition of Hilton 6,700 - - 6,700 (31,700) - (25,000) - (25,000)Foods LimitedAcquisition of minority 66 - - 66 - 919 985 (149) 836shareholding Balance at 15 July 2007 6,966 (77) 9,625 16,514 (31,700) 919 (14,267) 454 (13,813) The notes form an integral part of this condensed interim financial information Condensed consolidated interim cash flow statement Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 16 July 31 December 2007 2006 2006 £'000 £'000 £'000 Cash flows from operating activitiesCash generated from operations 14,608 16,471 26,481Interest paid (1,116) (298) (490)Income tax paid (1,643) (1,616) (4,380)Net cash generated from operating activities 11,849 14,557 21,611 Cash flows from investing activitiesPurchase of property, plant and equipment (6,854) (7,580) (20,028)Proceeds from sale of property, plant and equipment 1,948 1,307 2,228Government grant received 32 - -Purchases of intangible assets (130) - (834)Interest received 220 172 764Net cash used in investing activities (4,784) (6,101) (17,870) Cash flows from financing activitiesFinance lease payments - principal (38) (21) (172)Proceeds from borrowings 47,500 617 4,810Repayments of borrowings (5,592) (1,508) (3,682)Dividends paid to company shareholders (24,700) (4,200) (4,200)Dividends paid to minority interests (1,039) (550) (545)Reverse acquisition of Hilton Foods Limited (25,000) - -Net cash used in financing activities (8,869) (5,662) (3,789) Net (decrease)/increase in cash, cash equivalents andbank overdrafts (1,804) 2,794 (48)Cash, cash equivalents and bank overdrafts at start of 20,133 20,402 20,402periodExchange gains/(losses) on cash, cash equivalents andbank overdrafts 44 2 (221)Cash, cash equivalents and bank overdrafts at end of 18,373 23,198 20,133periodBank overdrafts - 415 2,194 Cash and cash equivalents at end of period 18,373 23,613 22,327 The notes form an integral part of this condensed interim financial information Notes to the interim financial information 1. General Information Hilton Food Group plc ("the company") and its subsidiaries (together "thegroup") is a specialist meat packing business supplying major international foodretailers in five European countries. The Company was incorporated on 16 March 2007 as Law 2461 Limited and changedits name to Hilton Food Group plc (see note 4) and re-registered as a publiclimited company on 17 April 2007. The company is a limited liability companyincorporated in and registered in the UK. The address of the registered officeis 2-8 The Interchange, Latham Road, Huntingdon Cambridgeshire PE29 6YE. The company has its primary listing on the London Stock Exchange and wasadmitted to the Official List and to trading on 17 May 2007. This condensed consolidated interim financial information was approved for issueon 24 September 2007. These interim financial results do not comprise statutory accounts within themeaning of Section 240 of the Companies Act 1985. Statutory accounts for theyear ended 31 December 2006 for Hilton Foods Limited (the previous parentcompany to the group) were approved by the Board of directors on 23 April 2007and delivered to Companies Registry, Belfast. The report of the auditors onthose accounts was unqualified, did not contain an emphasis of matter paragraphand did not contain any statement under Section 237 of the Companies Act 1985. 2. Basis of preparation This condensed consolidated interim financial information for the 28 weeks ended15 July 2007 has been prepared in accordance with the Listing Rules of theFinancial Services Authority and with IAS 34, 'Interim financial reporting' asadopted by the European Union. The interim condensed consolidated financialreport should be read in conjunction with the annual financial statements ofHilton Foods Limited (see note 4) for the year ended 31 December 2006 which havebeen prepared in accordance with IFRSs as adopted by the European Union. 3. Accounting Policies The accounting policies adopted are consistent with those of the annualfinancial statements of Hilton Foods Limited (the previous parent company to thegroup) for the year ended 31 December 2006, as described in those annualfinancial statements. The following new standards, amendments to standards or interpretations aremandatory for the first time for the financial year ending 31 December 2007. • IFRIC 7, 'Applying the restatement approach under IAS 29', effective for annual periods beginning on or after 1 March 2006. This interpretation is not relevant for the group. • IFRIC 8, 'Scope of IFRS 2', effective for annual periods beginning on or after 01 May 2006. This interpretation has not had any impact on the recognition of share-based payments in the group. • IFRIC 9, 'Reassessment of embedded derivatives', effective for annual periods beginning on or after 01 June 2006. This interpretation has not had a significant impact on the reassessment of embedded derivatives as the group already assessed if embedded derivative should be separated using principles consistent with IFRIC 9. • IFRIC 10, 'Interims and impairment', effective for annual periods on or after 01 November 2006. This interpretation has not had any impact on the timing or recognition of impairment losses as the group already accounted for such amounts using principles consistent with IFRIC 10. • IFRS 7, 'Financial Instruments: Disclosures', effective for annual periods beginning on or after 01 January 2007. IAS 1, 'Amendments to capital disclosures', effective for annual periods beginning on or after 01 January 2007. As this interim report contains only condensed financial statements, and as there are no material financial instrument related transactions in the period, full IFRS 7 disclosures are not required at this stage. The full IFRS 7 disclosures, including the sensitivity analysis to market risk and capital disclosures required by the amendment of IAS 1, will be given in the annual financial statements. The following new standards, amendments to standards and interpretations havebeen issued but are not effective for the financial year ending 31 December 2007and have not been adopted: • IFRIC 11, 'IFRS 2 - Group and treasury share transactions', effective for annual periods beginning on or after 01 March 2007. Management do not expect this interpretation to be relevant for the group. • IFRIC 12, 'Service concession arrangements', effective for annual periods beginning on or after 01 January 2008. Management do not expect this interpretation to be relevant for the group. • IFRS 8, 'Operating segments', effective for annual periods beginning on or after 01 January 2009, subject to EU endorsement. Management do not currently foresee any changes to the group's business segments. 4. Reverse acquisition On 30 March 2007 the company became the holding company of Hilton Foods Limited.Under IFRS 3, Business Combinations, this group reconstruction has beenaccounted for as a reverse acquisition. Although this consolidated financialinformation has been issued in the name of the legal parent, the company, itrepresents in substance a continuation of the financial information of the legalsubsidiary Hilton Foods Limited. The following accounting treatment has beenapplied in respect of the reverse acquisition. a) the assets and liabilities of the legal subsidiary, Hilton Foods Limited,are recognised and measured in the consolidated financial information at thepre-combination carrying amounts, without restatement to fair value; b) the retained earnings and other equity balances of Hilton Foods Limitedimmediately before the business combination, and the results of the period from1 January 2007 to the date of the business combination are those of Hilton FoodsLimited as the company did not trade prior to the transaction. However, theequity structure appearing in the consolidation financial information reflectsthe equity structure of the legal parent, Hilton Food Group plc, including theequity instruments issued to effect the business combination and c) comparative numbers presented in the consolidated financial information arethose reported in the consolidated financial information of the legalsubsidiary, Hilton Foods Limited, for the 28 weeks to 16 July 2006 and the yearended 31 December 2006 The company had no significant assets or liabilities immediately prior to thetime of the reverse acquisition. As part of the reverse acquisition, 69,000,000new 10p shares were issued to the members of Hilton Foods Limited together witha cash payment of £25m. In the books of the legal parent, Hilton Food Group plc,a merger reserve of £70.1m has arisen as a premium on the shares issued. Onconsolidation this merger reserve has formed part of the reverse acquisitionreserve amounting to £31.7m. 5. Segmental information Total segment revenue Operating profit / Segment result £'000 £'000 Unaudited Western Europe 293,335 7,44528 weeks ended Other 12,517 466 15 July 2007 Total 305,852 7,911 Unaudited Western Europe 277,158 9,68728 weeks ended Other - - 16 July 2006 Total 277,158 9,687 Audited Western Europe 517,915 15,411year ended Other 8,748 288 31 December 2006 Total 526,663 15,699 There are no significant seasonal fluctuations. 6. Restructuring and flotation costs During the 28 weeks ended 15 July 2007 costs of £1.7m were incurred in relationto the restructuring of the group and admission of the company to the OfficialList. 7. Capital Expenditure Tangible and intangible assets Unaudited Unaudited Audited 28 wks 28 wks yr ended ended ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000 Opening net book amount 47,523 37,829 37,829Exchange adjustments 95 341 (16)Additions 7,819 7,580 21,118Disposals (1,948) (1,307) (2,259)Depreciation and amortisation (5,638) (4,852) (9,149)Closing net book amount 47,851 39,591 47,523 Additions principally comprise completion of new facilities in the UK and theNetherlands and goodwill (see note 13). 8. Share capital Number of Shares Ordinary Ordinary Ordinary Total (thousands) Shares Shares Shares 'A' 'B' £'000 £'000 £'000 £'000 Opening balance 1 January 2006 and at 16 July 2006 200 100 100 - 200Opening balance 1 January 2007 200 100 100 - 200Equity shares issued 69,657 - - 6,966 6,966Reverse acquisition of shares in Hilton Foods (200) (100) (100) - (200)LimitedAt 15 July 2007 69,657 - - 6,966 6,966 The company issued 69,000,000 shares to the members of Hilton Foods Limited aspart of the reverse acquisition. The company issued 656,667 shares inconsideration for the acquisition of a 2.5% stake in Hilton Food Group (Europe)Limited (see note 13). 9. Borrowings Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000Current 7,459 2,812 6,065Non-current 48,517 9,567 10,196Total borrowings 55,976 12,379 16,261 Movements in borrowings is analysed as follows: Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000 Opening amount 16,261 13,711 13,711New borrowings - reorganisation 47,500 - -New borrowings - working capital - 617 4,810Repayment of borrowings (7,785) (1,949) (2,260)Closing amount 55,976 12,379 16,261 The group borrowed £47.5m to fund group reorganisation and is repayable inquarterly instalments of £1.65m including capital and interest. Interest ischarged at LIBOR plus 0.75% to 1.25%. 10. Income tax expense Income tax expense is recognised based on management's best estimate of theweighted average annual income tax rate expected for the full financial year.The estimated average annual tax rate used for 2007 is 29.2% (2006: 29.1%). Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000 UK Taxation 738 1,367 2,081Overseas Taxation 1,419 1,413 2,743Total Income tax expense 2,157 2,780 4,824 11. Dividends Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000 Dividends paid on ordinary shares 35.5p perordinary share (2006: 6.0p) 24,700 4,200 4,200 The dividend of £24.7m was paid during the period to shareholders as part of therestructuring prior to Listing. In addition, the directors propose an interimdividend of 2.2 pence per share payable on 7 December 2007 to shareholders whoare on the register at 1 November 2007. This interim dividend, amounting to£1.5m has not been recognised as a liability in this interim financial report. 12. Earnings per share Basic and diluted earnings per share are calculated by dividing the profitattributable to equity holders of the company by the weighted average number ofordinary shares in issue during the year. Unaudited Unaudited Audited 28 wks ended 28 wks ended year ended 15 July 2007 16 July 2006 31 December 2006 Profit attributable to equity holders of the company (£'000) 4,874 6,395 9,986Weighted average number of ordinary shares in issue 69,657 69,657 69,657(thousands)Basic and diluted earnings per share (pence) 7.0 9.2 14.3 Basic and diluted earnings per share before restructuring andflotation costs (pence) 9.4 9.2 14.3 Basic EPS has been adjusted for restructuring and flotation costs as these aresignificant one-off costs that are not expected to recur. The adjusted EPS of9.4p reflects the underlying performance of the company. 13. Business combination On 24 April 2007, the group acquired 2.5% of the share capital of Hilton FoodGroup (Europe) Limited in consideration for 656,667 ordinary shares in thecompany at a value of £985,000 bringing its total shareholding to 100%. Details of net assets acquired and goodwill are as follows: £'000 Purchase consideration - fair value of equity shares issued 985 Existing minority interest 149 Goodwill 836 14. Related party transactions Ultimate controlling parties of the Group for part of the half-year were alsoshareholders of Heffer Investments Limited, Hilton Meats (International) Limitedand Foyle Food Group Limited. The companies noted below are all deemed to be related parties by way of commondirectors in addition to shareholder status as noted above. The following purchases were made from related parties during the half-year: Unaudited Unaudited Audited 28 wks 28 wks Year ended ended ended 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000Hilton Meats (International) Limited 37,501 29,468 72,048Romford Wholesale Meats Limited 23,963 22,625 43,383RWM Dorset Limited 6,634 6,614 11,295Foyle Food Group Limited 9,253 10,222 17,909 Amounts owing to related parties at the half-year end were as follows: Unaudited Unaudited Audited 15 July 2007 16 July 2006 31 December 2006 £'000 £'000 £'000 Hilton Meats (International) Limited 4,688 4,033 4,636Romford Wholesale Meats Limited 2,995 2,183 2,509RWM Dorset Limited 829 685 787Foyle Food Group Limited 1,592 1,057 2,265 The ultimate shareholders of all the above companies have an interest in theshare capital of the company. 15. Events since the balance sheet date Since the balance sheet date, the group has entered into a £4m finance leasewith a 25 year term which is in respect of land and buildings in the UK. Independent review report to Hilton Food Group plc Report on review of interim financial information Introduction We have been instructed by the company to review the financial information forthe 28 weeks ended 15 July 2007 which comprises the condensed consolidatedinterim income statement for the 28 weeks ended 15 July 2007, the condensedconsolidated interim balance sheet as at 15 July 2007 and the related condensedconsolidated interim statements of changes in equity and cash flow for the 28weeks then ended and the related notes. We have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The Listing Rulesof the Financial Services Authority require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. This interim report has been prepared in accordance with the InternationalAccounting Standard 34, 'Interim financial reporting'. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance than anaudit. Accordingly we do not express an audit opinion on the financialinformation. This report, including the conclusion, has been prepared for andonly for the company for the purpose of the Listing Rules of the FinancialServices Authority and for no other purpose. We do not, in producing thisreport, accept or assume responsibility for any other purpose or to any otherperson to whom this report is shown or into whose hands it may come save whereexpressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the 28 weeks ended15 July 2007. PricewaterhouseCoopers LLPChartered AccountantsBelfast24 September 2007 The maintenance and integrity of the Hilton Food Group plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Hilton Foods