Hilton chairman’s praise for town’s seafood giant
24th October 2017
HILTON Food Group chairman Colin Smith OBE has written to the FTSE-listed giant’s shareholders, telling of the board’s unanimous backing for the purchase of Icelandic Seachill, and outlining exactly why it has made the offer.
The Lincoln-born former Safeway financial director and chief executive, who went on to chair Poundland for a decade, has led the board at Hilton for more than a year, having served as director since 2010.
Setting out the details of the £80.8 million offer ahead of seeking approval at a meeting on November 6 to complete, Mr Smith described the Grimsby business in glowing terms, praising leadership and highlighting the opportunity seafood offers.
He said: “The chilled seafood market within Great Britain has displayed resilient growth evidenced by a 20 year track record of increasing market value. Customers see it as a key category with 80 per cent of shoppers buying chilled seafood.
“Founded in 1998, Seachill has grown to be one of the largest chilled fish processors in the UK, with well-invested facilities and a well-established supply chain based in Grimsby. Under Simon Smith, who will lead the business as a division within Hilton going forward, the business has performed well over a number of years, operating from three sites in the area and supplying a number of leading food retail customers in the UK.”
He told how Seachill has “successfully innovated and developed new products including The Saucy Fish Co brand, which is the largest chilled wet fish brand in the UK”.
Within two hours of announcing the agreement with Icelandic Group, the company had secured £55.9 million through a new share issue to part-fund the deal, which will also be put to shareholders next month.
Awarded an OBE in January 2011 for his services to Assured Food Standards, the organisation behind the Red Tractor mark, Mr Smith is a Fellow of the Institute of Chartered Accountants. He underlined the strong synergy of the two businesses with the UK’s leading retailer.
“Seachill’s largest customer, Tesco, accounts for approximately 80 per cent of its net sales and there is consequently significant reliance on one customer relationship,” he said. “As Tesco is also one of the company’s principal customers, it is expected that the acquisition will strengthen the company’s existing relationship with Tesco through the supply of a new product category.”
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Hilton, a leading specialist international meat packing business, supplies major international retailers from its state-of-the-art three-factory base in Huntingdon, Cambridgeshire.
Established in 1994, it was set up to operate a beef and lamb central meat packing facility “Hilton has grown rapidly and now has six factories across Europe plus a joint venture which allows our products to be sold in supermarkets across 14 European countries,” Mr Smith said. Hilton has a further two factories operating in Australia in a joint venture with leading retailer Woolworths, and a third it will wholly own being built.
“To date, the group has been focused on the processing of meat, and this will remain at the core of the business in the future,” he said.
“However, working with our customers, it is clear that they have an interest in the prospect of Hilton processing and supplying other proteins beyond red meat, based on our expertise in sourcing, assembling, packing and distribution.
“This as an attractive and sustainable area to develop and grow Hilton’s business, and our initial discussions with key customers supports this view.
“As a result, (the) board believes that the acquisition of Seachill, the number two player in the UK fish market, presents an attractive and relatively low risk entry into the processing and supply of fish in the UK. This is a new category for the group and it is an attractive growth opportunity.”
News Courtesy: www.humberbusiness.com