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Where things are made has been a hot topic around the globe this week. Britain has long since waved goodbye to most of its manufacturing (services now accounts for about four-fifths of the economy) and of the industry that remains, it’s not all widgets and aeroplane wings. In fact, the UK’s single biggest manufacturing sector is food.
Listed companies in the sector include Greencore, maker of roughly 750mn sandwiches and 152mn salads each year, along with quiches, soups and ready meals for supermarkets and eateries. It’s planning to gobble up rival Bakkavor to create a convenience food business with a combined revenue of about £4bn.
Cranswick is a farm-to-fork producer of pork, chicken and prepared meats, such as sausages. It also owns brands including Cypressa olive oil. Multi-protein manufacturer Hilton Foods’ core business is red meats with Tesco being a major customer. It also has a meat-free proteins unit and a seafood division.
All of these food producers share problems in common, chiefly around managing supply chain risks and volatile and rising costs, while meeting customer demands for competitive prices and security of supplies. Additional strains are climate change and the nation’s net zero ambitions. Cranswick’s plans to build a mega chicken and pig farm in Norfolk were blocked this month on the grounds it would be environmentally damaging, a decision Cranswick has condemned as harmful for “the sustainable production of British meat”.
What investors like about Hilton Foods is its multi-category expertise and broad geographic exposure. The UK & Ireland accounts for 37 per cent of sales, Europe 26 per cent and Australia and New Zealand 37 per cent and the company’s recent expansion into Canada and Saudi Arabia through joint ventures underlines how new markets offer plenty of growth potential.
BUY: HILTON FOODS (HFG)
A flat top line disguised a decent set of results from Hilton Foods — a processor of meat, fish and other protein products for supermarkets, writes Michael Fahy.
Although prices were lower, volumes grew and adjusted pre-tax profit rose 17 per cent to £76mn. Reported pre-tax profits rose 15 per cent to £61mn, helped by insurance proceeds from a 2021 fire, hindered by the writing off of the entire £9.8mn carrying value of the goodwill linked to its deal for Dalco, a Netherlands-based maker of vegan and vegetarian products.
A valuation of 13.5 times forecast earnings — a discount to the 10-year average of 22 times, according to FactSet — means while its shares have fallen in the past year, a re-rating is deserved.
BUY: Churchill China (CHH)
The market responded positively to Churchill China’s full-year figures, despite falling sales and profits, writes Mark Robinson.
David O’Connor, chief executive, said that although the ceramics manufacturer was still seeing softening demand, “yields have improved, and we see further opportunities for significant savings”.
The group has managed to take market share, “albeit within a contracting market”. Cost savings and outperformance are to be applauded.
It is possible the global tariff dispute will stymie demand. But any impact should be modest, as the ceramics industry is already lumbered with a 28 per cent levy.
Investec is seeing flat adjusted earnings of 58p a share, rising to 62.8p in 2026.
HOLD: JTC (JTC)
JTC, a provider of fund administration services, says it wins new clients when markets are buoyant, but generates more work from existing customers when conditions deteriorate. Unfortunately, investors don’t seem convinced. The stock is down by more than a fifth since January, writes Jemma Slingo.
JTC increased revenue by 19 per cent to £305mn last year, more than half of which growth was organic. New business hit a record £36mn, cash conversion was strong at 98 per cent, and underlying operating profit rose 18 per cent to £71.6mn.
Still, though underlying profit before tax came in at a healthy £47.4mn, the company reported a statutory loss before tax of £7.4mn.
