HILLSDOWN Holdings is increasing the dividend payout to shareholders as a mark of confidence in its future prospects, the international food group announced yesterday.

Pre-tax profits in 1994 of #172.3m turned into losses last year of #11.1m following the write-off of #142.2m goodwill previously written off through reserves relating to the sale of Maple Leaf Foods.

The group said that deal had strengthened the group's financial base and enabled the company to focus its attentions on Continental Europe.

Shareholders are to be paid a total dividend 0.3p higher at 0.5p on losses per share of 6.6p against earnings per share of 14.5p.

Chairman Sir John Nott said: ``Our earnings suffered during the year as a result of an exceptional surge in input costs in the early part of the year and from a poor third quarter, caused primarily by the very hot summer.

``But November and December produced excellent trading and strong sales have continued in the first two months of this year. The outlook for 1996 is, therefore, encouraging.''

Sir John stressed the earnings performance itself did not justify an increase in the final dividend, but he remained confident profits would rise following various changes within the group.

He said Hillsdown had consolidated its market share of jam, pickles, continental salads, potato merchanting, poultry, fruit and eggs, canning and upholstered furniture.

Its German, Danish and Dutch chilled food companies had gone from strength to strength and the recent acquisition of Magdis, a leading chilled food producer in France, would give Hillsdown a strong foothold in the market.

While restructuring efforts last year left Hillsdown with a pre-tax loss, analysts now see these exceptional costs lessening. ``They are slowly becoming more reliable and seem to be through the main part of their repositioning,'' said Tim Potter, food analyst at Merrill Lynch.

``The results were reassuringly in line, they are talking about a good start to the current year so all in all its encouraging,'' he added.