Hilton Foods sees FY operating profit below expectations

Hilton Food Group warned on Tuesday that full-year operating profits would be below its expectations due to challenges in the UK seafood business and the wider macroeconomic environment.

In its Autumn trading update, the company said volume and revenue have been in line with its expectations, with continued growth in revenue versus the same period a year earlier, although inflationary pressures are providing a headwind.

Trading in APAC has been in line, it said, with the New Zealand food park continuing to make "excellent" progress. In Europe, meanwhile, the company’s single customer facilities performed well, with revenue ahead of the previous year, mainly due to higher input prices. Hilton highlighted particularly strong trading in its Scandinavian and Central European markets.

In the group’s European multi-customer businesses, overall trading conditions have improved, it said, with the company instigating a number of cost savings initiatives and continued investments in automation.

As far as the UK seafood business is concerned, Hilton said it continues to work closely with its retail partners and has made good progress in either mitigating or passing through unprecedented inflationary costs. "However, with this occurring at a slower pace than anticipated, the process is not fully complete, and will continue for the rest of this year and into early 2023," it said.

As a result, operating profit for the year is now set to be below the group’s expectations.

"Despite this the board remains confident that the business is well placed for 2023, with the group's financial position continuing to be strong, with leverage remaining at comfortable levels," it said.

"We have made good progress in ongoing discussions regarding geographic expansion and continue to explore opportunities for growth in our existing markets as we deliver on our strategy of becoming the protein partner of choice."