The resignation of Hilton Food Group CEO Steve Murrells, with immediate effect, appeared to appease investors this week as the stock perked up after a difficult autumn.
Murrells’ departure, announced early on Tuesday morning, prompted a 5% bounce in shares – a rare moment of respite for a company whose share price has nearly halved over the past year.
Shares in Hilton now trade at 506p, up from this week’s low of 477.5p – but down on the roughly 830p-870p level it had enjoyed until early September, when the first of two major profit warnings rocked confidence in the company.
The company’s woes centre around a shutdown at its Greek smoked salmon factory, prompted by US restrictions. Approvals have since been delayed by the US government shutdown, and the facility is not expected to reopen until next year.
A second profit warning in early November revealed the shutdown would knock £72m-£75m off the protein giant’s pre-tax profits in FY2025, and has led the company to be “more cautious” in its 2026 outlook.
“While demand issues were arguably out of Murrells’ control, the board might have felt the lacklustre share price progression since 2024 was indicative of a company whose earnings growth has gone stale,” said AJ Bell head of markets Dan Coatsworth.
Despite Murrells’ abrupt departure, market analysts have been sanguine about the company’s prospects. Panmure Liberum’s Anubhav Malhotra called the resignation an “opportunity for a fresh start”.
“The departure of CEO Steve Murrells is unfortunate, but it likely reflects the operational challenges and share price decline seen in recent months,” he said.
“Despite the recent issues, we note that Hilton Foods made significant progress during Mr Murrells’ two-year tenure, including expansion into Canada and Saudi Arabia, deeper client relationships, stepped-up operational efficiency and automation, sale of a strategic stake in Foods Connected and disposal of Fairfax Meadow.
“With the strategic review well progressed, the timing allows a new CEO the opportunity to make a fresh start and double down on execution.”
While Murrells’ replacement is found, experienced industry hand and chairman Mark Allen has stepped in to lead the company as interim executive chairman.
Allen’s credentials as former CEO of Dairy Crest and non-executive director on multiple listed boards have earned him analysts’ respect, with Shore Capital’s Clive Black calling him a “highly distinguished leader” in the industry.
Peel Hunt’s Charles Hall was likewise confident in Allen’s ability to steer Hilton through its difficulties.
“We expect Mark to focus on the basics, such as strong cost control and ensuring the company is focused on the core fundamentals,” he said, adding that building confidence was an “important first step” for restoring shareholder value.
“He has a strong track record at Dairy Crest of addressing strategic issues, with the sale of dairies to Muller and delivering for shareholders with the acquisition of the company by Saputo for £1bn,” Hall added.
No comments yet