Shares in Hilton Food Group have rallied as a turnaround led by new CEO Mark Allen showed promise of higher profits.
Strong trading in its core markets of meat and fresh prepared food helped Hilton Foods post a smaller-than-expected drop in profits in the first half, while the exclusion of vegan food business Dalco as an asset held for sale allowed the group to upgrade profit guidance for the year by £6m.
After a difficult year for the group, beset by regulatory disruption in its seafood business, rising raw material costs and weaker demand, the results were welcomed by the City as a sign of Allen’s progress stabilising the company.
Hilton Foods’ share price shot up 14.8% on Thursday morning following the update. The bounce took the stock to a 12-month high at 725p and up 46% for the year, though it remains well below the 1,100p price sustained through 2020-22.
Revenues from continuing operations climbed 11.5% to £2.3bn on a constant currency basis in the 26 weeks to 28 June 2026, as volume growth of 2.1% was supplemented by significant inflation-linked price increases.
Adjusted operating profit fell 6.6% in constant currency to £45.8m, largely reflecting challenges in Hilton Foods’ Foppen seafood business, though the fall was not as bad as expected.
Core meat and fresh prepared food delivered a profit in the period, with around 5% growth in adjusted profit before tax.
Panmure Liberum analyst Anubhav Malhotra praised the results as a “commendable performance”, with further upside potential in Hilton Foods’ growth projects in Canada and Poland.
Under Allen, the company has reorganised its structure to split East and West markets and separated its seafood operations from meat and fresh food. The seafood division was the greatest drag on performance with a £2.2m loss in the half.
Beleagured smoked salmon subsidiary Foppen’s “disappointing” performance was highlighted by Allen as a particular challenge. The business has been unable to export to the US for over a year thanks to regulatory hurdles. But a hint that Hilton Foods may sell off the subsidiary– though a fuller assessment will come in the second half of the year – helped buoy investor sentiment following the Dalco sale’s positive impact on profits.
Hilton Foods said it was “assessing all options” for Foppen, though Allen insisted the priority would be to address its cost base and relationships with customers.
“There are no set criteria for whether we would sell it or not, the premise is that we improve what we have and then make a decision” he said in a call to journalists.
“We want to give ourselves optionality.”
According to Peel Hunt head of research Charles Hall’s analysis, Foppen’s sale would also improve profits. “That also means that the core business is in better shape than previously assumed,” he added.
“Allen has successfully stabilised Hilton Food,” said AJ Bell investment director Russ Mould.
“Like a lot of companies which run into trouble Hilton is narrowing its focus, leaning on its core red meat and convenience food operations while it rehauls its seafood businesses.”
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