Hilton Food Group (LON:HFG) saw its shares dive 18% on Wednesday after warning that shortages of white fish had pushed up costs and dented demand in the UK, dragging down profitability.
The food packaging firm reported pretax profit of £24.3 million for the half year to June 29, a 4.7% fall from £25.5 million a year earlier. Adjusted operating profit slipped 0.4% to £46.6 million, though rose 1.9% on a constant currency basis.
Revenue climbed 7.6% to £2.09 billion, reflecting higher volumes and raw material prices. However, the seafood division struggled as quota cuts squeezed supply, leading to what Hilton Food described as “significant” raw material inflation. Softer demand followed, offsetting growth in its retail meat and convenience businesses, which delivered above-market volume growth of 3.1%.
The company said it is reformulating products and introducing alternative species to ease the pressure, alongside tactical inventory purchases to safeguard availability for the rest of the year.
Rising inventories and higher Canadian capital spending pushed Hilton Food into an adjusted free cash outflow of £30.8 million compared to a £30.0 million inflow last year. Net debt swelled to £202.4 million from £131.4 million at the end of 2024.
Elsewhere, the company’s Foppen smoked salmon unit in Europe was hit by regulatory restrictions on US shipments, adding operational headaches.
Despite the turbulence, Hilton Food stuck to its full-year outlook, guiding adjusted pretax profit within the £76.8 million to £81.0 million range, up from £76.1 million last year. It declared an interim dividend of 10.1 pence, a 5.2% increase.