Seafood recovery propels Hilton Food's annual profit surge

Improved performance in seafood arm underpinned 64% rise in pretax profit.

Seafood recovery propels Hilton Food's annual profit surge
Hilton Food Group HFG

Hilton Food Group (LSE: HFG) reported a sharp increase in annual profit, driven by a stronger showing from its seafood business. The recovery in the seafood division was delivered ahead of schedule, supporting the uplift in group pretax profit to £48.6 million, up 64% from £29.6 million the previous year.

The food packaging company's revenue edged up 3.7% to £3.99 billion. Earnings per share more than doubled to 40.6 pence from 19.8 pence last year. Hilton Food's shares were down 1.8% at 09:10 GMT on Wednesday.

While the seafood arm rebounded, returning to full-year operating profit, the company noted that market challenges persist in its vegetarian and vegan business. Steps have been taken to consolidate this unit into a single operating facility, with confidence in the category's future opportunities.

The core meat category continued performing well, with strong volume growth in Asia-Pacific and a resilient outturn in Europe and the UK, despite inflationary pressures. Hilton Food also expanded its international customer base, securing a new deal with Walmart in Canada, complementing organic growth with existing partners.

The company stated that trading in 2024 has started in line with expectations, although markets remain challenging. Growth prospects are underpinned by the strength of the core meat business, continued seafood recovery, recent acquisitions, and the developing Walmart relationship in Canada.

Hilton Food's financial position remains robust, with improving leverage and comfortable headroom levels. The company continues exploring new growth avenues with existing partners, wider geographic expansion, and complementary mergers and acquisitions.

The dividend was increased by 7.7% to 32.0 pence from 29.7 pence. A final dividend of 23.0 pence per share was proposed, up 1.8% from 22.6 pence. Year-to-date, Hilton Food's shares are up 8.4% and have gained 22.6% over the past 12 months.

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