Hilton Food Group PLC (LSE:HFG) reported a healthy increase in annual revenue but a sharp fall in profitability impacted by “significant” challenges in its UK seafood business.
The company also announced a change at the helm with Steve Murrells named new chief executive officer.
Murrells will assume the position from 3 July 2023, succeeding Philip Heffer who is stepping down after almost 30 years with the business.
In the 52 weeks ended 1 January 2023, the food packaging business said increased volumes had been overshadowed by the issues in seafood which included the impact of unprecedented inflation levels with price recovery taking longer than anticipated.
There was also further disruption through automation investments, the firm said.
Group revenue rose 16.5% to £3.8bn from £3.3bn a year prior, underpinned by contribution from newly acquired businesses and the first full year of trading in New Zealand.
But pre-tax profit of £29.6mln was down 38% from £47.4mln, while EPS fell 56% to 19.8p from 45p in the comparative period a year before.
Broker Peel Hunt said "2022 was a tough year for Hilton, with the scale of inflation (particularly in seafood) bringing significant short-term challenges".
But it was "encouraging that these now look to be under control and the attractions of the business model and the long-term growth potential are intact".
"We believe there is material potential upside to the rating," the broker added.
Hilton said its trading performance since the beginning of 2023 has been in line with its expectations and the business is well positioned for the year ahead.
“We continue to explore opportunities with existing and new customers for further expansion in our domestic and overseas markets,” it added.
The company maintained the annual dividend at 29.7p.