Shares in Hilton Food Group PLC (LSE:HFG) flopped 22% after the company warned that ongoing operational issues and subdued demand would make profit growth in 2026 difficult.
In a third-quarter trading update, the producer of red meat, seafood, and convenience foods said it expects adjusted pre-tax profit for the current financial year within a range of £72 million to £75 million, compared to £76.1 million last year.
While the fourth quarter is expected to benefit from the usual seasonal uplift, full-year earnings guidance reflects continued weakness in seafood and the impact of inflation on consumer demand.
Volumes remained stable across red meat and convenience categories, with the latter performing well.
"The wider UK seafood division continues to be impacted by softer white-fish demand," the FTSE 250 group said, with demand affected by high raw material costs and pressure on household budgets.
Problems also persist at Foppen, the group’s smoked salmon business in Europe.
Regulatory issues are still preventing shipments to the US, and approval delays tied to the US government shutdown mean that production at its Greek facility is now not expected to resume before 2026.
Hilton said net debt will be only slightly higher at year-end, supported by £71 million in net cash inflows from the completion of the Foods Connected and Fairfax Meadow transactions.
Inventory levels are expected to decline through the Christmas trading period.
The company also said it remains on track with its Canadian facility development and joint venture in Saudi Arabia.
A strategic business review aimed at optimising operations is nearing completion, with an update scheduled for 29 January 2026.