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Hilton Food shares dive as it warns on annual profit, slashes dividend

Published: 10:05 15 Sep 2022 BST

Hilton Food Group PLC -

Hilton Food Group PLC (LSE:HFG) saw its shares plunge after the meat packer predicted lower profitability for the full year due to higher interest rates and the rising cost of living putting pressure on consumers.

Shares were down 28.65% at 671.42p in midmorning trade.

The FTSE 250-listed company said adjusted pre-tax profit fell 3.9% to £34.4mln in the 28 weeks to 17 July 2022, impacted by higher interest costs. Reported pre-tax profit dropped 9.7% to £19.6mln, while basic earnings per share slumped 23% to 15.1p.

The interim dividend was slashed by 13.4% to 7.1p by the meat packing group, which cited "challenging times".

"Across our markets, we have seen volumes come under pressure with the cost of living increasing and consumers becoming ever more cost-conscious. In our seafood business these trends have been exacerbated with world events leading to unprecedented raw material price increases," the company said in a statement.

"Given these factors, and combined with the impact of start-up costs and rising interest rates, the board now anticipates that profitability for the year will be below expectations."

Revenue grew 19.2% in the first half to £2.03bn, reflecting "significant raw material price inflation", with volumes 3.6% higher including new acquisitions Foppen, Dalco and Fairfax Meadow as well as new facility in New Zealand. 

"Our acquisition of smoked salmon producer Foppen has taken us into the US for the first time, and its integration into the group continues to progress well. Meanwhile, the success of our food park in New Zealand has led to us agreeing to a new concept facility in Sweden," said Philip Heffer, chief executive. 

Hilton has entered into an agreement to invest in UK cultured meat technology company, Cellular Agriculture Limited (CellAg).

CellAg's new technology can produce cultured meat at a commercial scale and with low unit costs, said Hilton, adding its investment will assist CellAg to scale its technology for cultured meat. 

The investment also gives Hilton the right to subscribe to a majority stake in the company.
 

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