Shore Capital said in a recent note that it has trimmed its earnings forecasts for Hilton Food Group (LON: HFG) due to currency headwinds, despite the company reporting strong underlying performance in FY24.
In a research note last week, analysts highlighted that the “House Stock” had “a further year of good progress,” with robust 4.4% volume growth and double-digit improvements in EBIT, pre-tax profit and earnings per share.
Adjusted EBIT rose 11.9% on a constant currency basis, with Group margin improving 24 basis points to 2.6% — its highest level since pre-pandemic levels.
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However, Shore Capital has cut its FY26 pre-tax profit estimate by around 3% to £80.1 million, citing “translational currency headwinds, notably in APAC.”
The revised forecast leads to earnings per share of 62.0p in FY26. For FY27, the brokerage introduced a forecast of 73.8p EPS, reflecting roughly 10% year-on-year growth, including maiden contributions from new operations in Canada and Saudi Arabia.
Shore Capital praised Hilton’s strategic delivery and financial strength, noting a 340bp rise in return on capital employed (RoCE) to 21.7%, alongside leverage of less than 1x, allowing for continued investment.
Performance across all regions was described as solid, with the UK and Ireland seeing EBIT growth of 44% to £50.9 million. In Europe, modest EBIT growth was impacted by losses in the plant-based Dalco business, where action has been taken to reach profitability in FY25.
Shore Capital also labelled HFG a “high-quality” stock with strong cash flow and long-term growth potential.
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