Hilton Food Shares Hit 52-Week High on Guidance Upgrade

Hilton Food Group (LON: HFG), the international food packing group, saw its shares soar more than 10% today after it raised full-year profit guidance despite reporting a decline in first-half profit.

The stock rose as much as 10.3% in early trading, touching 701p and setting a new 52-week high above the previous 653.45p, having closed yesterday at 631p.

Hilton Food published interim results for the 26 weeks to 28 June before markets opened today. Adjusted pre-tax profit from continuing operations came to £32.8m, down 5.2% from £34.6m a year earlier, though ahead of the company’s own expectations. Despite the miss, management raised full-year adjusted pre-tax profit guidance to £66m-£71m, up from £60m-£65m. The board held the interim dividend flat at 10.1p per share, payable on 27 November.

The upgrade was driven largely by the removal of losses at Dalco, Hilton’s vegan and vegetarian business, which it agreed to sell in July for £5.4m, plus favourable currency movements. That sale triggered a £16.7m non-cash impairment, a write-down that does not affect cash, pushing the group to a statutory loss per share of 12.0p, against earnings of 18.6p a year earlier. Foppen, its Dutch and Greek smoked salmon business, swung to a £2.2m adjusted operating loss from a £2.8m profit, while net bank debt rose to £194.4m from £126.7m at the last financial year-end.

Chief executive Mark Allen OBE said: “This has been a period of encouraging progress across the Group. Having set out the conclusions of our strategic review earlier this year, we continue to innovate and deliver for our customers. While performance in Foppen has been disappointing, we are beginning to see the positive impact of our improvement plans at Seachill in the UK. The agreed sale of Dalco is a step towards simplifying our portfolio.”

Foppen’s ongoing weakness and the rise in net debt remain the key risks to the improved guidance range for the rest of the year.