Hilton Food Group (HFG) H1 2024 earnings summary

Executive summary

• Delivered strong interim results with profit and volume growth, underpinned by operational progress, product innovation, and a strengthened balance sheet.

• Core meat category drove volume growth across all regions; seafood business improvement supported profit growth, especially in UK & Ireland.

• Strategic priorities include global expansion, multi-category offer, supply chain expertise, and leveraging technology, with new contracts and sustainability milestones.

• Strategic investments advanced, with Hilton Foods Canada on track for 2027 launch with Walmart.

• Foods Connected secured a global contract with McDonald's, and sustainability initiatives progressed, especially in packaging.

Financial highlights

• Like-for-like volume up 3.2% to 260,907 tonnes; revenue up 1% at constant currency to £1.94bn; actual FX rates saw a 1.4% decline.

• Operating profit up 23% to £46.9m; operating profit margin increased to 2.4% from 2.0%.

• Profit before tax up 38% to £33.5m; adjusted EPS up 31.3% to 25.8p.

• Net debt reduced to £137m (0.9x EBITDA); strong cash conversion and free cash flow of up to £34.7m.

• Interim dividend increased by 6.7% to 9.6p per share, reflecting a progressive dividend policy.

Outlook and guidance

• Well-positioned to deliver full-year results in line with market expectations; mean analyst adjusted PBT for 2024 is £74m.

• UK seafood and vegan/vegetarian businesses expected to return to profitability by end of 2025.

• Anticipates short-term ROCE dilution from Canada investment, but expects strong long-term returns.

• Working capital expected to remain broadly flat for the full year.

• Focus on strategic priorities, geographic expansion, and leveraging technology for value creation.