Hilton Food Group (HFG) H2 2023 earnings summary

Executive summary

• Robust FY23 performance: revenue rose 3.7% to £3,989.5m, PBT increased 19.0% to £66.0m, and free cash flow reached £95.9m.

• Operational momentum included UK Seafood returning to full-year operating profitability, strength in meat and easier meals, and progress expanding the international and multi-category offer.

Financial highlights

• Revenue £3,989.5m, up 3.7%; constant-currency growth 5.7%, with volume +0.7%, price +4.4% and mix +0.7%.

• Operating profit £95.0m, up 33.5%; operating margin 2.4%, up 0.6 percentage points; enhanced conversion margin 12.7%, up 2.1 points.

• PBT £66.0m, up 19.0%; adjusted EPS 52.8p, up 17.1%; dividend per share 32.0p, up 7.7%.

• EBITDA £144.0m versus £119.9m; free cash flow £95.9m versus £3.0m, before acquisitions and investments.

Outlook and guidance

• 2024 trading started in line with expectations, while markets remain challenging; financial position and leverage described as strong, with comfortable headroom.

• FY24 core capex targeted at ~£60m; guidance includes ~27% effective tax rate and ~6.8% average bank borrowing rate.

• Medium-term ambitions: ROCE >20%, annual capital spend <£50m, leverage <2.0x, cash conversion >1.5x, sustained mid-single-digit profit growth and organic mid-single-digit EPS growth.

• Hilton Foods Canada full production now expected in 2027; growth opportunities include existing partners, geographic expansion and complementary M&A.