ii view: Hilton Foods core business outperforms
Once a UK meat packager, this FTSE 250 company has grown to assist retailers in 19 countries. We assess prospects.
8th April 2025 16:09
by Keith Bowman from interactive investor
Full-year results to 29 December
- Currency adjusted revenue up 1.9% to £4 billion
- Adjusted pre-tax profit up 15% to £76 million
- Final dividend of 24.9p per share
- Total 2024 dividend up 7.8% to 34.5p per share
- Net bank debt down 6% to £131 million
Guidance:
- Expects adjusted pre-tax profit for the 2025 year ahead of between £76.8 million and £83.3 million
Chief executive Steve Murrells said:
"Our team's commitment ensures we stay ahead of evolving consumer preferences, enabling us to drive category growth and anticipate future demand. With advanced automation, a strong sustainability focus, and a proven track record of successful product launches.
"Hilton Foods is expert in providing the highest levels of customer service and operating the most efficient sites around the world. These attributes underpin our existing relationships and leave us strongly positioned to enter new markets and attract new customers. I am excited for the opportunities ahead."
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ii round-up:
Food processing and packaging group Hilton Food Group (LSE:HFG) today detailed improved annual profits, with progress to be buoyed by expansion into Saudi Arabia and the launch of services for Walmart Inc (NYSE:WMT) Canada.
Adjusted pre-tax profits for 2024 climbed 15% to £76 million, aided by growth at its core meat business which outperformed the market. Profit for the year ahead is expected to be between £76.8 million and £83.3 million. A final dividend of 24.9p per share, payable to eligible shareholders on 27 June, takes the total payment for 2024 up 7.8% to 34.5p per share.
Shares in the FTSE 250 company fell 2% in UK trading having come into these latest results down 6% year-to-date. That’s similar to ingredients and bread maker Associated British Foods (LSE:ABF) and better than an 11% fall for the FTSE 250 index during 2025.
Hilton processes and packages foods from meat and fish to vegetarian meals using automated facilities and robotics for customers including Tesco (LSE:TSCO) and Dutch-Belgian retailer Koninklijke Ahold Delhaize NV (EURONEXT:AD).
Product volumes up 4.4% in 2024 helped currency adjusted revenues grow 1.9% to £4 billion, driven by product improvements and new ranges and fuelling market outperformances.
A recently announced joint venture with Saudi Arabia’s National Agricultural Development Company is due to launch in the second half of 2026, adding the Middle East to its regional diversity. Hilton’s new Canadian processing facility is on track to begin providing services to Walmart Canada by early 2027.
The company’s AGM is likely to be held mid-to-late May.
ii view:
Founded in 1994 as a meat packer, Hilton has since grown by establishing plants overseas, entering joint ventures and expanding its product range into fish and vegetables. The FTSE 250 company employs over 8,000 people across more than 20 processing and packaging plants. The UK and Ireland accounted for most revenues during 2024 at 37%. That was followed closely by Asia Pacific at 36% and Europe the balance of 27%.
For investors, market challenges for the vegetarian/vegan business persist. Execution risks such as a previous fire at its Belgium plant remain a constant. A possible global trade war and potential subsequent recession would likely dent customer demand for core meat products, while the generation of around two-thirds of sales outside of the UK provides currency risks.
More favourably, expansion via partnerships in Saudi Arabia and Canada is ongoing. Diversity in both product offering and geographical region exists. Exposure to food is arguably broadly defensive as consumers must eat no matter what the economic backdrop, while a forecast dividend yield of close to 4% is not to be overlooked.
For now, and despite continued risks, a consensus analyst fair value estimate above £10.50 likely means the shares will reman of interest to investors.
Positives:
- Geographical diversity
- Attractive dividend yield (not guaranteed)
Negatives:
- Uncertain economic outlook
- Subject to currency movements
The average rating of stock market analysts:
Buy
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