Hilton Food Group’s 2025: resilient core meat, choppy seafood, clearer strategy
Hilton Food Group has posted preliminary results for the 52 weeks to 28 December 2025. The topline message: the core retail meat and fresh prepared food businesses held up well, but seafood – notably Seachill and Foppen – dragged on profit. A strategic review has now sharpened the game plan around core strengths, with investment focused where Hilton has clear competitive advantages.
Management kept 2026 guidance unchanged: adjusted profit before tax (PBT) is expected to land between £60 million and £65 million, down from 2025 given the challenges in Seachill and Foppen and with Dalco still loss-making.
Key numbers investors should know
| Metric (continuing unless stated) | 2025 | YoY |
|---|---|---|
| Volume | 523,379 tonnes | +0.2% |
| Revenue | £4,214.6m | +10.3% reported (+11.9% cc) |
| Adjusted operating profit (cont.) | £95.1m | -4.0% reported |
| Adjusted PBT (total, incl. discontinued) | £73.2m | -3.8% |
| Adjusted PBT (continuing) | £69.0m | -2.1% reported (-1.0% cc) |
| Statutory PBT (continuing) | £56.1m | -2.3% |
| Adjusted basic EPS | 56.0p | -8.2% |
| Statutory basic EPS | 87.8p | +100.9% |
| Free cash flow | £53.6m | -13.8% |
| Net bank debt | £126.7m | Improved from £131.4m |
| Net bank debt / adjusted EBITDA | 0.9x | Unchanged |
| ROCE | 20.1% | -1.6ppt |
| Dividend (full year) | 35.0p | +1.4% |
Jargon buster: “Adjusted” strips out one-off items to show underlying trading; “constant currency” (cc) removes FX effects; ROCE is return on capital employed; “net bank debt” excludes lease liabilities.
What drove the 2025 result
- Core resilience: Group volumes were flat-to-up despite inflation. Core meat and fresh prepared foods offset weaker seafood demand.
- Seafood headwinds: Seachill volumes fell 6.8% and it was marginally loss-making on an adjusted basis. At Foppen, US regulatory restrictions on exports from Greece caused stock write-offs and costly workarounds. Related adjusting/exceptional costs totalled £27.6m.
- Portfolio simplification: Big gains on disposals – £35.5m from selling the 65% stake in Foods Connected and £31.0m from the Fairfax Meadow sale – boosted statutory profit but are excluded from adjusted numbers.
- Cash and balance sheet: Free cash flow of £53.6m after a first-half inventory build for peak season and higher capital expenditure. Net bank debt edged down to £126.7m; leverage held at a comfortable 0.9x adjusted EBITDA.
Regional performance: where the money was made
UK & Ireland: solid meat, weak seafood
Revenue rose 16.2% to £1,509.9m (inflation-led pricing), but adjusted operating profit fell 17.2% to £37.5m as Seachill’s lower volumes and margins bit. Meat was “relatively flat” helped by strong Christmas trading; overall margin slipped to 2.5%.
Europe: steady progress, still working through Foppen and Dalco
Revenue grew 9.0% to £1,154.7m; adjusted operating profit improved to £43.0m, up 3.3% at constant currency. Dalco’s volumes rose 8.5% after consolidating to one site, though it remains loss-making. Foppen’s adjusted profit was broadly flat, but the US restrictions forced costly airfreight and write-offs (treated as exceptional). Contract renewals landed with Salling and Coop in Denmark and with Albert Heijn in the Netherlands.
APAC: growth with stable margins
APAC volume rose 3.0% with category and promotional wins. Revenue was up 12.0% at constant currency to £1,550.0m; adjusted operating profit was £29.7m, up 5.5% at constant currency, with margins broadly stable at 1.9%.
Strategy reset: focus the mix, scale what works
The strategic review confirmed Hilton’s strengths: long-term retail partnerships and a scalable, automated meat platform. The new plan revolves around three levers:
- Maximise the core – keep leadership in red meat, push efficiency and margins.
- Enhance the mix – execute improvement plans at Seachill, Foppen and Dalco to increase “strategic optionality”, and scale higher-margin value-added meat and fresh prepared foods in under-served markets.
- Expand geographically – replicate the retailer partnership model in higher-growth markets.
Investment priorities reflect that shift. The Walmart partnership in Canada and the NADEC joint venture in Saudi Arabia are on schedule and expected to contribute from 2027. Hilton is also assessing up to £30m to expand fresh prepared capacity in Poland. Core capex is guided at roughly £45m-£55m a year through the cycle, with 2026 a heavier year at around £100m including Canada and Poland.
Capital discipline is front and centre: keep net bank debt/adjusted EBITDA at 1-2x, target ROCE above 20% through the cycle, and maintain a progressive dividend.
2026 outlook: lower PBT guidance, confidence beyond
Trading so far in 2026 is in line with expectations, with adjusted PBT guided to £60m-£65m. The step down versus 2025 mainly reflects Seachill and Foppen, with Dalco still loss-making. Management sees core volumes holding up and remains mindful of inflation and Middle East risks. Expect the adjusted tax rate around 28% and average borrowing costs near 5.5%. Net bank debt should rise in 2026 due to capex but stay within the 1-2x target range. The bank facilities were refinanced in February 2026 into a single £450.0m RCF with an initial five-year term, adding headroom.
Dividend, cash and balance sheet: reassuring signals
- Dividend nudged up to 35.0p for 2025 (from 34.5p) – a small but telling sign the Board is sticking to the progressive policy.
- Free cash flow of £53.6m, despite elevated investment, shows the model remains cash generative.
- Leverage is low at 0.9x; undrawn committed facilities at year end were £106.0m, with more since the refinance.
My take: positives and pressure points
What I like
- Core resilience: Flat volumes in a tough consumer backdrop speaks to sticky retailer relationships.
- Clarity of focus: Prioritising core meat and value-added prepared foods should support margin mix over time.
- Disciplined capital allocation: Clear leverage guardrails and a >20% ROCE ambition are investor-friendly.
- Option value in growth: Canada and Saudi Arabia set up a 2027 earnings step, with Poland a nearer-term mix upgrade.
What needs fixing
- Seafood drag: Seachill was marginally loss-making and Foppen incurred £27.6m in exceptional costs. US export restrictions are expected to remain at least through H1 2026.
- 2026 dip: Guided adjusted PBT of £60m-£65m implies a softer year before new projects contribute.
- Tax and interest: The adjusted tax rate lifted to 29.8% in 2025 (one-off true-up) and sits around 28% for 2026; funding costs around 5.5% also matter while capex is heavy.
What I’m watching next
- Resolution of Foppen’s US regulatory restrictions and the pace of margin rebuild in Seachill.
- Execution on Canada and Saudi Arabia – commissioning milestones and 2027 contribution timing.
- Decision and returns on the Poland fresh prepared foods expansion (up to £30m).
- Contract renewals and category wins in Europe and APAC to support volumes without heavy promo spend.
- Cash conversion versus the ~100% medium-term target while capex is elevated.
Bottom line for investors
Hilton Food Group delivered a steady 2025 from its core operations, offsetting a difficult year in seafood. The strategy now doubles down on where Hilton wins – scaled, automated meat plants and value-added prepared foods, underpinned by long-term retail partnerships. 2026 will be a rebuilding and investment year, but with a strong balance sheet, a progressive dividend and clear targets, the medium-term setup looks constructive if seafood issues are contained and the growth projects land on time.
