Hilton Food Group H1 2025: solid trading, seafood drag, and big growth projects on track
Hilton Food Group has posted a steady first half in a tough market. Retail meat and convenience outperformed, seafood took a knock, and investment stepped up for Canada and Saudi Arabia. Management still expects to hit full-year guidance.
Remember: “constant currency” strips out exchange rate moves to show underlying trading, while “adjusted” numbers exclude one-off items to reflect ongoing performance.
Key half-year numbers investors should know
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Volume (tonnes) | 267,405 | 260,907 | +2.5% |
| Revenue | £2,092.4m | £1,943.8m | +7.6% reported (+10.4% cc) |
| Adjusted operating profit | £46.6m | £46.8m | -0.4% reported |
| Adjusted profit before tax | £33.6m | £33.5m | +0.3% reported (+3.0% cc) |
| Statutory profit before tax | £24.3m | £25.5m | -4.7% |
| Adjusted basic EPS | 26.5p | 25.8p | +2.7% |
| Statutory basic EPS | 18.6p | 18.8p | -1.1% |
| Adjusted free cash flow | £(30.8)m | £30.0m | Outflow |
| Net bank debt | £202.4m | £137.0m | Higher |
| Leverage (net bank debt/adj. EBITDA) | 1.3x | 0.9x (FY24) | Within covenants |
| Interim dividend | 10.1p | 9.6p | +5.2% |
What drove the performance: meat strong, seafood soft
Retail meat and convenience delivered above-market volume growth of 3.1%, supported by strong retailer partnerships, new product launches and a well-aligned range. That is a decent result given significant protein inflation, especially beef.
Seafood was the weak spot. UK demand for white fish softened due to raw material inflation and quota cuts. In Europe, Foppen’s smoked salmon business faced regulatory restrictions on shipments to the US from Greece. Hilton temporarily moved production to the Netherlands to protect customer supply, incurring £2.0m of non-underlying costs in the half. Management expects the Foppen disruption to continue into H2 2025 while they work with the FDA.
Convenience categories performed well as consumers bought more ready-to-eat and prepared meal solutions across Europe.
Regional picture: the moving parts
UK & Ireland: resilient core, seafood headwind
Revenue rose 12.4% to £797.3m, with adjusted operating profit up 6.2% to £22.4m and margins at 2.8% (2024: 3.0%). Retail meat volumes grew 1.7%, outperforming a total market decline of 2.7%. Hilton increased tactical inventory to secure supply for H2, which lifted working capital. Seafood remains pressured by white fish inflation; Hilton is reformulating ranges and introducing alternative species.
Europe: growth in meat and meals, Foppen drags
Revenue increased 5.3% on a constant currency basis to £544.9m. Adjusted operating profit fell 10.5% to £17.1m as margins dipped to 3.1% (2024: 3.7%) because of the smoked salmon disruption. Retail meat and easier meals still outperformed the market with 3.3% volume growth. The production shift to the Netherlands safeguards US customer supply but adds temporary logistics and operating costs.
APAC: steady progress
Revenue grew 11.9% on a constant currency basis to £750.2m, with adjusted operating profit up 4.8% to £15.2m. Margins were stable at 2.0%, volumes rose 3.6%, and beef price inflation lifted sales. Product range expansion supported promotional activity across Australia and New Zealand.
Cash, debt and dividends: investment-heavy half
Adjusted free cash flow was an outflow of £30.8m, compared to a £30.0m inflow last year, driven by higher inventory and capital spend in Canada. Net cash used in operating activities was £0.6m.
Net bank debt rose to £202.4m as Hilton funded strategic stock and growth capex. Even so, leverage sits at 1.3x adjusted EBITDA and interest cover is 5.4 times, with £47.0m of undrawn committed facilities – comfortable against covenants of 3.0x leverage and 4.0x interest cover.
Capital expenditure was £41.2m, including £15.1m on the Canadian project. Return on capital employed was 20.8% (2024 full year: 21.7%). The Board declared a 10.1p interim dividend, up 5.2%, reflecting confidence in cash generation over the year.
Strategy and growth pipeline: Canada, Saudi Arabia and digital
Two big growth avenues remain firmly on schedule: the NADEC joint venture in Saudi Arabia (launch H2 2026) and Hilton Foods Canada with Walmart (launch early 2027). In Canada, ground blessing is done, automation installation is due to start in Q4, and 2025 capex is expected to be about £40.0m. Build-phase inflation is above plan, but management says returns still exceed thresholds.
On digital, Apax has agreed to invest in Foods Connected, with Hilton to retain a 26% stake post-completion (down from 65%), subject to approvals. The new partnership should help scale the platform’s growth opportunities. Across operations, Hilton continues to “premiumise” ranges where appropriate while also reformulating to offer value in an inflationary backdrop.
Sustainability remains active in the background, with packaging and logistics optimisation in Australia improving efficiency and reducing emissions and costs.
Outlook and guidance: within expectations despite seafood issues
Management expects retail meat to remain robust through the rest of 2025, while working to mitigate white fish inflation and Foppen’s regulatory disruption. Full-year results are expected to land within the company-compiled range of expectations of £76.8m to £81.0m (as at 2 September 2025).
My take: where this leaves the equity story
What looks positive
- Outperformance in retail meat and convenience shows the model still works in inflationary conditions.
- Dividend growth to 10.1p signals confidence despite heavier capex and inventory.
- Balance sheet headroom: leverage at 1.3x and covenants with ample headroom provide flexibility to keep investing.
- Clear long-term growth pipeline in Canada and Saudi Arabia with blue-chip partners (Walmart and NADEC).
What to watch
- Seafood recovery path: Foppen’s US export restrictions are expected to weigh through H2 2025. Timelines for resuming Greek production are not disclosed.
- Cash conversion: adjusted free cash outflow this half was sizeable. Watch working capital unwind in H2 and into early 2026 as seasonal stocks run down.
- Project inflation in Canada: costs are higher than planned, though management still expects returns above thresholds.
Jargon buster
- Constant currency: removes FX swings to show underlying performance.
- Adjusted results/APMs: strip out exceptional items and certain accounting effects to show underlying trading.
- Leverage: net bank debt divided by adjusted EBITDA. Lower is generally safer; 1.3x is conservative.
Bottom line
This is a “keep the faith” update. Hilton Foods is absorbing a seafood wobble while its core meat and convenience engine ticks over, and it is leaning into growth with Canada and Saudi Arabia. The near-term story is about execution and cash discipline; the medium-term story is capacity coming onstream with major partners. If management delivers within guidance and Foppen normalises, there is room for the valuation to recognise the longer-term growth runway.
