Princes Group H1 revenue rises 7% as cash and M&A firepower build

Princes Group PLC has reported a solid first half, with revenue and adjusted earnings both rising by 7% despite inflationary pressure across several important input costs.

Cash generation was arguably the standout feature. Underlying free cash flow increased by 20% to £90.1 million, helping the food and beverage group finish June with net cash of £374 million.

That financial strength matters because acquisitions remain central to the growth plan. Princes is in advanced negotiations regarding two potential deals and expects to complete at least one transaction over the coming months, subject to agreements and approvals.

The results were described as being in line with management's expectations rather than representing a major upgrade. Even so, improving second-quarter momentum, price increases taking effect from July and the growing cash balance give investors several useful points to consider.

Princes Group's key H1 figures

Metric	H1 2026	H1 2025	Change
Revenue	£999.4 million	£933.3 million	7%
Adjusted EBITDA	£79.3 million	£73.8 million	7%
Adjusted EBITDA margin	7.9%	7.9%	Unchanged
Profit before tax	£39.2 million	£24.2 million	62%
Underlying free cash flow	£90.1 million	£75.3 million	20%
Free cash flow conversion	115.3%	105.5%	9.8 percentage points
Return on capital employed	12.2%	11.6%	60 basis points
Net cash	£374 million	£311 million at 31 December 2025	20%

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, excluding items management considers non-recurring. It increased by 7.5% to £79.3 million, while the margin remained steady at 7.9%.

Maintaining the margin is respectable given the timing gap between higher input costs and customer price increases. Princes said most agreed price increases only became effective from 1 July, meaning their benefit should appear in the third and fourth quarters.

Profit before tax grew much faster than revenue or adjusted EBITDA, rising 62% to £39.2 million. However, the announcement does not provide enough detail in its summary to treat that rate of growth as a guide to the full year.

Growth was not evenly spread

The overall 7.1% revenue increase included contributions from acquisitions such as Princes France, Newlat GmbH and Plasmon. This means the headline growth rate should not be mistaken for purely organic progress.

Business unit	H1 2026 revenue	Annual change
Foods	£305.1 million	0.6%
Drinks	£143.0 million	-9.0%
Fish	£178.3 million	-2.8%
Italian Products	£227.3 million	48.1%
Oils	£145.7 million	7.2%

Italian Products supplied most of the visible growth, with revenue up 48.1% following the inclusion of acquired sales. Adjusted EBITDA in the division rose 39.5%, although like-for-like revenue was affected by lower durum wheat costs and reduced average pasta selling prices.

Oils revenue rose 7.2%, helped by improved sales in Poland, while adjusted EBITDA increased by 6.2%.

Elsewhere, the picture was more mixed. Foods revenue grew only 0.6%, while adjusted EBITDA fell 14.8% because of weaker trading in core UK categories and input costs that had not yet been fully passed on to customers.

Drinks revenue declined 9.0%, partly reflecting commodity price deflation, maintenance and reorganisation activity. Fish revenue fell 2.8%, although positive volume momentum and factory optimisation helped adjusted EBITDA increase by 20%.

The divisional split therefore deserves attention. Princes protected its group margin, but some of that resilience came from Italian growth and operational improvements offsetting pressure elsewhere.

Cash generation strengthens the investment case

Underlying free cash flow reached £90.1 million, with conversion of 115.3%. Free cash flow conversion measures how efficiently earnings are turned into cash.

Conversion above 100% was supported by working capital discipline, procurement optimisation and a continued focus on cash across the group. Net cash subsequently rose from £311 million at the end of December 2025 to £374 million at 30 June 2026.

Excluding IFRS 16 lease liabilities, net cash was £481 million, up from £395 million. This provides meaningful flexibility for investment, operational improvements and acquisitions.

The performance also builds on the margin and cash-generation themes discussed in Princes Group's FY2025 results.

Plasmon integration is producing early savings

Princes reported immediate benefits from integrating Plasmon. Baby and medical pasta production has been brought into the Ozzano facility, which is expected to reduce cost of goods sold by 30% and provide more than €1.5 million of fixed-cost absorption.

Fixed-cost absorption means spreading expenses such as factory overheads across a greater volume of production. Further insourcing initiatives are planned for the second half.

The group has also identified approximately £2 million of additional operational efficiencies, with implementation underway. Its wider synergy programme remains on track, although commodity price volatility and higher transport costs offset part of the benefit achieved during the period.

Commercial progress included 11 Princes tuna products launching through Carrefour Italia, a doubling of customer own-brand tuna business with Carrefour France, a new Princes listing with Lidl Netherlands and new tomato business with Rewe Poland.

Acquisitions could be the next major catalyst

Management is in advanced negotiations regarding two potential acquisitions and anticipates completing at least one transaction over the coming months.

There is no guarantee that either deal will complete. Negotiations, definitive agreements and any necessary approvals are still required. The purchase prices, funding requirements and potential earnings contributions were not disclosed.

Nevertheless, the balance sheet gives Princes the capacity to fund an attractive transaction from existing resources while retaining financial flexibility. Investors will need to judge future deals on valuation, strategic fit and integration risk rather than assuming that expansion is automatically value-enhancing.

What could support the second half?

Trading strengthened in the second quarter and was ahead of the first quarter. Management also expects the benefit of price increases effective from 1 July to be reflected during Q3 and Q4.

These increases should help recover inflationary costs that Princes absorbed during the first half. The group said greater operational flexibility allowed it to manage the delay without a significant effect on margins.

Princes continues to trade in line with management's expectations for FY2026. Exact full-year revenue, profit and cash flow guidance was not disclosed.

Investors can read the original company announcement for the full financial statements and accompanying notes.

What investors should watch now

The main positives are resilient group margins, strong free cash flow, a growing net cash position and visible acquisition capacity. Second-quarter improvement and delayed price increases also offer potential support for the remainder of the year.

The risks are equally clear. A meaningful portion of revenue growth came from acquisitions, Foods profitability weakened, and both Drinks and Fish reported lower revenue. Commodity volatility, transportation costs, cybersecurity threats and the execution risks attached to further deals remain relevant.

No interim dividend was declared, so the immediate shareholder story is focused on reinvestment, cash accumulation and M&A rather than income.

Overall, these are credible rather than spectacular half-year results. Princes has protected its margin and produced plenty of cash, but the next test is whether management can improve weaker divisions and deploy its balance sheet without compromising returns.