Hilton Food Group has warned that “unprecedented inflationary costs” in its Grimsby seafood business will see it fall short on profit expectations for the year.
The company, behind what was Coldwater and Seachill in the town, informed the markets that the sector was in an autumn trading update. Founded on beef, the acquisition of the huge multi-site operations in 2017 was part of a diversification strategy that has seen it emerge as an international multi-protein food business.
While volume and revenues have been in line with the board’s expectations, with continued growth compared to the same period last year, it said “inflationary pressures are providing a headwind”.
Read more: Hilton Seafood unveils first phase of multi-million pound investment at Grimsby plant
From Grimsby it supplies major supermarkets, with Tesco a key client. An energy intensive industry, sanctions on Russian supply have also seen a premium placed on other seafood as demand increases for alternatives across the board.
The company said: “Within our UK Seafood business we continue to work closely with our retail partners and have made good progress in either mitigating or passing through the unprecedented inflationary costs faced by the business. However, with this occurring at a slower pace than anticipated, the process is not fully complete, and will continue for the rest of this year and into early 2023.”
In its outlook, it added: “Given the challenges in the UK seafood business alongside the wider macro-economic environment, the board anticipates that operating profit will now be below its expectations for the full year.
“Despite this the board remains confident that the business is well placed for 2023, with the group's financial position continuing to be strong, with leverage remaining at comfortable levels.
“We have made good progress in ongoing discussions regarding geographic expansion and continue to explore opportunities for growth in our existing markets as we deliver on our strategy of becoming the protein partner of choice.”
Dutch seafood business Foppen was added earlier this year, with its chief executive Andre van der Padt installed as managing director of the seafood business unit in June.
Full year results are anticipated in mid-January. As a FTSE-constituent, Huntingdon-headquartered Hilton reports more frequently than many sector rivals, with the results potentially presenting an indication of the wider picture.
Hilton's share price fell 15 per cent - down 96p to 538p - in Tuesday's post-update trading.
Read next:
Icelandic acquisitions aid New England Seafood's whitefish supply amid Ukraine invasion pressures
Brexit, logistics and lockdown woes lead grocery exporter Ramsden International to annual loss
UK growth for Northcoast ahead of Japanese-backed buy-out of £115m seafood firm
Flatfish maintains £40m sales level after substantial growth in new ownership
All your Humber business news in one place - bookmark it now
