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Hilton Food Group PLC on Tuesday said it expects operating profit to be below its expectations for the full year due to challenges in its UK Seafood business.
Shares in Hilton Food slumped 14% to 545.00 pence each in London on Tuesday morning.
In an autumn trading statement, the Cambridgeshire, England-based food packaging business said its operating profit will be below expectations for the full year, but volume and revenue for the recent trading period have been in line with the board's expectations.
Hilton Food said there has been "continued revenue growth" compared to the same period last year, although inflationary pressures have created a headwind.
Trading has been in line with expectations in the Asia-Pacific division, with strong revenue and volume growth in its New Zealand food park, the company said.
In Europe, Hilton Food's single customer facilities recorded revenue ahead of the same period last year, with particularly strong trading in Scandinavian and Central European markets, driven by the strong performance of the fresh food business.
In its European multi-customer businesses, overall trading conditions have improved. While the company has initiated a number of cost savings initiatives and investments in automation, the benefits of will only be delivered in 2023, it said.
Hilton Food's technology businesses, Foods Connected and Agito, have "continued to add new customers in the period". The company also noted it is "pleased with the early stages of our partnership with Cellular Agriculture".
Hilton Food is attempting to pass on or mitigate the "unprecedented" inflationary pressures in its UK Seafood business. This process is occurring at a "slower pace than expected".
Because of the pressures in the UK Seafood business, Hilton Food said it will fail to meet its full-year profit expectations.
The company said it "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."
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