Hilton Food Group, the FTSE 250 listed meatpacker, has lifted its full-year profit target following the sale of its underperforming vegan manufacturing arm.
The company now expects to deliver a pre-tax profit of between £66m and £71m, representing a 10 per cent increase from its previous forecast range.
The upgraded guidance follows the £5.4m sale of Dalco, its Dutch vegan and vegetarian manufacturing business, which completed in July.
Dalco, based in Oosterhout and employing more than 150 staff, produced meat alternatives including sausages, meatballs, nuggets and burgers for private label clients.
The business was acquired by plant-based foods company Livekindly, which also owns vegan brands Fry, Like and Oumph, all familiar products in British supermarket aisles.
Hilton had previously flagged the “underperformance of the Dalco business” and had written down the value of the unit across earlier financial years.
The company said the profit upgrade “reflects the removal of Dalco losses and favourable year-on-year foreign currency movements,” though challenges remain elsewhere in the business.
Hilton’s Dutch smoked salmon arm, Foppen, delivered “disappointing” results due to weak demand, while a surge in raw materials costs earlier in the year also weighed on performance.
The firm reported revenue of £2.3bn for the first half of the year, a 15 per cent increase on the prior year, though pre-tax profit more than halved to £7.5m during the period.
An interim dividend of 10.1p was declared, unchanged from the same period last year, signalling continued caution despite the improved full-year outlook.
Chief executive Mark Allen described the Dalco disposal as a strategic move to focus the business on its core strengths and streamline its portfolio.
“The agreed sale of Dalco is a step towards simplifying our portfolio,” Allen said, pointing to a clearer strategic direction for the group going forward.
“Longer-term, it is the commitment of colleagues, the strength of our customer relationships and leadership in red meat which will continue to underpin our medium-term growth objectives,” he added.
Beyond the divestment, Hilton has been expanding its global footprint, with new facilities under development in both Canada and Saudi Arabia expected to contribute to earnings from 2027.
Shares in Hilton Food Group surged 8.7 per cent to 686p in early London trading, extending a strong run that has seen the stock gain 38 per cent since the start of the year.