Hilton Food Group PLC on Thursday said it expects annual profit to be below expectations due to cost pressures on consumers, as well as a hit from start-up costs and rising interest rates.

The FTSE 250-listed food packaging business also cut its interim dividend by 13%.

Shares were down 30% at 657.85 pence each on Thursday morning in London, making it the worst performing mid-cap stock in early trade.

In the 28 weeks to July 17, the Cambridgeshire, England-based firm said pretax profit declined by 9.7% year-on-year to £19.6 million from £21.7 million a year earlier.

Hilton Food’s operating margin weakened to 2.0% from 2.3% due to raw material price inflation.

Total administrative expenses rose by 11% to £139.0 million from £123.4 million.

Revenue, however, was 19% higher at £2.04 billion from £1.71 billion a year before, driven by volume growth and raw material price inflation.

Chief Executive Philip Heffer said: ‘In the current macroeconomic environment, Hilton has not been immune from the impact of heightened inflation. While we remain watchful of any near-term changes in consumer sentiment, we believe that our international scale, strong customer relationships, and diversified protein offer leaves us well-placed within a growing global market.’

However, the company expects full-year profit will be below expectations due to cost-of-living pressures on consumers, combined with New Zealand start-up costs and rising interest rates.

Hilton Food declared an interim dividend of 7.1p per share, down 13% from 8.2p a year prior.

Copyright 2022 Alliance News Limited. All Rights Reserved.