Hilton Food Group PLC on Thursday reported lower half-year profit amid higher costs and only a single-digit rise in revenue, but the firm still upped its interim dividend, saying it was ‘well positioned’ for the year ahead.

In the 28 weeks ended July 16, the food packaging firm reported a pretax profit of £11.3 million, down 42% from £19.6 million the year prior.

The drop in profitability came as Hilton’s total administrative expenses climbed 20% to £167.7 million from £139.0 million, and cost of sales edged 3.8% higher to £1.90 billion from £1.83 billion.

It also noted exceptional costs of £7.7 million which related to £5.2 million of additional costs incurred following the Belgium fire in 2021, £1.2 million on tangible assets impaired due to the anticipated closure of the Dalco Oss facility and £1.3 million of reorganisation costs.

Revenue in the half-year totalled £2.12 billion, up 5.2% from £2.02 billion the year prior. Hilton said this increase was primarily driven by raw material price inflation, though it also noted the impact of a full period of trading at Foppen.

Volumes increased by just 0.2% to 272,321 tonnes from 271,708 tonnes.

Chief Executive Steve Murrells said he was ‘pleased’ with the results, saying that they showed a ‘robust performance against a challenging economic backdrop’.

‘As I look ahead, I am confident in the opportunities we have to grow, building on our existing partnerships and forging new ones, based on our unique multi-category protein offer,’ he said.

Hilton said it is ‘well positioned’ to continue to trade in line with board expectations for the rest of the year.

‘Growth prospects are underpinned by recent acquisitions and the continued recovery in seafood, combined with opportunities to develop cross-category business and utilise wider supply chain management expertise,’ it said.

‘With a strong financial position with leverage and headroom at comfortable levels, the outlook for continued progress remains positive.’

Hilton declared an interim dividend of 9.0 pence, up 27% from 7.1p the year prior.

Shares in the firm were up 0.3% at 682.00p on Thursday morning in London.

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