Huntingdon, U.K.-based Hilton Foods reports that the company’s overall operating profit fell by 3.3 percent in FY 2022 as a result of challenges faced in the group’s seafood business.
The company’s seafood business, which trades as Hilton Seafood UK and was formerly dubbed Seachill before Hilton purchased it in 2017, faced “challenges” in the year that dragged down several key performance indicators (KPIs) for the company, Hilton Seafood reported.
Adjusted operating profit margins for the group as a whole dropped from 2.2 percent in 2021 to 1.8 percent, and its adjusted operating profit margin per kilogram decreased to GBP 0.14 (USD 0.17, EUR 0.16), down from GBP 0.15 (USD 0.19, EUR 0.17) – with both decrease “reflecting challenges in our Seafood business,” the company said.
“In 2022, we increased our overall volumes, maintaining a trend of continuous growth achieved in every year since Hilton’s flotation in 2007,” Hilton Chair Robert Watson said in the company's results. “However, this was overshadowed by significant challenges in our U.K. Seafood business, including the impact of unprecedented inflation levels with price recovery taking longer than anticipated.”
The company, which is still listed under Seachill UK in the U.K. Companies House, saw its gross profit fall heavily compared to FY 2021, dropping from GBP 45 million (USD 57 million, EUR 52 million) to GBP 17.6 million (USD 22.4 million, EUR 20.4 million) in FY 2022. Along with the drop in gross profit, the company’s operating profit also fell steeply, going from a gain of GBP 8 million (USD 10 million, EUR 9 million) in 2021 to a loss of GBP 19.2 million (USD 24 million, EUR 22 million) in 2022.
The company additionally posted a loss before tax of GBP 20.6 million (USD 26.2 million, EUR 24 million), compared to gains totaling GBP 7.6 million (USD 8.8 million, EUR 9.6 million) in 2021.
All told, Hilton Seafood UK posted a loss for the financial period of GBP 16 million (USD 20 million, EUR 18.6 million), a significant swing from the gains of GBP 5.8 million (USD 7.1 million, EUR 6.5 million) the company posted in 2021.
The company’s revenue also dropped year over year, from GBP 330 million (USD 419.7 million, EUR 383.7 million) in 2021 to GBP 306 million (USD 389 million, EUR 355.8 million) in 2022.
Despite the downturn in 2022, Watson said that the company has made a protracted effort to turn things around.
“We have taken to rebuild sustainable profitability in this business, and we remain confident in the opportunities which the seafood category will present Hilton foods over the coming years, serving a range of domestic and international customers with market-leading salmon, whitefish, shellfish, coated fish, prawn cocktails, and other added value fish products,” Watson said.
Hiton Foods CEO Philip Heffer echoed Watson’s confidence in the business and said the Hilton Seafood UK arm of the company is “well placed for the year ahead” after its efforts. Part of the negative trends experiened in 2022, he said, were related to disruptions caused by automation investments, which will deliver long-term benefits that counter the short-term negative impacts.
“A new leadership team is in place in our U.K. Seafood business, which is performing well, to implement a series of steps to rebuild profitability in this category,” Heffer said. “We are working in partnership with our customers to recover inflation, reduce costs, and optimize the range of products, as well as leveraging the benefits which will come through our investment in industry-leading automation and other initiatives.”
Another key aspect of the company’s success will be leveraging Dutch Seafood Company, which Hilton Food Group acquired in December 2021. The main asset of this acquisition was the Foppen company and its brand of smoked salmon products.
During the 2023 Seafood Expo North America, brothers Remko and Wilbert Vedder, respectively Foppen’s U.S. sales director and chief commercial officer, told SeafoodSource the acquisition was already beginning to show benefits for benefit. The company introduced new products alongside its smoked salmon products at the expo, including a smoked haddock fishcake, a salmon fishcake, and more.
In its results, Hilton Food Group singled out Foppen as a key part of its seafood plans and that it aims to expand its customer base through such strategies as establishing a sales and marketing office in Japan and partnerships with retailers in South Korea and Taiwan.
Photo courtesy of Hilton Foods
