Hilton, the UK's biggest meatpacker, has raised its profit target after offloading its loss-making vegan arm.

The FTSE 250-listed company, which packages beef, lamb and fish for major supermarket customers including Tesco and other retailers across the UK and Europe, said it now expects to make a pre-tax profit of between £66m and £71m — a 10 per cent uplift from its previous forecast range.

The upgrade follows the firm's sale of its Dutch vegan and vegetarian manufacturing business, Dalco, for £5.4m in July. Dalco, based in Oosterhout and employing more than 150 staff, produced a range of meat alternatives for private label clients, including sausages, meatballs, nuggets and burgers.

The business was snapped up by plant-based foods company Livekindly, which also owns vegan brands Fry, Like and Oumph — staples of the vegan aisles in British supermarkets.

The disposal comes amid a broader cooling of the plant-based meat sector, where growth has slowed from the rapid expansion seen around 2020-21 and several producers and retailers have scaled back ranges or exited loss-making lines.

Hilton had previously warned of the "underperformance of the Dalco business" and had included write-downs in the value of the arm in earlier financial years.

'Leadership in red meat'

The profit upgrade "reflects the removal of Dalco losses and favourable year-on-year foreign currency movements," Hilton said. The company has also been hampered by "disappointing" weakness in demand at its Dutch smoked salmon arm, Foppen, as well as by a surge in raw materials costs earlier in the year.

The firm posted revenue of £2.3bn for the first half of the year, a jump of 15 per cent compared to last year, while pre-tax profit more than halved to £7.5m. It declared an interim dividend of 10.1p, unchanged from last year.

"The agreed sale of Dalco is a step towards simplifying our portfolio," chief executive Mark Allen said. "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."

Away from vegan products, Hilton has ramped up its global expansion, including building new facilities in Canada and Saudi Arabia, which it said would contribute to its bottom line from 2027.

Hilton shares soared 8.7 per cent to 686p in the opening minutes of trade in London on Thursday. The stock is up 38 per cent since the start of the year.

Source: City AM

References: Hilton Foods interim results (London Stock Exchange), Hilton Food Group sells Dutch vegan business (The Grocer), Livekindly