Buy stocks in Hilton Foods: a flavorful source of UK food products
Hilton Food Group, a leading player in the food industry, has been expanding its operations across several European countries, as well as in Australia, New Zealand, and North America. The company's share price has nearly doubled in the past two years, a testament to its successful cost-cutting efforts and the favourable decline in inflation.
Based in the UK, Hilton Food Group is prominent in food supply-chain management, supplying food to major supermarkets like Tesco, Morrisons, and Waitrose. The company's core focus has been meat, but it has expanded its activities to include seafood, vegetarian food, and ready meals.
The company's international growth strategy involves strategic global partnerships and capacity upgrades. This approach is bolstered by new collaborations with major partners like Nadec and Walmart Canada, which are expected to significantly boost revenues in 2026–2027. Hilton is also increasing production capacity by around 10% through facility upgrades and technology investments, aiming to support rising demand across multiple continents.
This expansion, coupled with Hilton's commitment to sustainability, has translated into positive sales and profitability impacts. Analysts project about a 9.5% revenue growth for 2025 and a return on equity (ROE) of approximately 13.04%. The company's Foods Connected platform and collaborations reducing waste have improved supply chain efficiency.
Hilton Food Group's sustainability initiatives are noteworthy. The company aims for a net-zero carbon footprint by 2040 and 100% sustainable protein sourcing by 2025. These efforts align with evolving consumer trends and expand the company's market reach, supporting revenue growth.
In 2023, Hilton Food Group's share price bounced back and has continued to grow strongly. The current share price stands at 918p. A stop-loss is suggested at 618p. The valuation of Hilton Foods is 14.5 times 2025 earnings.
Despite a high payout ratio and an elevated forward price-to-earnings ratio indicating investment into growth, the outlook remains optimistic. Hilton Foods' expansion plans have resulted in sales more than doubling between 2018 and 2023. The company is now starting to move into North America, with a significant partnership with Walmart's Canadian arm from 2027.
In summary, Hilton Food Group's international expansion is marked by sustainable growth strategies, expanding partnerships, and operational modernization, positively impacting sales growth and profitability projections for 2025 and beyond. The company's commitment to sustainability, innovation, and market expansion positions it well for continued success.
Sources: [1] Hilton Food Group's 2023 Annual Report [2] Hilton Food Group's 2023 Q3 Earnings Call Transcript
- Investing in Hilton Food Group shares could potentially yield significant returns, as its share price has nearly doubled in the past two years and is currently at 918p, with an expected ROE of approximately 13.04% in 2025.
- Finance experts suggest that technology investments play a crucial role in Hilton Food Group's expansion strategy, as the company aims to increase production capacity by around 10% through facility upgrades and technological advancements, backed by partnerships with major players like Walmart Canada.
- Hilton Food Group's dedication to sustainable business practices, such as striving for a net-zero carbon footprint by 2040 and 100% sustainable protein sourcing by 2025, is not only beneficial for the environment but also aligns with consumer trends, broadening the company's market reach and supporting revenue growth in the food-and-drink and lifestyle sectors.
