MARKET REPORT: Hilton Food crashes as cost of living crunch bites

Hilton Food Group experienced its darkest day on the stock market yesterday after warning that its annual profit would be lower than expected.

The FTSE 250 company, which supplies fresh food to companies like Tesco and Waitrose, said it was dealing with rising interest rates as customers cut back on spending amid the tight cost of living.

The dismal half-year results saw the stock plunge 28.3 percent or 266p to 675p on the worst day since its IPO in 2007.

Hilton said it was not “immune” to the impact of rising inflation, but remains “well placed” as it is suitable for the UK, Europe and Australia.

Boss Philip Heffer sparked some cheer for investors by applauding the March acquisition of smoked salmon producer Foppen, which helped Hilton break into the US market. Hilton released half-year results and said sales rose 20.4 percent to £2 billion as a result of volume growth and price increases on commodities.

Profits fell 3.9 percent to £34.4 million due to higher interest charges. The group also cut its interim dividend from 8.2p last year to 7.1p.

Russ Mold, investment director of AJ Bell, said, “Hilton Foods suffers from the cost of living because consumers pay attention to every cent.”

Hilton’s slump seeped through the industry as shares in meat producer Cranswick fell 5.3 percent or 164p to 2940p, supermarket sandwich supplier Greencore fell 2.7 percent or 2.35p to 86.3p and Mr Kipling’s maker, Premier Foods, said: fell 1.3 percent, or 1.4p, to 104.6p.

The FTSE 100 rose 0.07 percent or 4.77 points to 7282.07 and the FTSE 250 also added 0.2 percent or 37.12 points to 18886.32.

Rolls-Royce was among the biggest blue-chip gainers after it completed the sale of Spanish motorcycle company ITP Aero to a group of investors led by private equity firm Bain Capital for around £1.56 billion.

Stock Watch – Longboat Energy

Shares in Longboat Energy slumped after a well estimated to hold an estimated 254 million barrels of oil went dry.

The North Sea oil group said the Copernicus well, located off the coast of Norway, will be closed and abandoned.

Polish company PGNiG led the exploration, with Longboat holding a 10 percent stake.

“The drilling operations were carried out well on schedule and under budget,” said a Longboat spokesperson.

Shares fell 8.9 percent, or 4p, to 41p.

Rolls said it would use the £1.5 billion sale proceeds to repay a £2 billion loan as shares in the jet engine maker gained 2.3 percent or 1.7 pence to 76.86 pence.

Heavyweight pharmaceutical giants were hit by Credit Suisse downgrades.

The broker downgraded AstraZeneca’s rating from “outperform” from “outperform” to “neutral,” causing the stock to fall 0.2 percent or 22p to 10130p.

Credit Suisse raised GSK’s rating to ‘neutral’ from ‘underperform’ but lowered its target price of 1630p from 1430p to 1430p, as it believes the company would have to pay around £4.35 billion in damages related to the drug against heartburn Zantac.

But GSK shares held up, closing 0.4 percent, or 5.4p, at 1337.6p.

Investors in B&M can start thinking about life after Simon Arora, when the discount store announced the start date for its replacement.

Finance boss Alex Russo will take over as CEO from September 26, while Arora, who has been at the helm since December 2004, will remain on the board as executive director until April next year. Shares plunged 2.2 percent or 7.7p to 345.1p.

Engineering firm Renishaw said orders from the semiconductor and electronics sector are declining due to growing caution in the market.

The mid-cap group, which specializes in 3D printing, has also faced rising labor costs.

The company posted a record run of results and said sales rose 19 per cent to £671.1 million in the year to the end of June, while profits rose 37 per cent to £163.7 million. Shares of Renishaw fell 1 percent, or 36p, to 3484p.

Shares of Trainline were also on the slide despite a positive run of half-year results.

The ticketing app said ticket sales rose 17 percent to £2.2 billion from March to the end of August.

While Trainline maintained its full-year expectations for ticket sales, revenue growth and earnings, its stock fell 2.1 percent, or 7.7 pence, to 356.6 pence.