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Hilton Foods has reported higher sales as the meat and fish supplier benefited from higher ingredients prices amid rising inflation in the UK.

However, shares in the company dived after it said its seafood division was under pressure.

The international food producer, which is based in Cambridgeshire, reported revenues of £2.1 billion in the six months to June 29.

This was a 10th higher than the same period a year ago, at constant currency rates.

Hilton said the sales increase was driven by “significant” raw material cost inflation across all its international markets – meaning the supplier was charging higher prices to its retail buyers.

Food costs rising across the supply chain can drive up prices for customers in shops.

In the UK, food and drink inflation rose to 4.9% in July, the highest level since February 2024.

Hilton said sales jumped by 12.5% in the UK and Ireland thanks to inflated beef and white fish prices and a marginal increase in the volume of sales.

However, the company said higher seafood prices had resulted in lower demand for white fish from UK shoppers.

This was largely because of fishing quotas being cut which has significantly driven up prices.

Hilton said it was now focusing on plans to improve availability such as by reformulating fishcakes and launching new white fish like hake.

Hilton shares tumbled by nearly a fifth on Wednesday after the update, to hit the lowest level in nearly two years.

Nevertheless, it said new product launches and selling premium items like steaks helped drive up meat sales to retailers over the latest period.

The group’s convenience food division, which includes ready meals and sandwiches, sold well amid rising demand for ready-to-eat products in Europe, it said.

Chief executive Steve Murrells said: “The first half of 2025 has been shaped by a strong performance in our retail meat and convenience businesses.

“Whilst we have faced market-driven pressures and some specific operational challenges in seafood, we have responded with agility and continue to have a strong platform in place for future growth.”