Cranswick profits up 10% as annual revenues edge past £1bn

Underlying pre-tax profit at pork supplier Cranswick (CWK) was up 10.6% for the year ended 31 March, boosted by growing exports and strong sales of sausages and bacon.

Revenue crept up 0.8% to £1bn, though volumes were up 3% during the period. The small revenue increase reflected “the impact of lower input prices being passed on to customers”, Cranswick said.

Group margins increased by 0.4 percentage points to 5.8% as the company benefited from lower pig prices.

Export sales to non-European markets continued to grow with full year volumes “increasing strongly” compared to the previous year.

The supplier also benefitted from the October 2014 acquisition of premium poultry producer Benson Park and it invested £21.m in growing capacity and improving efficiencies in its Delico cooked meats facility in Milton Keynes, and the Hull and Norfolk fresh pork sites.

Cranswick has performed positively during a period in which the UK grocery market has remained highly competitive. The business continues to focus on delivering high quality premium products which deliver real value to the UK consumer,” said chief executive Adam Couch.

“This focus on quality and value is underpinned by a constant drive to innovate and bring new, exciting and relevant products to market. The ongoing growth and development of the Company is underpinned by the continued efforts of the highly skilled and committed people across the business”.

Analysts at Investec welcomed “another strong set of results”, noting: “Despite high levels of capex and an acquisition, the balance sheet remains lowly geared and the business looks set to continue to build on its excellent track record of growth.”

Fresh pork sales dropped by 10%, partly attributable to the 9% year-on-year fall in pig prices. However, this fall was also due to the loss of business with one customer at the start of the year, which has “now been recovered in full”.

However, Cranswick saw strong growth in sausages (up 6%) and bacon (up 4%), while pastry sales shot up by 72% and sandwiches were up 15%.

Chairman Martin Davey added. “Cranswick benefits from some of the most efficient and well-invested production facilities in the UK food producer sector. This, in conjunction with our growing international export channels and strategy of diversifying our product portfolio, leaves the board confident that Cranswick is well positioned to continue its successful long term development.”

Cranswick shares fell 2% in morning trading to 1,557p, but the shares are still trading at year-long ties having risen by 3.3% on Friday to record an all-time share price high of 1,595p.