Cranswick has upgraded medium-term profit targets amid strong demand for its meat and poultry products.
The London-listed meat producer now expects “mid-single-digit” organic revenue growth and an operating margin of 7.5% over the next few years, up from 6% previously.
The company also raised guidance for return on capital investment to the upper teens from mid-teens previously, despite stepping up investment in its factories.
CEO Adam Couch said the company’s “relentless focus” on its strengths such as “industry-leading investment, a clearly defined strategy, broadening product portfolio and unrivalled management team” will support its development over the long term.
The announcement was made this morning ahead of the company’s Capital Markets Da,y which will cover pig supply, investment in processing capacity and growing its poultry segment.
“Cranswick has demonstrated an impressive growth track record over its first 50 years. This update demonstrates the benefit of focus, consistency and investment,” said Charles Hall at Peel Hunt.
Cranswick said trading for the current financial year remained robust and was in line with pre-tax profit expectations of £190m to £195m.
James Edwardes Jones, an analyst at RBC, said the company had provided “reassuring commentary” on current trading and ambitious mid-term growth targets.
He noted, however, that its new guidance for revenue growth was “meaningfully below its historical average, albeit towards the higher end of the European consumer staples sector”.
The company’s share price hit a record high in September after it raised its profit forecast for the year off the back of strong trading in the first half.
Its share price rose 1% in early trading this morning following the announcement.
Cranswick received an early Christmas present in December when its China export licence was reinstated for its Norfolk processing plant after a four-year hiatus. It began shipping a full range of products to China in January.
It recently moved into pig genetics with the acquisition of JSR Genetics from JSR Farms in a deal the company said would strengthen its pig farming and milling operations.
“The addition of an integrated pig genetics supply chain will allow us to drive ongoing improvements in production efficiency, meat quality, animal health and robustness, for the long-term benefit of our customers and the UK consumer,” Couch said at the time.
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