The firm, which unveiled a 26% rise in pre-tax profit to £43.8m on sales up 22% to £740m in the year to March 31, said consumers were trading up despite the economic uncertainty, splashing out on air-dried bacon, premium sausages, fresh pork and ham.
Sales of cooked meats rose by 13%, sausages by 23% and bacon by 61%, while licensed brands 'The Black Farmer' (brand owner Wilfred Emmanuel-Jones, pictured right) and 'Weight Watchers' continued to grow strongly. A new range of premium charcuterie products under the Jamie Oliver brand is also planned for the autumn.
The only business not to register an increase was sandwiches (-1%) although this was due entirely to a first half decline, with sales momentum returning in the second half, said chief executive Bernard Hoggarth.
“The trading environment now looks much healthier, with longer-term contracts secured and new accounts growing strongly.”
However, it was vital that the company continued to invest in its plants to remain at the forefront of the sector, he added. “We have some of the best-invested, modern facilities in the industry, having invested £94m over the past five years, and we intend to continue investing to ensure that we maintain our competitive edge.”
An expansion of its facility at Sherburn would help meet growing demand for air-dried bacon, which saw sales increase by 61% during the year, said Hoggarth.
“Investment in the latest generation of high speed slicers, together with doubling of throughput by the commissioning of the second adjacent unit, will ensure the business is well-placed to meet growing demand.”
The extension of the Lazenby's sausage factory in Hull on land purchased adjacent to the existing site was also nearing completion, he said. “The extension, which includes new despatch facilities, is essential to meet peak volume requirements during the barbecue season and at Christmas.”
When the redevelopment of the primary pork processing facility at Preston is completed later this year, it will lift production capacity by 50%, he revealed.
“This is an essential development. The plant is situated in the middle of the largest pig rearing area in the UK and with other factories in the region now processing fewer animals than previously, the Preston site will be providing a first class local service to the area's pig farming community.”
The Norfolk facility is also being upgraded, with boning lines added to simplify the butchery process and increase efficiency and productivity, while the coming year would also see the completion of a major investment project at the fresh pork facility in Hull.
Pig prices proved volatile last year, rising to more than £1.50/kg in the first half but subsequently falling back in the second half. However, they have since started to rise again.
Nevertheless, operating margins in the underlying business were “comparable to those achieved in the previous year”, a “pleasing” result given the raw material cost inflation during the first half, said Hoggarth.
Investec Securities analyst Nicola Mallard said the results were “slightly ahead” of forecasts. “Cranswick has reported another year of profit growth further strengthening the track record.”