Reported revenues climbed by 6% to £418.M, while profit before tax rose by 21% to £22.5M. Underlying revenues increased by 5% − excluding results from Kingston Foods acquired at the end of June.
Rising input costs
Shore Capital analysts Darren Shirley and Clive Black had worried that while Cranswick’s first-half performance was strong, full-year results would reveal downward pressure exerted by rising input costs.
“We are therefore very pleased that through a combination of ‘efficiency improvements’ and ongoing ‘constructive pricing discussions with customers, which have helped offset the full impact’, coupled with a number of business wins across the business, we are leaving our 2012/13 current pre-tax profit forecast unchanged at £48M,” said Shirley and Black.
Damian McNeela, analyst with Panmure Gordon, said: “We believe it is encouraging that all divisions reported revenue growth, indicating the relative price attractiveness of pork compared with other proteins.”
Cranswick reported good performances from sausages with revenues increasing by 15%, cooked meats delivered 10% growth and bacon delivered 6% growth.
Popularity of pork
Cranswick’s chairman, Martin Davey, said:"It is pleasing to report continued growth in sales, in what continues to be a difficult economic and consumer environment, reflecting the ongoing popularity of pork with the consumer, driven by both the versatility and the low relative price of pork to other proteins.”
He added that Kingston Foods had made an encouraging contribution to the group and had further extended Cranswick’s customer portfolio and strengthened cooked meat production capability.
"Rising input costs were a feature of trading during the period and this has continued into the second half, although efficiency improvements brought about by investment undertaken by the business and ongoing constructive pricing discussions with customers have helped offset the full impact of this,” said Davey.
Cranswick management expected more balanced trading performance between the first and second halves compared with last year. “The strategy for the development of the business remains unchanged with future growth being generated by a combination of acquisitions and organic initiatives.”