Revenue in the three months to June 30 was 8% ahead of the same period last year, driven by strong volume growth across most of its product categories, Cranswick said in its first quarter statement (Q1).
Underlying sales, excluding contributions from the recently acquired Benson Park, were 4% higher than the same period last year, while sales volumes rose by 7%, it said.
International sales volumes also rose, but were offset by low pricing, particularly in the EU, the report said. Export volumes to the Far East were up by 14%.
Outperform market expectations
- £28M in total
- £5M in Benson Park
- Similar investment in Norfolk and Kingston
Cranswick had managed to outperform market expectations, despite tough trading conditions resulting from the supermarket price wars, Shore Capital analysts Clive Black and Darren Shirley said.
“We note the challenging trading environment and potential scope for the UK supermarket segment in particular to see further competitive intensity,” Black and Shirley added.
“With the pig price still materially lower yoy [year-on-year], deflation remains a feature of the trading period at -3%, so volume growth is reported at an encouraging 7% in a UK grocery market where volumes fell slightly over the same period.”
The analysts expected Cranswick to invest £28M into key projects in the future, including a £5M upgrade to the Benson Park facility, which would be completed later this year. A similar upgrade to its Norfolk and former Kingston Food processing sites would also take place, they added.
Investments into its facilities would also be made to ensure Cranswick achieved accreditation from the US Department for Agriculture, in a bid to open trade deals with the US, Black and Shirley said.
‘Assisted by some acquisition’
- The US and the Far East
- Protein base
- Better customer service
Nicola Mallard, analyst at Investec, said: “A good start to the year with Cranswick reporting revenue up 8%, assisted by some acquisition benefit from Benson Park, but also reflecting some new volumes in fresh pork and some selling deflation.”
Meanwhile, key growth areas the company would target were highlighted in Cranswick’s annual report in March.
The areas included gourmet pastry from the firm’s facility in Malton, Yorkshire, and better customer service.
Cranwsick would also continue to develop its protein offer, demonstrated by the acquisition of Benson Park in October last year, said chairman Martin Davey.
“Following a year of significant commercial strategic process for Cranswick, the board looks forward to the opportunities that lie ahead,” Davey said.