Cranswick celebrates ‘crackling Christmas’ results

By Alice Foster contact

- Last updated on GMT

Cranswick said third quarter trading was in line with expectations
Cranswick said third quarter trading was in line with expectations

Related tags: Meat

Cranswick’s “crackling Christmas” helped to boost revenue by 5% in the three months to December 31 2015, according to a leading analyst.

The meat processor’s trading update revealed 10% like-for-like volume growth and made for “impressive reading”, ​according to Investec analyst Nicola Mallard.

“The strong volume performance from Cranswick over the festive season was broadly based by product and customer,”​ Mallard said.

“Whilst some of the growth reflects a contract regain, there is sufficient momentum in the wider business to see growth continue past the anniversary of the win.”

Contract regain in fresh pork

Figures at a glance

  • Total revenue 5% ahead
  • Strong volume growth of 11%
  • Far East export volumes 28% ahead

The analyst said the contract regain was in fresh pork, while there was a good uplift in seasonal pastry products and double-digit volume growth in bacon and continental food.

In her note, entitled ‘A crackling Christmas for Cranswick’, she said that pig prices tend to weaken after Christmas. Investec repeated its ‘buy’ advice on Cranswick stock. 

Shore Capital analysts Clive Black and Darren Shirley said the meat company’s strong trading showed further material outperformance”​ of the broader UK grocery market. 

“We believe Cranswick’s volume growth remained broad based, and underpinned by continued strong volume growth from fresh pork with a record number of pigs processed ahead of the key Christmas trading period,”​ Black and Shirley said. 

Trading in line with expectations​ 

Cranswick’s update said trading was in line with expectations, although market conditions were expected to remain competitive for the rest of the financial year. 

“The group continues to invest heavily across its asset base to increase capacity and drive further operating efficiencies,”​ the firm said. 

Investments have been completed at its Benson Park site and Kingston Foods site, which has won new business for premium gammon, according to Shore Capital. 

Ongoing investment projects include an £8M upgrade to its Norfolk primary processing facility and a £11M efficiency drive at cooked meat facilities at Sutton Fields, Milton Keynes and Valley Park, it added. 

View from analyst

“Whilst some of the growth reflects a contract regain, there is sufficient momentum in the wider business to see growth continue past the anniversary of the win.”

  • Nicola Mallard, analyst, Investec 

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