Shore Capital said it has been a year of strong strategic progress for the diversified meat and pastry manufacturer.
Its verdict came as Cranswick announced annual results for the year ended March 31, 2016, which saw revenue up 6.6% at £1,069.6M, compared with £1,003.3M last year.
“For Cranswick to generate double-digit organic volume, in what was a low to no-growth UK grocery market for much of the reported period, is another outstanding performance, in our view,” said Shore Capital analysts Darren Shirley and Clive Black.
Cranswick had also exceeded expectations on cash flow by reporting a year-end net cash position of £17.8M, compared with its forecast of £5.6M, said the analysts.
“We see the medium to long term future for Cranswick as increasingly bright,” they added.
The results combined with news of new business wins prompted Shore Capital to raise its full-year 2017 expectations for the business. Sales forecasts were lifted by £16M to £1,205M.
Cranswick’s progress reflected “excellent management, incorporating the seamless change” overseen by executive chairman Martin Davey, said Shirley and Black.
“The group continues a hard balance between ambition and aspiration, reflected in strong rates of investment, with care, conservatism and prudence, manifested in no material pension burdens, a very robust balance sheet and so the headroom to comfortably see through development plans,” said the analysts.
Meanwhile, N+1 Singer Equity Research was similarly impressed by Cranwick’s latest results.
“We note the diversification into poultry has been positive and the recent Crown acquisition was a good complementary deal,” it said.
However, it said that while the company outlook statement made reference to the strength of a broadly-based product portfolio, customer relationships and efficient production facilities but nothing was revealed about current trading.
The analyst said it planned to issue new forecasts due to the acquisition of Crown Chicken last month.
Meanwhile, N+1 Singer downgraded its advice on Cranswick’s stock from ‘buy’ to ‘hold’.
Cranswick’s product range included: fresh pork, cooked meats, sausage, bacon, premium poultry, pastry, continental products and sandwiches.
Read more about Cranswick’s results here.
Cranswick full-year results – at a glance
- Revenue up 6.6% at £1,069.6m
- Underlying revenue up 4.7%
- Adjusted group operating margin of 6.2%
- Statutory profit before tax up 11% to £58.7M
- Statutory earnings per share 8.8% higher at 91.5p