The UK food producer said revenue in the three months to June 30 2016 was 11% ahead of the same period last year, driven by strong volume growth.
Underlying revenue was 5% higher than the same period last year, with corresponding volumes up 12%. This was due to the benefit of lower input prices passed on to the group’s customers, it said.
The company also revealed its export volumes to Far Eastern markets were 60% ahead of the same period last year.
That reflected “both ongoing robust demand from the region and increased output from the group’s two primary processing facilities”, said the manufacturer.
Net debt stood at £22M at June 30 2016. The company said this level was £10M higher than at the same point last year and compared with £18M of net funds at March 31 2016.
‘Robust financial position’
The group said it was in a “robust financial position”, with committed, unsecured facilities of £120M.
It said the integration of Crown Chicken, acquired in April 2016 for £39M, was progressing to plan. The new business was said to be making a positive contribution, in line with the board’s expectations.
During the period, the group also revealed it continued to invest heavily across its asset base to increase capacity, add new capability and drive further operating efficiencies.
As part of Cranswick’s strategy to focus on its core protein businesses, the board announced the sale of the group's sandwich business, The Sandwich Factory Holdings Limited, to Greencore for £15M.
In the year to March 31 2016, the sandwich business generated revenues of £54M.
‘Core protein business’
Cranswick ceo Adam Couch said: “I am pleased to announce the sale of our sandwich business to Greencore, which is very much in line with our strategy of focusing on our core protein businesses.
“Moreover, I am particularly delighted that the sandwich division is being acquired by a proven global leader in Greencore who will bring new opportunities and strengths to this business, its customers and the staff to whom, on the Board’s behalf, I would like to extend our thanks for their long-standing loyalty and commitment to Cranswick.”
Meanwhile, Greencore ceo Patrick Coveney said the £15M sandwich deal “made strong business sense”.
What the analysts said about Cranswick
- Shore Capital: The results confirmed a positive start and it welcomed the news of the sale of the sandwich division which it had “long considered” non-core. Shore Capital lowered its sales expectations but left profit forecasts unchanged post today’s update. “Our unchanged profit forecast reflects an expectation of strong momentum in the core business offsetting the lost contribution from the disposed activities,” it said.
- N+1 Singer: This was a “good update” and the sale of the sandwich business is only “marginally dilutive”, it said.