Modest growth for Cranswick as key markets wane
For the six months to 30 September 2018, the group reported revenue of £719.2m, 0.6% up year-on-year, while adjusted profit before tax for the period was 0.9% higher at £44.8m compared to £44.4m in the same period last year.
Cranswick said the barriers to further growth included reduced prices in key wholesale and export markets, as well as the relocation of its Continental Products business.
Category performances
Its total fresh pork revenue fell by 5.5% reflecting lower wholesale and export demand, with slightly fewer pigs processed as a direct consequence. However, its retail sales increased by 4.7%, driven by strong volume growth thanks to the World Cup and summer weather.
The business’ poultry revenue increased by 19.3% compared to the same period last year. This was driven by the ready-to-eat chicken category, which continued to grow ahead of the wider UK meat protein sector.
It convenience revenue rose 0.6%, a slowdown on previous years, which was attributed to lower pricing and reduced promotional activity. Its Gourmet Products revenue increased by 0.1%.
Commenting on the results, Cranswick’s chief executive officer Adam Couch said: “The first half performance was in line with our expectations. They were achieved despite more uncertain domestic market conditions and softer pricing in key export markets.
“The group’s capital investment programme remains firmly on track. During the period, we spent a record £41m across our already well-invested asset base as we build a platform for future growth.
“Our new £27m Continental Products facility in Bury, Lancashire was commissioned during the period. We have also invested heavily in the group’s agricultural operations, and construction of a £60 million class-leading, primary poultry processing facility in Eye, Suffolk, which is due for completion towards the end of the next financial year, is now well underway.”
Looking ahead, Couch added: “The board is confident that continued focus on the strengths of the company, which include its long-standing customer relationships, breadth and quality of products, developing export channels and asset infrastructure, will support the delivery of its expectations for the current year and its further successful development over the longer term.”
Recent investments
The business invested £7m across its three pork primary processing facilities during the period, including spend on phase one of the extension to the Hull facility, which is nearing completion and will further increase capacity and improve operational efficiencies.
It also spent over £6m on farming infrastructure, to increase breeding and finishing capacity, and a further £2m in a joint venture with one of its key commercial pig producers to increase its capability in this sector.
Over the period, Cranswick spent £3m to complete the £27m Continental Products project, while its poultry processing facility was progressing “to plan”, it said.
