Cranswick boosted by plant-based and export potential

The firm issued its results for the six months ended 30 September 2019, delivering increases in revenue and profit.

Analysts at Shore Capital reinforced the strong performance and predicted that Asian export opportunities across the protein sector could spell further growth, with the region’s businesses being hit badly by the ASF crisis.

In addition, its £43.5m acquisition of London-based Mediterranean food producer Katsouris Brothers​ in July – a move widely acknowledged as a step into the soaring plant-based sector – is likely to strengthen the business over the next year.

China and south-east Asia​

“Cranswick [will] benefit from ongoing developments in the global protein market, noting its focused vertical integration and, more pointedly, the rising demand for pork imports into China and south-east Asia​,” a Shore Capital report said.

“Total export revenues increased by a material 65%, taking exports to 9.4% of sales. Exports to the Far East increased by 94%, driven by the well-versed demand post the widespread impact of African swine fever across China and other south-east Asian markets.​”

As part of the wider performance at the firm, pre-tax profit is up 3.6% to £46.4m from the £44.8m posted in 2018.

Adjusted group operating profit was up 5.6% to £47.4m, from £44.9m the previous year. Revenues increased to £770m from £719.2m, a like-for-like change of 5.4%.

“We have made a positive start to the year with reported revenue growth of 7.1% underpinned by a very strong performance in our Far East export markets​,” said Adam Couch, Cranswick’s chief executive officer.

“The UK market remains highly competitive. We have again invested at record levels across our asset base to position the business for future growth. The Katsouris Brothers business, acquired in July, has been integrated successfully and is performing in line with our expectations.​

“We completed the build phase of our new Eye poultry facility on time and to budget with the commissioning process successfully started in early November. ​

Development​

“I remain confident that continued focus on the strengths of our business, which include long-standing customer relationships, breadth, quality and relevance of our products, robust financial position and industry-leading infrastructure, will support the further successful development of Cranswick over the near and longer term​.”

In August, the National Pig Association called for more resources to be allocated to surveillance at ports and airports​ to help keep illegally imported meat and ASF out of the UK and prevent a “potentially massive catastrophe​” for the pig industry.

Meanwhile, the spread of ASF and a growing number of wealthier consumers​ have also contributed to unlocking the “huge potential​” of the Chinese market for beef producers in Northern Ireland, according to the Livestock & Meat Commission (LMC).