City Talk: Cranswick sees pigs fly
Quality bacon and sausage company Cranswick revealed a 26% jump in its latest yearly profits. Pre-tax profits rose to £43.8m in the year to the end of March compared with £34.7m in the previous year. Sales were 22% up at £740m.
The main boost was provided by customers digging deeper into their purses and wallets to buy top-of-the-range meat, while supermarkets bought in more pork. The sales rise was boosted by the purchase of pork processing business Bowes of Norfolk like-for-like sales rose by 11%. Bacon sales roared ahead by 61%, while sausage sales climbed by 23%. Net debt fell by £11.9m to £34.7m. The Cranswick pet food business was sold for £17m to a management buy-out.
Cranswick also provides pork for WeightWatchers-branded products and has now clinched a deal to supply a range of charcuterie meats for celebrity chef Jamie Oliver, who is launching a range of meats and pasta under his own brand name.
Northern Foods puts accent on growth
Northern Foods is focusing tightly on growing both sales and profits in the year to 3 April, 2011. Earnings last year were clobbered by £26.6m of one-off costs, incurred in closing down ready-meal factories in Swansea and Hull. Pre-tax profit dropped to £7.4m last year compared to £12.1m the year before. Stripping out restructuring costs and a pension charge, profit stayed almost flat at £39.2m. Sales climbed a little from £975.2m to £977m. Cash flow from operations climbed to £68.8m up from £54.5m the previous year.
Profit margins are being restored by ending unprofitable contracts with supermarkets and closing down plants that supplied them. Northern Foods is investing more in automated production facilities and improving sites.
The company may also bring back into business Fenland Foods in Lincolnshire, which once made Italian ready-meals for Marks & Spencer until the two companies were unable to agree a price for a contract back in 2008.
Northern will also spend more in marketing Goodfella's pizzas.
Sainsbury's keeps a weather eye out
Sainsbury's said it has come up with a solution to the variable British weather, which leads many food retailers to stock the right foods when they are most needed. It has invested millions of pounds in technology, with the aim of reducing the amount of un-bought food by 15% during volatile weather conditions.
The real-time supply chain technology system will monitor food leaving the shelves every minute, so the head office knows exactly which foods to send to individual stores every day. The technology is also very green, as it will result in an annual C02 fall of more than 1,400t. Last year, there were six periods of variable weather, which cost the retail industry as a whole millions of pounds in unsold and wasted food.
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