The company recorded its highest ever full year sales and the second best trading profit in its history, despite a background of strong raw material price increases early in the financial year and customers' “unprecedented resistance” to raw material inflation recovery.
The audited preliminary results showed underlying sales ahead by 10% at £821m, with reported revenues also £821m, up 8%, compared to £758m in 2011. Operating profit was down 5% at £46.7m, with pre-tax profits up 3% to £ 48.4m and net debt reduced by £26.6m to £21.7m.
Sales of bacon increased by 39%, with fresh pork up 15%, and sausage rising by 12%, which the company attributed in part to the competitive price of pork compared to most other proteins. This helped Cranswick to achieve the most successful Christmas trading period within these categories. Sales of Parma ham reached record levels, but charcuterie products and cooked meat sales fell by 1%, although when adjusted for sales transferred to Farmers Boy Deeside, which was sold to Morrisons, like-for-like sales were 6% ahead.
Cranswick chairman Martin Davey said: “The business worked closely with its customers to offer competitively priced food to consumers so as to alleviate some of the economic pressures facing them. Whilst this adversely impacted operating margins it contributed, along with the increasing popularity of pork products, to an increase in sales volumes.
“Cash flow in the period was robust notwithstanding the investment in the Company’s asset base of £20m to expand production capacity, improve efficiency and broaden the product range.”
Exports to Europe and further afield are set to be of increasing importance to the Group, with good sales reported in Far Eastern markets. The company has also appointed a new foodservice team to drive sales into this area, which currently represents less than 6% of revenues.
The statement said: “The total foodservice industry in the UK is worth approximately £48 bn. A market of this size provides tremendous scope to introduce Cranswick’s brand of quality and innovation, using the model that has been so successful with the Group’s retail customers.”
Investment in the Norfolk and Hull plants have resulted in new product development across the meat ranges, while the reorganisation of the Hull butchery area, is expected to lead to greater efficiencies, while the installation of a rapid chill system for pig carcases should deliver increased yields. New products include fresh pork escalope and schnitzel products for the convenience sector, 12 new sausage lines and the new Norfolk Sausage Company banner and the development of new burger lines to capitalise on the barbecue season. New air dried hams, value wet cured or injected sliced products have also been developed to service the ‘Butchers Choice’ tier.
The company also announced that Adam Couch will become chief executive in August when Bernard Hoggarth moves to the part-time role of commercial director.