Cranswick: robust growth and strong gains
UK meat producer Cranswick has reported strong gains and “robust growth” across all categories in the last three months, a statement from the company said.
The trading update for the period from 1 April 2012 to 31 July 2012 highlighted strong sales of sausage, bacon and continental products, with overall sales in the three months to 30 June 2012 rising by 7.4% to £209m.
The company said that despite modest increases in pig prices during the period, these remained below the peak of last summer, and the impact had been absorbed through increased volumes and continuing operating efficiencies.
Net debt was reported at £38m at the quarter-end, compared to £22m at 31 March 2012, but the company said that the group is in a sound financial position. The increase not only reflected a seasonal uplift in working capital, but also the acquisition of premium cooked and roasted meat producer Kingston Foods, which is intended to diversify the product range in a growing market and broaden the customer base.
As previously announced, Adam Couch succeeds Bernard Hoggarth as chief executive officer at today’s AGM.
A company statement said: “With experienced management at all levels of the group, a strong range of products, a well-invested asset base and a robust financial position, the board, while mindful of the continuing challenges facing the UK consumer, remains confident in the continued long-term success and development of the business.”
City analyst Investec Securities said that the update showed continued momentum, which indicated that margins are broadly firm. However, although it pitched a conservative forecast on the company, warning that there could be inflation in pig prices to come, it was still advising buying stock.
It said: “There are a number of factors in the mix for H2. On costs there are two factors that could influence pig prices – rising feed prices and changes to EU breeding regulations. This latter point is expected to result in reduced EU supply, so could make securing price increases less of an issue if retailers appreciate that securing supply will be key. There have also been interesting developments in the competitor arena, which could provide future opportunities.”
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