UK pork demand boosts Cranswick
An increase in demand for UK pork has helped boost pig processor Cranswick’s volume growth, but margin pressures have stunted its profit.
Rising pig prices and higher start-up costs at its new pastry facility have led Cranswick management to expect limited change to 2014 profits, company research business Investec said in a report.
In its financial statement for the six months to 30 September 2013, Cranswick showed “very strong top line growth, with H1 expected to show 13% underlying revenue growth”, Investec analysts said. As a result, the pork business has grown its quarter one performance by 10%, the bulk of which was led by volume growth. “[This] reflects the continued consumer preference for pork but also new contract wins by Cranswick,” Investec said.
Yet the increase in pig prices, which have hit a high of 170p/kg, will have a lingering affect on the company. Cranswick told Investec that it does not expect to see a reduction in pig prices until the new year. “We had expected to see pig price ease in August (over the school holiday period), but this has not been the case, with tight supply of UK product cited as the main reason,” said Investec.
Meanwhile, Cranswick has seen its bacon and fresh pork sectors perform well, while good weather during the summer helped boost sausage performance.
- volume growth
- pig prices
- uk pork
- helped boost
- 170p kg
- revenue growth” investec
- new contract wins
- continued consumer preference
- quarter one performance
- growth” investec analysts