Cranswick has pledged an £11m overhaul of its cooked meat facilities this year, having posted a 16% increase in pre-tax profits, to £26.1m.
The pork processor this morning reported adjusted sales up 15% year-on-year to £483.5m for the six months ended 30 September 2013. Adjusted pre-tax profits were up 4%.
Performance was driven by new products and customers, and underpinned by market growth in the company’s core categories, CEO Adam Couch said in a statement.
“Total capital expenditure across the Group’s four cooked meat facilities is expected to be £11m in the current financial year, reflecting the company’s growth aspirations in this category”
Fresh pork sales increased by 26%, supported by Cranswick’s new Riverside packing facility in Hull, and exports were up 30%.
Cranswick aimed to push further into Far Eastern markets, having recently commenced supply to Thailand and Vietnam.
New speciality cures and smoked products helped drive an 18% increase in bacon sales during the period, Couch added. “This growth underlines the trend of trading up to the premium bacon category, as the quality of Cranswick’s hand-cured, air-dried products continues to be appreciated.”
In cooked meats, the group posted a 13% increase in sales, against a backdrop of higher raw material prices, helped by NPD in premium ham products.
To support future growth in cooked meats, Cranswick intended to substantially increase capacity and introduce advanced cooking and slicing technology to deliver efficiency gains, Couch added. “Total capital expenditure across the Group’s four cooked meat facilities is expected to be £11m in the current financial year, reflecting the company’s growth aspirations in this category.”
Sales of Continental products were 3% lower than last year following the loss of a retail contract in the first quarter. Sales had recovered in the second quarter and the company expected continued sales improvement in the second half of the financial year, following the launch of 45 new products.
Sandwich sales were also down year-on-year, by 5%, following a “conscious decision to rationalise the core product range and develop a more focused customer strategy”, Couch said.
The impact of higher pig prices during the first half had been partially mitigated by on-going efficiency improvements, sales volume growth, acquisitions and through constructive discussions with customers, added chairman Martin Davey. However, he warned: “Prices have continued at historical highs and, as previously reported, are expected to remain so through to the end of the calendar year at least.”
The group’s adjusted operating margin in the six-month period to 30 September 2013 was 4.9%, compared to 5.5% in the same period the year before. This was due to the impact of higher pig prices and the absorption of start-up costs at the company’s new pastry facility, Davey added.
The group’s new gourmet pastry facility in Malton, North Yorkshire officially opened on 8 November, although it was commissioned during the reporting period.