Competitive pricing has driven down margins at meat supplier Cranswick.

In a trading update issued today, the company - which supplies own-label meat products as well as branded lines such as Jamie Oliver, Red Lion Foods and The Black Farmer - said it had worked with customers to develop products targeted at cash-strapped shoppers.

“This has enabled the company to deliver a range of exciting and competitively priced products,” said the company. “While driving volumes, this has had some impact on operating margin which will, as expected, be below that achieved in the previous financial year.”

Cranswick, which is due to issue its full-year results on 21 May, said performance in the final quarter was “pleasing” and had contributed to a 10% hike in underlying like-for-like sales. It added that strong cash generation in the final quarter was likely to mean year-end net debt would be lower than the £48.3m recorded a year ago.

The company also revealed it was selling its 49% stake in Farmers Boy (Deeside) Limited to Morrisons.