Cranswick has slammed the government’s response to the ongoing pig sector crisis and warned more needs to be done to support the sector.
Speaking as the pig and poultry giant reported sales in excess of £2bn for the first time, Cranswick CEO Adam Couch today said he had been “disappointed” the government’s “response to our sector’s calls for support has been so muted”.
“The rapid escalation in feed costs, together with other inflationary pressures and the well-publicised shortage of skilled butchers resulting directly from the government’s post-Brexit immigration policy, has put the pig producer sector under severe and unsustainable strain,” he pointed out.
“We have suggested ways to mitigate these challenges, including reducing exports of soft commodities and their use in bioethanol production, which have not been acted on. More needs to be done by government in the coming months to ensure that we have a viable long-term pig farming industry.”
Some 18 months after it temporarily suspended the China export licence at its Norfolk plant due to a Covid outbreak, the business was still waiting for reinstatement, Couch added, despite “intense lobbying” for exports to recommence.
However, the shortfall in the supplier’s export revenue compared with the previous year “was more than compensated for” by strong growth elsewhere in the business, he stressed.
The Hull-headquartered supplier – which introduced a major recall of poultry products earlier this month due to salmonella contamination concerns – saw revenues climb by 5.8% to just under £2.01bn for the 12 months to 26 March, according to its preliminary results, published today.
Adjusted group operating profits rose by 6.1% to £140.6m, with pre-tax profits for the year up 13.2% to £129.9m. Cranswick also increased its full-year dividend by 8% to 75.6p, continuing a 32-year streak of unbroken dividend growth by the business.
Cranswick put its increase in revenues – despite the well-documented inflationary pressures experienced by the pork and poultry sectors – down to a “significant uplift in poultry sales following the successful expansion in fresh poultry production capability at its new facility in Eye, Suffolk.
Performance was also bolstered by the “proactive” management of costs and supply chain challenges, alongside “excellent” customer service levels, it said.
All 14 of its eligible manufacturing sites were now certified carbon neutral, it added.
The financial year also saw the business invest £26m in a cooked bacon facility at Hull, while a new breaded poultry facility in the town also came online shortly after year end – part of a total capital expenditure of £93.7m across the group’s asset base.
This investment, coupled with bolt-on acquisitions in convenience and petfood, was set to further drive sales, it suggested.
The business added that production at the Hull cooked chicken facility at the centre of the salmonella outbreak had restarted this week, though a spokesman declined to comment on the causes of the outbreak.
Couch described the company’s performance as “in line with board expectations”.
“In a year which has been unprecedented in terms of the scale and breadth of challenges we have faced, we have delivered our strategy at pace and our long-term growth plan remains firmly on track,” he said.
“Notwithstanding the challenging operating conditions we continue to experience, our outlook for the group for the current year is unchanged,” Couch added. “We have a solid platform from which to continue Cranswick’s successful long-term development.”
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