Cranswick boosted revenue and pre-tax profits by 10% in the first half of the year, leading it to pump more money into major expansion projects.
The meat producer’s revenue hit in £1.5bn in the 26 weeks to 27 September, primarily driven by a 7% rise in volumes. Pre-tax profits were up to £105m.
Poultry was the standout performer – sales are up 18.5% to now make up over 20% of the group’s total revenue. While Cranswick warned of rising instances of bird flu, it said none of its farms had been affected.
Sales of its gourmet products rose 16%, with a strong contribution from Blakemans, the sausage maker it acquired in May. Pet products were up 14% following an expansion into Pets at Home.
“Cranswick continues to do what it does, delivering solid volume-driven top-line growth amidst a volatile consumer backdrop,” said RBC analyst Wassachon Udomsilpa.
Cranswick has undertaken some major infrastructure projects including £30m on two completed poultry sites, £25m on a houmous factory, and a £100m spend on a pork site now in its early stage.
“This investment will expand capacity, drive automation and enhance operating efficiencies, allowing us to strengthen our capability to deliver premium, added-value products for our customers,” said CEO Adam Couch.
It meant the company was now expecting capital spend to be £180m this year, up from an estimated £150m previously.
The investments – alongside its Blakemans acquisition in May and an extra £46m in building up stock for Christmas – meant Cranswick’s net debt increased to £127m.
The results were welcomed by markets, with the company’s share price up 3.5% this morning. Darren Shirley at Shore Capital called the business a “high-class act”.
“Cranswick is not perfect, there remains more to do to be optimal, but management at this firm regularly look in the mirror and both straightforwardly deal with challenges and hungrily seize opportunities,” he added.
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