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Meat and poultry specialist Cranswick has posted a double-digit rise in first half sales on strong pricing, but profits were dented by the lag in recovering soaring inflation.

Total revenue in the 26 weeks to 24 September 2022 was £1.12bn, 12.4% higher than the £993.1m reported in the corresponding period last year.

Like-for-like revenue, which excluded the contribution from prior year acquisitions during the period, increased by 10.7%, with volumes broadly flat.

Cranswick said overall revenue growth primarily reflects recovery of “significant and widespread” cost inflation, with all four of its categories well ahead of the same period last year.

Gourmet Products revenue grew strongly reflecting successful onboarding of new customers and the rollout of products from the new Hull Cooked Bacon facility, while growth in Poultry revenue reflected the launch of a new range of breaded and coated products from the new Hull Breaded Poultry facility, partly offset by lower sales of Cooked Poultry products.

Fresh Pork revenue was 5.9% above the prior period, primarily reflecting inflation recovery driving revenue growth with volume falling only marginally from peak pandemic levels.

Fresh Pork export revenue was below the same period last year, however second quarter revenue was well ahead reflecting a modest uplift in volume and a marked improvement in pricing compared to Q1.

Convenience, which comprises Cooked Meats and Continental Products, represented 39% of group revenues, was up 13.1% year-on-year.

Gourmet Products, which comprise Sausage, Bacon, and Pastry, was 19.5% ahead of the same period last year, while Poultry was up 7.6%.

However, adjusted group operating profit slipped back 1.7% to £68.4m despite the top-line growth, with adjusted group operating margin down 88bps to 6.1%.

The lower Group operating margin reflected the short-term lag, as anticipated, in recovering inflationary pressure across several cost categories. Good progress continues to be made in managing and recovering these incremental costs.

Lower adjusted group operating profit also included a net charge of £3.1m in relation to costs associated with the product recall at the Hull Cooked Poultry facility at the start of the period.

Cranswick’s outlook for the current financial year remains unchanged.

It stated: “Notwithstanding the many challenges that we, our industry and the wider economy face, the strengths of our business, which include our diverse and long-standing customer base, breadth and quality of products and channels, robust financial position and industry leading infrastructure will support the further development of Cranswick over the longer term.”

CEO Adam Couch added: “We have made further commercial and strategic progress in what continues to be a relentlessly challenging operating environment.

“Our unwavering focus on quality, value, innovation and our people, along with our commitment to delivering great tasting food, created with passion for our customers and the UK consumer, continue to drive our competitive advantage. We continue to invest to meet the needs of our customers, building our capacity and capability whilst driving efficiency across new and existing facilities”

Cranswick shares are up 3.1% this morning to 3,180p.

Morning update

Agriculture and engineering group Carr’s has announced that, while trading remains in line with expectations, there will be a delay to the publication of its audited results for the year ended 3 September 2022 due to auditing issues.

Since the Group’s last trading update on 5 August 2022, Carr’s has continued to perform “strongly”, with performance for the year in line with expectations and ahead of the prior year.

2022 adjusted operating profit in engineering was behind the board’s expectations, as previously indicated. However, it was significantly ahead of the prior year.

In speciality agriculture, adjusted operating profit was ahead of the board’s expectations but down slightly versus the prior year due to margin erosion in the first half.

Trading for continuing group operations in the current financial year, having disposed of its agricultural supplies division, has started well, in line with the board’s expectations and ahead of 2022.

However, publication of its annual results will be delayed by the need for a separate audit of group associated company Carrs Billington Agriculture (Operations) following a change in group auditor to Grant Thornton from KPMG and PricewaterhouseCoopers.

The expected completion date for the group’s audit and publication of the Group’s FY22 audited results is now mid-January 2023, later than the 3 January 2023 deadline required by the Financial Conduct.

As a result, the Group expects that it will request in due course for the listing of the company’s shares to be temporarily suspended with effect from 7.30 a.m. on 4 January 2023.

The company intends to request a restoration of the listing of its shares on publication of its 2022 audited results.

On the markets this morning, the FTSE 100 is up 0.7% to 7,431.5pts.

Along with Cranswick, early risers include Naked Wines, up 1.5% to 94.7p, Ocado, up 1.4% to 654p and Hilton Food Group, up 1.1% to 548p.

Fallers include Just Eat, down 2.4% to 1,775p, Virgin Wines, down 1.7% to 68.3p and Compass Group, down 1.4% to 1,798.5p.

Yesterday in the City

The FTSE 100 started the week edging down 0.1% to 7,376.8pts.

Compass Group lost 1.4% to 1,824p despite posting a hike in profits as annual revenues surpassed pre-Covid levels and the business completed its recovery from the pandemic.

Risers included McBride, up 3.7% to 23.9p, FeverTree, up 3% to 1,133p, Tate & Lyle, up 2% to 740p, Pets at Home, up 1.9% to 306.6p, Unilever, up 1.8% to 4,112.5p and Reckitt Benckiser, up 1.5% to 5,900p.

Fallers included Naked Wines, down 5.1% to 93.3p, THG, down 4.9% to 63.2p, Ocado, down 4.9% to 645.2p, Marks & Spencer, down 2.9% to 119.9p, Science in Sport, down 2.7% to 14.5p, Premier Foods, down 2.2% to 107p and Just Eat, down 2% to 1,818.6p.