Cranswick has delivered double-digit growth in a strong half year, with huge expansion and acquisitions around its Hull homeland being made to build on the momentum.
The FTSE-250 listed pork and poultry giant, behind major supermarkets’ meats and a key supplier to the likes of McDonald’s, has seen revenues rise 12.3 per cent. The 26 weeks to September 23 generated a turnover of £1.25 billion, up from £1.1 billion in the same period in 2022. Robust returns increased margin from 6.1 per cent to 6.8 per cent, with adjusted group operating profit up 25 per cent from £68.4 million to £85.5 million.
In the period covered by Tuesday's trading update, it completed the £31.7 million buy-out of a long-established North Lincolnshire pig farming business to take self-sufficiency beyond 50 per cent. Elsham Linc, formerly owned by the Godfrey family, and based at Elsham Wold, brings 8,000 sows to the fold - an additional 3,000 pigs a week.
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To handle the uplift, a £62 million multi-phased expansion is also underway at its Preston site, east of Hull, where primary processing takes place. From there it predominantly feeds into its Helsinki Road campus - described as a centre of excellence for added value and innovation.
Adam Couch, Cranswick’s chief executive, said: “Our strong start to the year continued through the second quarter. Our relentless focus on quality, service, innovation, and managing our cost base through this extremely challenging inflationary cycle, allied to delivering exceptional customer service, has underpinned these results.
“Momentum has continued through the start of the third quarter as our customers and the 海角视频 consumer continue to appreciate the affordability, value for money and versatility of our core pork and poultry categories.
“Our continued positive progress is made possible by the substantial ongoing investment in our asset base, expansion of our pig farming operations and the quality and capability of our colleagues across the business.
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“We have an excellent track record of deploying capital having invested £600 million since 2016 in new facilities, capacity expansion and automation projects underpinned by an unrelenting focus on delivering efficiency improvements.
“I want to thank, once again, our colleagues and all our stakeholders for their continued support and commitment as we build towards what promises to be another extremely busy festive period.
“Notwithstanding the many challenges that we, our industry and the wider economy continue to experience, I am confident that the strengths of our business, which include its 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 in the current financial year and over the longer term.”
The second half of the year is traditionally the strongest, with 60 million pigs in blankets heading out of Hull alone, as well as innovation in pastry and charcuterie products - with several starring in festive adverts for the major outlets.
Outlook has been increased to “the upper end of current market consensus,” with a 5 per cent increase in full year pre-tax profits forecast. A 34th successive year of dividend growth has been confirmed, up 10.2 per cent to 22.7p per share. Analysts have upgraded their expectations on the back of an “outstanding set of results”. Shore Capital said: “In Cranswick, we see industry-leading capability meeting sustained cash generation, capital investment and significant ambitions across pork, poultry, continental foods and pet food. Medium to long-term delivery as investments mature offers material profit, returns and share price growth”.
Investec told how operating profit was 4 per cent above its expectations. “The outlook statement is positive, with a strong start to Q3, encouraging Christmas orders, a return to trading up, and helpful promotional support from the retailers,” it said.
The day's trading saw shares up 2.6 per cent, and 21 per cent year-on-year, to 3,740p.