29th Jul 2024 13:14
(Alliance News) - Cranswick PLC continues to perform well, analysts said on Monday, after the firm disclosed a strong performance in the first quarter of its financial year.
The Hull, England-based premium food producer said revenue in the first quarter that ended June 29 was 6.7% ahead of the same period last year, although the company did not disclose figures.
Cranswick said the company has benefitted from easing input costs and strong volume growth, which reflected new business wins and a return to promotional activity across the customer base.
Premium product ranges performed particularly well, as did Pet Products, reflecting the supply deal with Pets at Home Group PLC announced in May 2023.
"Export sales volumes were strongly ahead but were offset by reduced pricing in the Far East and EU albeit there are early signs that Far East prices are starting to firm," Cranswick said.
With unsecured facilities totalling GBP250 million, the company "remains in a robust financial position" although net debt has expectedly risen to "modestly higher" levels from GBP99.4 million at year-end in March.
Chief Executive Officer Adam Couch commented: "Our continued capital investment programme, including integration of agricultural supply chains, will further enhance operating efficiency and support UK food security as we continue to deliver on our long-term growth strategy."
The company said its full-year expectations remain unchanged with management maintaining an optimistic outlook.
Analysts at Peel Hunt said Cranswick is benefiting from key customers, such as Marks and Spencer Group PLC, J Sainsbury PLC and Tesco PLC, performing well, a return to promotional activity, and some new business.
While the board’s expectations remain unchanged, the strong start to the year "provides confidence for potential upgrades through the year," the broker added.
Peel Hunt said product innovation and investment in facilities are supporting growth.
The broker retains a 'hold' rating on Cranswick although it expects the "shares should continue to perform well".
Cranswick shares were up 2.7% to 4,662.20 pence each in London on Monday.
By Jeremy Cutler, Alliance News reporter
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