7th Oct 2013 08:10
LONDON (Alliance News) - Cranswick PLC Monday reported that its underlying turnover rose by 13% year-over-year in the six months ended September 30, with its fresh pork and bacon divisions growing particularly strongly.
Cranswick, which supplies fresh pork, gourmet sausages, air-dried bacon and sandwiches, said the attractiveness, versatility and low relative price of pig meat to other proteins are the drivers behind the performance of the fresh pork and bacon divisions.
However, the pork supplier said that the start-up costs of its gourmet pastry facility in Malton, North Yorkshire had been higher than anticipated, after the facility was fully commissioned during the period. Cranswick said sales continue to make "pleasing progress".
Cranswick also said its half-yearly total sales were 15% ahead when including the contribution of Kingston Foods, which Cranswick acquired in June, and Wayland Farms, which was acquired in April.
During the first half, Cranswick said it had seen strong sales growth but had to deal with the challenge of managing "further significant raw material price inflation". It said that robust demand for British pig meat was driving the increase in pig prices, which reached record highs in July.
Although the price rise was anticipated, Cranswick, which uses pork in its products, said its investment in its own pig breeding and rearing should give it greater control over the supply of pigs used in its products.
Looking ahead, Cranswick said UK pig prices are expected to remain at historical highs at least through to the end of the calendar year. Cranswick said its outlook for the financial year largely depends on its ability to mitigate its costs by increasing operating efficiency and the outcome of ongoing talks with customers. The company said it expects full-year operating profit to be similar to the figure reported last year.
Cranswick said its net borrowings were down on the previous quarter, though slightly higher than those of a year ago, despite spending GBP13 million on the acquisition of Wayland Farms, conducting a substantial ongoing capital investment programme, and increasing its activity levels across the business.
Cranswick shares were Monday quoted at 1,103.00 pence, down 43.00 pence, or 3.8%.
By Samuel Agini; [email protected]; @samuelagini
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