Cranswick’s profits topped £100 million in the last financial year, as export revenue almost doubled on the back of soaring Far East sales.
The Hull-based pork and poultry processor’s statutory profit before tax grew by more than 20% to £104m in the year ended March 28, as its revenue reached £1.67bn, up 13%, like-for-like on 2019.
The company’s total export revenue grew by 92%, with Far East export revenue up by 122%, reflecting strong sales to China, as it seeks to fill the huge hole left by African swine fever.
The company also invested a record £101m in capital expenditure, which it said would provide a platform for continued growth. This included the acquisitions of pig farming businesses Packington Pork and White Rose, delivering further vertical integration, and the purchase of Mediterranean food products business Katsouris Brothers.
The commissioning of new primary poultry facility in Eye, Suffolk was completed as planned in the third quarter, with a successful ramp-up phase in the fourth quarter.
The results only catch the start of the COVID-19 crisis and Adam Couch, Cranswick’s Chief Executive Officer warned that the business continues to ‘experience and operate in the most challenging of periods’.
However, the company said it has made a ‘positive start’ to the new financial year and that its strong financial position and trading has enabled it to continue operating well within banking covenants and without recourse to any Government assistance during the past few months.
Accompanying its results, the company set out its ‘proactive and comprehensive COVID-19 action plan centred on keeping our colleagues safe, feeding the nation and supporting our local communities’.
This includes the introduction of enhanced protective measures, including provision of visors, screens in production areas, social distancing protocols and new working patterns. It will pay out a £500 bonus to each our site-based employee at the end of June ‘to recognise their essential key worker status and valued contribution throughout the pandemic”.
It said it had worked closely with its customers to ensure the continued supply of essential food products, while also providing community support, including providing sandwiches to front line NHS staff, giving food hampers to the elderly and vulnerable and making donations to local charities.
Key results
- Statutory profit before tax 20.2% up at £104.0m (2019: £86.5m)
- Revenue up 13% like-for-like to £1,667.2m (2019: £1,437.1)
- Statutory earnings per share up 17.4% to 159.1p (2019: 135.5p)
- Return on capital employed down to 16.2% (2019: 18.4%), mainly reflecting Eye poultry facility growth capex
- £200m of bank facilities providing over £100m of headroom.
Mr Couch said: “Our business is founded on our people and I would like to thank all our colleagues for their professionalism, commitment, dedication and passion. We will continue to support all Cranswick colleagues and their families who have been affected by COVID-19.
“The last 12 months has seen us deliver key steps in our diversification strategy with the successful commissioning of our Eye poultry facility and the acquisition of Katsouris Brothers which expands our non-meat activities. We also completed two further acquisitions to increase our vertical integration in pork.
“We spent a record £101 million across our asset base and this brings the total investment in our infrastructure over the last eight years to more than £400 million.
“The strong growth and strategic progress we have made over the last 12 months has been made possible by the platform we have built and the pipeline we have laid down in recent years. Our positive momentum is a reflection of the continued investment we make in our infrastructure and the quality and capability of all our colleagues.
“There has been a positive start to trading in the new financial year, though we remain mindful of the uncertainty around the longer-term effects of the COVID-19 crisis and Brexit negotiations. Nonetheless, our outlook for the current year is unchanged and we have a solid platform from which to continue Cranswick’s successful long-term development.”
NPA chairman Richard Lister said: “It is good to see one of the big pork processing companies performing so well – there is no doubt Cranswick has benefited significantly from the strong Chinese demand for UK pork. With its retail added value focus, it is also likely to have seen a further boost in recent weeks from the booming retail demand during lockdown.
“Producers will now be looking forward to seeing those rising profits shared across Cranswick’s production base.”