Cranswick plc has unveiled a strong set of financial results for the six months to September 30, 2013. Underlying turnover was 13% ahead of the same period last year, with the fresh pork and bacon categories growing particularly strongly. The attractiveness, versatility and low relative price of pork to other proteins remain key to this positive trend.
Total sales for the six months were 15% higher after taking into account the contribution from Kingston Foods, which was acquired in June 2012 and modest third party sales made by Wayland Farms which was acquired in April 2013, primarily to meet internal requirements.
The Group’s gourmet pastry facility at Malton, North Yorkshire was fully commissioned during the period, albeit with higher than anticipated start-up costs, enabling the Company to further develop its existing business by offering a broad range of premium savoury pastry products. Sales continue to make pleasing progress.
The company said that, as expected, pig prices increased during the first quarter of the financial year. Prices increased further during July to a new record high and remained at this level throughout the second quarter.
On-going efficiency improvements and the strong volumes being processed through the Group’s facilities provided some mitigation, but the extent of and time lag in recovering these higher input costs, together with the pastry start-up costs, are expected to result in operating profits# for the first half of the year being broadly similar to those of the corresponding period last year.
During the period the Group made further investment in its pig breeding and rearing activities through the purchase of two additional breeding units accommodating 3,000 sows. The investment brings the total number of sows owned by the company to 15,000.
The enlarged herd will produce around 7,000 outdoor-reared pigs each week for use in Cranswick’s premium range products and gives Cranswick greater control over a robust and integrated supply chain, with a clear focus on premium British ingredients.
Despite the acquisition of Wayland Farms (Anglia Pig) for £13 million, net borrowings at Cranswick were down on the previous quarter end and only slightly higher than those of a year. The group reports it remains is in a sound financial position, with committed, unsecured facilities of £100 million which provide generous headroom going forward.