Cranswick reveals strong results for 2013/14

Cranswick plc has reported total sales up 14% to £994.9mn and profit before tax up 16% to £54.8mn for its 2013/14 financial year.

Excluding the contribution from acquisitions, sales increased by 12%, reflecting strong growth across most of the group’s operations, driven by new product launches and a broadening customer base.

Cranswick reports that performance was affected by the impact of higher input costs, particularly in the first half of the year, but the firm’s pig rearing and breeding operations that were acquired during the year (Wayland Farms and Wold Farms, bought for £14mn), made a positive contribution to the group’s performance.

The company says its herd of outdoor pigs, which are used in its premium-range products, can can satisfy 15-20% of the group’s overall British pig requirements. This move supported the decision by one of its key retail customers to move to an all-British fresh pork offering in Auust 2013.

A combination of falling feed prices and strong demand for higher-welfare British pork helped enable Wayland Farms to make a positive contribution to the group post-acquisition, and Cranswick plans to continue to invest in its pig operations to further improve productivity and efficiencies. The UK market is currently only 50% self-sufficient in pig meat, but the company says investment in the sector should help to make inroads into this shortfall in the medium term.

Cranswick also invested £28 million in its infrastructure during the year, bringing total capital expenditure to more than £130 million during the past five years.

Fresh pork sales grew by 15% compared to the same period last year as the group saw the full year benefit of contract wins in the fourth quarter of the last financial year. Sales were also boosted by strong export volumes which increased by 10% compared to the previous year. In the lead up to Christmas, 1,000t of product were being shipped to the Far East each week.

Cranswick is making a substantial investment in its Norfolk facility to upgrade the abattoir and introduce a new rapid chiller that will increase capacity and improve yields in this area of the plant.

Sausage sales increased by 2% reflecting continued demand for the Cranswick’s premium sausage ranges. July saw a record sales week for the Lazenby’s facility for a non-Christmas period. The premium sausage category continues its impressive resilience of recent years as consumers recognise the quality proposition that high end products offer. However sausage sales to the lead customer at the Norfolk site were lower year on year and as a result the decision was taken to consolidate sausage production at the Group’s principal sausage facility in Hull.

Sales of premium beef burgers, which are produced using the same artisan skills developed for Cranswick’s gourmet sausages, also performed well during the strong summer barbecue season, with sales ahead by 24% compared to the previous year. A third burger production line has now been commissioned to meet increased demand in the forthcoming summer season.

Bacon sales were 14% higher  as sales of premium bacon continue to grow strongly as the UK consumer trades up from the standard tier category. The introduction of speciality cures and smoked products supported this growth along with ongoing development of ready to cook ranges which are now also being produced across the fresh pork, and sausage categories.

Cooked meats sales increased 16% year-on-year, with pastry sales up 138%, albeit from a low base. This followed the company’s move into the a new Malton facility built at a cost of £12mn.

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