Cranswick plc has reported half-year revenues 9.9% higher that last year at £529.1 million in the six months to September 30. Some of that came from the company’s Benson Park poultry operation, which has now been fully integrated into the business, but underlying sales for the pork business alone was up 6.5%. Cranswick said that sales volumes of pork were up 10% year-on-year, with the difference representing the benefits of lower pork prices being passed to its customers.
The group’s operating margin was up 0.6% at 6.0%, and adjusted profits before tax were 22% higher at £31.5 million. As a result, Cranswick has increased its dividend per share by 9.4% to 11.6p.
Highlights from the company’s results for the six-month period included a 17% increase in export revenue to the Far East (from a 31% increase in volumes). With 1,000t of product now being shipped to the Far East each week, Cranswick says it accounts for more than 50% of all pig meat exports from the UK to this strategically important market. Meanwhile, phase 2 of works at its Norfolk abattoir are underway with the hope they will smooth the way for USDA accreditation and exports to the US.
The recent AHDB pulled pork advertising campaign had highlighted the way in which innovative and focused marketing could deliver positive results, Cranswick said. This initiative resulted in a 19% year-on-year increase in shoulder joint sales during the campaign.
In his operating review for the half-year, chief executive Adam Crouch said pig prices remained relatively stable during the period compared to the volatility experienced in the previous three years. The UK pig price fell 2% during the period and was on average 18% lower than during the same period last year. Despite this reduction, the UK price remains approximately 30% higher than its European equivalent, reflecting on going high demand for British pig meat.
He added that the Wayland and Wold farming businesses supplied approximately 20% of the group’s British pig requirements. Cranswick was the third largest pig producer in the UK and represents 6% of the total UK pig herd. More than 80% of the pigs produced from the two herds were bred outdoors, providing a complete farm-to-fork solution for the premium pork ranges of the group’s two largest retail customers.
Provenance and end-to-end supply chain integrity were key differentiators, enabling the group to lock in key long-term retail relationships. Improvements in productivity and prolificacy together with lower feed costs helped offset the impact of lower pig prices during the period.
Fresh pork sales grew by 15% in the period driven by the recovery of business with one of the group’s principal retail customers. Sausage sales were 5% higher supported by strong volume growth, and bacon sales were 21% ahead as continued development of the business’ hand-cured, air-dried bacon was supported by strong premium gammon sales.
The redevelopment and conversion of the former Kingston Foods site in Milton Keynes into a gammon facility was recently completed, and this will enable the business to target a new sector of the bacon and gammon market.