Cranswick is now 40% self-sufficient in its pig production capabilities, as it has continued to invest in capacity since the spring.
The company’s interim financial results show it has seen a big hike in its revenues during the first half of the current financial year, although its profits have taken a small backwards step.
The pork and poultry processor’s revenue grew by nearly 12.4% (10.7% like-for-like) to reach £1.116 billion in the 26 weeks to September 24. However, adjusted profit before tax was down 3.4% to a still very healthy £66 million.
The hull-based company said strong revenue growth reflected ‘inflation recovery’, with like-for-like volumes in line with the prior period, as ‘broad-based inflationary pressure’ across its cost base ‘continues to be well controlled’.
Fresh Pork revenue, accounting for 25% of the total, grew by 5.9% during the period, as higher prices to its customers reflected the ‘successful pass through of higher pig prices’, which more than compensated for a 2.8% drop in volume, which was only marginally down from peak pandemic levels.
Fresh pork sales were up 11% by value in the UK market, reflecting strong retail and wholesale demand. But fresh pork export revenue was below the same period last year, although it returned to growth in the second quarter reflecting improved volumes and stronger pricing.
The company also saw strong growth in its gourmet (+19.5%), convenience (+13.1%) and poultry (+7.6%) revenues. Overall, across its categories, Cranswick’s export volumes were 4% down over the period, with retail sales, accounting for 75% of the total, up 9% up and big growth in wholesale (42%) and foodservice (39%).
Investment
It has continued to invest during the period, with total capital expenditure of £38.1m over the period to ‘add capacity, capability and drive efficiency’. Its new £32m Hull Breaded Poultry facility was successfully commissioned at the start of the period, while a third contact cooking line has been installed at its Hull Cooked Bacon facility.
The statement also highlighted further investment in the Group’s pig farming operations with self-sufficiency now more than 40%, following the purchase of an additional pig herd completed during the period, which lifted its self-sufficiency to more than 40%. Cranswick’s pig herd now totals 45,000 sows producing around 24,000 pigs per week.
“As well as enhancing security of supply this increases our ability to drive our agricultural sustainability strategy, the company said.
The statement highlighted how the SPP increased from 147p/kg at the start of year to 200p/kg by the end of September, reflecting the sharp rise in feed prices with wheat and soya prices reaching all-time highs in Q1. “With the continued support of our customers, we have reflected these higher input costs in the price that we pay both our own farming business and third-party producers,” the company said.
Cranswick also stresses that labour constraints seen in the previous year have eased with the recruitment of ‘approaching 300 colleagues’ from the Philippines employed across the Group.
Further progress
Cranswick’s chief executive Adam Couch said: “We have made further commercial and strategic progress in what continues to be a relentlessly challenging operating environment.
“Our unwavering focus on quality, value, innovation and our people, along with our commitment to delivering great tasting food, created with passion for our customers and the UK consumer, continue to drive our competitive advantage.
“We continue to invest to meet the needs of our customers, building our capacity and capability whilst driving efficiency across new and existing facilities.
“I want to thank our colleagues and all our stakeholders for their continued support and commitment and we look forward to working together to drive our shared agenda.”
He said the company’s outlook for the current financial year is unchanged.
“Notwithstanding the many challenges that we, our industry and the wider economy face, the strengths of our business, which include our diverse and long-standing customer base, breadth and quality of products and channels, robust financial position and industry leading infrastructure, will support the further development of Cranswick over the longer term,” he added.
The statement also highlighted the company’s ‘sustainability highlights’, including six major solar panel installations at manufacturing sites being approved, and progress on transitioning the fleet to clean energy through investment in electric vehicles, Bio LPG and renewable diesel.
Financial highlights – 26 weeks ended September 24:
| H1 22 | H1 21 | Change(Reported) | Change(Like-for-like†) | |||
| Revenue | £1,116.3m | £993.1m | +12.4% | +10.7% | ||
| Adjusted Group operating profit | £68.4m | £69.6m | -1.7% | |||
| Adjusted Group operating margin | 6.1% | 7.0% | -88bps | |||
| Adjusted profit before tax | £66.0m | £68.3m | -3.4% | |||
| Adjusted earnings per share | 98.6p | 103.5p | -4.7% | |||