Pork and poultry processor Cranswick has posted significant growth to its revenues and profits during a turbulent six-month period for the pig sector.
In the 26 weeks to September 25, the Hull-based business’s revenues were just short of £1 billion, at £993 million, 6.6% up, while its adjusted group operating profit soared to £69.6m, a 12.3% uplift.
While its Far East export revenues were down 11% year-on-year, the company cited a ‘significant uplift’ in poultry sales following a successful capacity expansion at its plant at Eye, alongside the expansion of its convenience category following two ‘complementary bolt-on acquisitions’, which further strengthening its non-meat range, as among the drivers for its strong revenue growth.
Cranswick continues to improve its financial performance year after year. Adam Couch, its Chief Executive Officer said it had made ‘further positive and sustainable progress during the first half of the year, delivering revenue and earnings growth in an incredibly challenging operating environment’.
The interim statement said the ‘unprecedented industry wide labour and supply chain challenges’ had been ‘well managed with excellent customer service levels maintained’, while cost inflation was ‘being proactively managed and recovered’.
It said: “The profit uplift reflected the combined benefits of the additional contribution from the revenue uplift
and lower COVID-19 related costs offset by a lower contribution from Far East exports due to the ongoing suspension of the Norfolk Fresh Pork site export licence and softer pricing in the Chinese market, particularly in the second quarter of the period.
“Also, profit was dampened by inflationary pressure across a number of cost categories, particularly wage inflation, although good progress continues to be made in managing and recovering these incremental costs.”
However, with the massive pig backlog caused by a lack of staff in processing plants causing huge problems and pig producers enduring their worst financial performance on record on the back of soaring costs and, recently, falling prices, the results are likely to prompt some serious questions among pig producers. Cranswick has been making efforts to reduce the backlog, but, in some cases since the start of October, producers have receiving very low prices for pigs for markets requiring minimal butchering.
Mr Couch said: “We continue to invest in the long-term sustainability of our business. We have made excellent headway in delivering our Second Nature sustainability strategy with several major milestones reached during the period.
“These include achieving carbon neutral status across all 14 of our eligible manufacturing facilities and committing to purchasing 100% deforestation-free soya which we expect will result in a about a.20% reduction in carbon compared to the previous system.
“We also continue to invest heavily in our people, in our product range and in capacity and capability across our asset base. Our new £31m Breaded Poultry facility is on track for completion in early FY23; when completed, this will be our fourth new-build production facility commission in the last five years with a combined total investment of over £180m.
“I would like to thank our customers, suppliers and all my colleagues for their ongoing support, understanding and
resilience during this very demanding period.
“Our outlook for the current year is unchanged and we have a solid platform from which to continue Cranswick’s
successful long-term development.”