Cranswick reiterated its desire to continue to grow its pork production base, as it unveiled its latest financial figures showing continued strong revenue growth.
The Hull-based pig and poultry business grew its revenues by a further 14.7% over the first quarter of this financial year, continuing its uninterrupted upward trend dating back many years.
In the 13 weeks to June 24, its UK revenue was ahead year-on-year across all four of its food product categories, underpinned by positive volume momentum in its Fresh Pork, Convenience and Gourmet categories, while poultry volumes were ‘modestly below’ the equivalent period last year.
Cranswick’s Far East export sales were ‘subdued’, however, reflecting the anticipated seasonal slowdown in demand in China.
The UK pig price, among other costs for the business, continued to rise over the quarter, but Cranswick said cost inflation ‘continues to be proactively managed and mitigated through tight cost control and ongoing recovery’, albeit with the rate of inflation is now starting to slow.
“Accelerated investment in automation projects and a relentless focus on delivering cost saving initiatives, allied to the affordability and value for money of our core pork and poultry categories, continue to drive our competitive advantage,” it added.
Growing pig herd
As the UK pig herd contracts, Cranswick has been growing its own pig herd over the past two years or so. Its self-sufficiency is now approaching 50% as its continues to invest in and expand our pig herd to ensure, it said, that it has the required quantity and quality of pigs to service customers requirements.
The company, which continues to be criticised by some producers for its own role in the pig crisis, blamed feed cost rises on the back of the Ukraine war for the contraction of the pig sector and subsequent tightening of supplies that has underpinned a 28p year-on-year rise in the pig price.
“We expect further sector consolidation, and we will continue to expand our farming capability to ensure continuity of supply, full farm-to-fork traceability, leadership in response to the challenges of sustainability and maintaining the highest animal welfare standards,” the company said.
Cranswick continues to ‘invest at pace’ across its asset base to support future growth and further operating efficiencies. Ongoing investment in retail packing, slow cook capacity and other expansion and efficiency projects are well underway, alongside additional investment in its cooked poultry site.
Looking ahead, it expects planned capital investment to add ‘substantial capacity’ to its pork primary processing operations and drive further efficiencies as it looks to service its rapidly growing value-added pork business.
Initiatives under its ‘Second Nature’ sustainability strategy during the period included a continued focus on renewable energy generation, with the ongoing installation of solar panels across its production facilities; a drive towards energy and refrigeration efficiency in new and existing plants and the installation of heat pumps to maximise heat recovery.
The business, which employs more than 13,700 people across 22 UK facilities, recorded revenues of £2.3 billion and profit before tax of £139.5m during the 2022-23 financial year.
While the board remains cautious about current market and wider economic conditions, the outlook for the current financial year is now expected to be ahead of its previous expectations.
Net debt at the quarter end was modestly higher than the March 2023 year-end position, but well below the level of a year earlier. The company said it remains in a robust financial position with committed, unsecured facilities of £250 million providing comfortable headroom.
Cranswick CEO Adam Couch said: “We have made a strong start to the year, delivering another quarter of growth during which we have again supported our customers by providing excellent service levels to ensure full availability of our products.
“None of this would have been possible without the incredible support of our colleagues across the business and I thank them for their continued commitment and dedication.
“Our continued positive progress reflects the substantial ongoing investment in our asset base and the quality and capability of our colleagues across the business.”