Cranswick continued to deliver a ‘strong growth’ during the last quarter of 2021, as it continues, it said, to manage the ‘unprecedented’ labour and supply chain challenges well.
In its latest quarterly statement, for the 13 weeks to December 25, 2021, the pig and poultry processor reported that its trading performance expectations in the current year were unchanged, despite the various issues the supply chain faces.
These include escalating input costs and shortages in pork plants, which, industry-wide, have resulted in thousands of pigs backing up on farms, with many pig farmers feeling they have borne the brunt of the ongoing crisis, both logistically and financially.
Cranswick said UK retail demand remained strong during the quarter, reflecting the continued shift towards greater in-home consumption as a result of Covid.
“Performance over the festive trading period was robust and comfortably ahead of the same period in 2020, reflecting a well-executed Christmas plan, supported by exemplary service levels to our customers, with unprecedented industry wide labour and supply chain challenges continuing to be well managed,” the trading statement added. “Substantial and widespread cost inflation was proactively mitigated through tight cost control and ongoing recovery.”
Much of Cranswick’s recent impressive growth has been down to its success in exporting pork to China and other Far East markets.
However, Far East export sales in Q4 were, as anticipated, lower than Q4 2020 due to falling pig prices in these markets and the ongoing suspension of Cranswick’s Norfolk pork processing facility’s China export licence.
The statement highlighted the operational and commercial challenges the pork supply chain faces, as ‘the supply of pigs at times exceeding demand and processing capacity’.
Cranswick said it was ‘working with the wider farming community to reduce the backlog of pigs on farms’ and, in the current financial year, has increased the number of pigs processed.
“Given the magnitude of this industry issue, we continue to lobby the government for sector support to help alleviate the backlog, including the reinstatement of Chinese export licences and addressing the acute shortage of skilled butchers,” it added.
However, Defra Secretary George Eustice criticised the efforts of the leading pork processors to tackle the backlog of pigs on farms this week, claiming they have not done enough to increase throughput in plants, and had not taken advantage of the opportunities provided by the Government support package announced in October.
Unchanged outlook
Overall, the board’s expectations for the group’s trading performance in the current year are unchanged.
Cranswick CEO Adam Couch said: “We have delivered another strong quarter of growth, during which we have supported our customers by delivering excellent service levels to ensure full availability of our products.
“Our performance, which built on the positive and sustainable progress delivered in the first half of the year, reflected the unstinting commitment and dedication of our colleagues across the business and I thank them for their continued support in what continues to be an incredibly challenging operating environment.
“Our outlook for the current year is unchanged and we have a solid platform from which to continue Cranswick’s successful long-term development.”
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.
The company continues to invest to grow the business. It announced earlier this week that it has acquired the Grove Pet Foods, a manufacturer of dry pet food supplying leading brands.