Cranswick’s Benson Park deal praised by analyst

The deal gave it access to Benson Park’s food-to-go, multi-channel convenience and foodservice business, Cranswick claimed in a statement yesterday (October 23).

“We view this as a strategically interesting deal being Cranswick’s first move into a new protein category, which the company highlighted back in May 2014 would encompass part of its future growth strategy,”​ commented Investec analyst Nicola Mallard. “This looks a sensible acquisition by the well-regarded Cranswick management team.”​

Add to annual sales​

Mallard estimated the acquisition would initially add about £17.5M to annual sales and “conservatively”​ up to £43.5M in the next financial year.

The deal, the financial terms of which have not been disclosed, would be funded from its existing debt facilities, said Cranswick. It added that it expected it to modestly boost profit in the current financial year.

Cranswick ceo Adam Couch said: “A key component of the group’s long term growth strategy is to develop new product channels in its core UK market both in pork and other proteins.​

‘Important progress’​

“Today’s announcement represents important progress in that objective. This strategic investment moves Cranswick firmly into a new protein category with a well-invested business that has a strong presence, supplying premium poultry products, in the fast growing food-to-go sector.​

“David Park, md, will remain with Benson Park and we welcome David and his team to Cranswick and look forward to working with them to further develop the business.”​

Reporting on results for the six months to September 30​, Cranswick said revenue had been in line with the same period last year. The company experienced poor fresh pork sales, but said growth in other categories would offset this. Sales in the period dipped by almost 5% because of a temporary sales slowdown in the second quarter, it said.

The firm reported 12% revenue growth and 6% pre-tax profit growth in the 12 months to March 31 this year​.

Benson Park, which is based in Leads Road, Hull, can steam, roast and naturally smoked poultry meat, supplying product for sandwich fillings, pre-prepared salads and ready meals.