Revenue for the six months ending September 30 2014 was in line with the same period last year and growth across most of Cranswick’s product categories would offset poor sales of fresh pork, the company said.
Total sales for the six month period dipped by almost 5%. However, Shore Capital analyst Darren Shirley said this was because of a temporary sales slowdown in the second quarter of the year.
Investment to increase
Investment to increase capacity and boost output was also undertaken during 1H and Cranswick’s Delico cooked meats facility in Milton Keynes was brought into operation on time and on budget, it added.
Any investment to improve operational efficiencies had yielded a positive effect on Cranswick’s profits, added Shirley.
“Maybe the most important factor of Cranswick’s 1H performance is the reported recovery in EBIT [earnings before interest and taxes] margin.
“The margin recovery has benefited from a continued focus on driving manufacturing efficiencies.”
Speculation about Cranswick securing new business was picked up by Shirley, who said: “Within the bacon category, we believe Cranswick has secured new business, which should benefit the performance into the important Christmas period.”
Positive for the processor
The second half of 2014 looked positive for the processor, said Investec analyst Nicola Mallard.
“The backdrop in the UK food sector remains challenging, but Cranswick expects a good Christmas period.”
Meanwhile, the company planned to grow exports and boost the number of products it manufactures in the coming months, it said.
Yet, a continued rise in demand for British pork was essential for the success of the business over the next six months, it acknowledged.
“With experienced management at all levels of the group, a strong range of products, a well-invested asset base and a robust financial position, the board remains confident in the continued long-term success and development of the business,” Cranswick added.