Cranswick brings home the bacon in half year results

7th Oct 2013 07:04

UK food producer Cranswick brought home the bacon in the last half as total sales rose 15 per cent, driven by demand for pork.In a trading update for the six months to the end of September, the company said sales growth was supported by the "attractiveness, versatility and low relative price" of British pig meat. The acquisition of wholesale meat supplier Kingston Foods in June 2012 and of Wayland Farms in April 2013 also helped to boost sales during the period. Underlying turnover was 13% higher than the previous year. The group's gourmet pastry facility at Malton, North Yorkshire was fully commissioned, albeit with higher than anticipated start-up costs, expanding the range of savoury pastry products. Pig prices rose during the first quarter of the financial year, reaching a record high in July. Ongoing efficiency improvements and the strong volumes through the group's facilities offset the price rise. However, the extent of and time lag in recovering higher input costs and pastry start-up costs, are expected to result in operating profits for the first half of the year being broadly flat. During the period, the company purchased two breeding units for its pig breeding and rearing business to accommodate 3,000 sows, bringing the total number of sows owned by the company to 15,000. The bigger herd will produce around 7,000 outdoor-reared pigs each week for use in Cranswick's premium range product. Cranswick said it was also give it greater control over a "robust and integrated supply chain, with a clear focus on premium British ingredients".Net borrowings were lower despite the £13m spent on the acquisition of Wayland Farms, the substantial on-going capital investment programme and increased activity levels across the business. "The group is in a sound financial position, with committed, unsecured facilities of £100m which provide generous headroom going forward," the company said. Looking ahead, the firm expects growth on the back of a strong export trade, broadening product portfolio and an increasing demand for pork. UK pig prices are anticipated to remain at historical highs at least through to the end of the calendar year. "The financial year outturn will be, to a large extent, dependent on the group's ability to mitigate these costs through further operating efficiencies and the outcome of on-going discussions with customers," Cranswick added. RD