Cranswick Reports Rise in Sales30 July 2013
UK - UK pig meat processor Cranswick reports that it has started the current fiscal year just as the Board had expected - an underlying turnover in the three months to 30 June was 10 per cent ahead of the same period last year.
The rise in turnover relects strong growth across most product categories, according to the company.
Total sales for the three months were 12 per cent higher after taking into account the contribution from Kingston Foods, which was acquired on 29 June 2012 and modest third party sales made by Wayland Farms Limited, formerly East Anglian Pigs Limited, which was acquired on 29 April 2013.
Operating margins in the first quarter were below those achieved during the previous financial year as a whole, reflecting higher input costs and, as was anticipated, start-up costs at the new pastry facility.
Pig prices increased during the first quarter of the financial year and have increased further during July to a new record high. The impact has been absorbed through on-going efficiency improvements and by the strong volumes processed through the Group’s facilities.
The Group’s gourmet pastry facility at Malton, North Yorkshire was completed during the period. The factory is now commissioned, enabling the Group to further develop its existing business by offering a broad range of premium savoury pastry products.
Work has also started on extending the Delico cooked meats facility in Milton Keynes. The project will provide increased capacity to meet anticipated sales growth and the investment in advanced cooking and slicing technology will deliver increased throughput and improved yields.
Net debt stood at £55 million at the quarter-end. This level was £17 million higher than at the same time last year and compared to £20 million at 31 March 2013. The increase during the quarter reflects the usual seasonal uplift in working capital, the Group’s on-going capital investment programme and the £13 million investment in Wayland Farms. The Group is in a sound financial position, with committed, unsecured facilities of £100 million which provide generous headroom going forward.
As announced on 20 May 2013, Patrick Farnsworth will stand down from his position as Non-Executive Director at today’s Annual General Meeting. Kate Allum, CEO of First Milk Limited, joined the Board as a Non-Executive Director on 1 July 2013.
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, the company said.
According to analysts Shore Capital: “Indeed, with about two-thirds of the total and USG reported by Cranswick being volume based, this is exceptionally high quality business in our view. Encouragingly, to our minds, management states that sales progress has been strong ‘across most product categories’.
“Shore Capital forecasts full-year 2013/14F total sales growth of 7.4 per cent.”
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