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Cranswick H1 Operating Profits Expected to Be Down

by 5m Editor
26 July 2011, at 10:55am

UK - UK food producer Cranswick expects first half operating profits to be lower than a year ago.

The group said it faced a challenging first quarter having to manage significant raw material price inflation in extremely demanding market conditions.

Underlying like-for-like sales for the three months to 30 June increased by 5 per cent.

Total sales for the first quarter at 3195m were 2 per cent down on the same period last year reflecting business transferred to Farmers Boy (Deeside).

During the period, most categories delivered strong growth.

Sales of continental products were lower but there were strong gains in fresh pork and bacon and continued growth in sandwiches and sausages.

Underlying sales in cooked meats were also ahead of last year.

Raw material costs increased during the quarter and are being actively managed through on-going discussions with the Group's customers.

The extent of and time lag in recovering these rising input costs together with other inflationary pressures, are expected to impact the company's operating margin during the first half.

As a consequence, the board now expects operating profits for the first half of the financial year to be lower than those of the corresponding period last year.

Net debt stood at 355m at the quarter-end, compared to 348m on 31 March.

This increase reflects a seasonal uplift in working capital.

The group is in a sound financial position, with committed, unsecured facilities of 3100m which provide generous headroom going forward.

At 9:14am, Cranswick share price was -85.5p at 654p.