Snapping up poultry company Benson Park last year has so far proved an astute move for pig-meat specialist Cranswick (CWK). The Hull-based acquisition, which produces premium products for the fast-growing food-to-go sector, helped its parent company post record first-half sales. Combined with a watchful eye on costs and operational efficiencies achieved through an ongoing investment programme - Cranswick has spent £135m in capital expenditure in the past five years - the top-line growth lifted operating margins by 60 basis points to 6 per cent.
Finance director Mark Bottomley expects the business to spend £35m in capex during the current financial year to March 2016, and roughly the same in FY2017. Part of the money is going on the company's Norfolk-based facility, which - once improved - would obtain the necessary approvals to export products to the US, in line with its Yorkshire site.
In other news, Cranswick became the sole supplier of premium bacon and gammon for a lead retailer. But it had to recognise a goodwill impairment of £4.6m in its sandwich division, which accounts for less than 5 per cent of revenues.
Analysts at Peel Hunt upgraded their forecasts and now expects pre-tax profits of £64m in the current financial year, leading to EPS of 101.9p, compared with £57.8m and 92.1p in FY2015.
| CRANSWICK (CWK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,771p | MARKET VALUE: | £880m | |
| TOUCH: | 1,762-1,770p | 12-MONTH HIGH: | 1,794p | LOW: 1,280p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 693p* | NET DEBT: | 3% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 482 | 24.7 | 39.2 | 10.6 |
| 2015 | 529 | 25.5 | 40.0 | 11.6 |
| % change | +10 | +4 | +2 | +9 |
Ex-div: 10 Dec Payment: 29 Jan *Includes intangible assets of £140m, or 282p a share | ||||
