A turn in the commodity cycle means the prices of many goods are on the rise. For some companies this is a curse, and for others a blessing. Pork and chicken producer Cranswick (CWK) largely falls into the second category, which has re-ignited our interest in its shares. In the absence of a pre-close trading update from the company, City analysts have re-iterated their expectations for another banger year, financially speaking.
- Strong financial year just ended
- Pig price inflation
- Acquisitions boosting growth
- Strong balance sheet
- Short-term pressure on profit margins
- Superficially, share rating looks high
The group's bosses said that third-quarter trading was strong, with underlying growth "well ahead of the prior year" and the likelihood is that this momentum has continued through to the year-end. Brokerage Shore Capital expects Cranswick to report revenue growth of nearly 20 per cent, strong profitability and earnings per share (EPS) growth of around 14 per cent. At the time of the results announcement in late May, we expect the numbers will have a positive impact on the share price, so we advise topping up your holding ahead of time.