Cranswick bounced back strongly from a first-half profit warning to deliver better than expected full-year results, helped by record Christmas trading and rising demand from international customers. And with debt now at very low levels after the disposal of its stake in the Farmers Boy joint venture to partner Morrison, the pork processor looks well positioned to invest in further growth opportunities.
Asia, in particular, looks promising, with Cranswick well positioned to benefit from new direct trade links with China where so-called 'fifth quarter' products such as ears and trotters can be sold at higher prices than in the UK. Already, fifth-quarter sales via a Hong Kong agent are growing quickly along with sales of prime ribs to US customers - international sales doubled last year and now account for 3 per cent of Cranswick's revenue.
Meanwhile, UK pork demand remains strong, as customers switch from more expensive meats and even more comparably priced poultry. Finance director Mark Bottomley also pointed to UK food service as a major opportunity, and is investing to triple sales in the business over the next few years from the current £60m.
Broker Numis expects underlying full-year pre-tax profits of £51.2m and EPS of 82.2p in 2013 (from £45.7m and 72.5p last year).
CRANSWICK (CWK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 833p | MARKET VALUE: | £400m | |
| TOUCH: | 831-833p | 12-MONTH HIGH: | 855p | LOW: 589p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 512p* | NET DEBT: | 9% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 559 | 33.0 | 51.9 | 19.9 |
| 2009 | 607 | 34.7 | 40.5 | 21.7 |
| 2010 | 740 | 43.8 | 69.7 | 25.0 |
| 2011 | 758 | 47.1 | 74.5 | 27.5 |
| 2012 | 821 | 48.4 | 78.6 | 28.5 |
| % change | +8 | +3 | +6 | +4 |
Ex-div: 4 Jul Payment: 7 Sep *Includes intangible assets of £123m, or 256p a share | ||||
