Rising pig prices posed the biggest challenge for Cranswick (CRK) last year - although the food producer offset much of this pressure through pricing, operational efficiencies, increased capacity and new business. Accordingly, underlying pre-tax profit - which excludes a one-off £1.8m property charge - slightly beat analysts' consensus estimates and rose 8 per cent year-on-year to £49.3m.
Sales growth was decent enough. Sausage sales rose 10 per cent, with strong demand for gourmet bangers, while fresh sales grew 5 per cent - thanks to business wins in the final quarter. Although, continental sales fell 7 per cent after the loss of business from Asda. During the period, Cranswick also purchased Kingston Foods, bought a pork processing facility in Hull and constructed a pastry plant in Yorkshire. Approval to export to Australia and China boosted export volumes by 9 per cent, too - management sees especially significant growth potential in China. Moreover, Cranswick acquired East Anglian Pigs last month - allowing it to re-enter the pig rearing sector. That deal should give Cranswick greater control over its supply chain and, therefore, traceability - which has now become a big priority for consumers.
Numis Securities expects adjusted pre-tax profit of £54.3m for 2014, giving adjusted EPS of 87.4p (2013: £49.3m/78.9p).
| CRANSWICK (CWK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,105p | MARKET VALUE: | £536m | |
| TOUCH: | 1,099-1,105p | 12-MONTH HIGH: | 1,113p | LOW: 717p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 564p* | NET DEBT: | 7% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2013 | 875 | 47.4 | 75.1 | 30.0 |
| % change | +7 | -2 | -4 | +5 |
Ex-div: 3 Jul Payment: 6 Sep *Includes intangible assets of £129m, or 266p a share | ||||
