Management at Cranswick (CWK) described the year to March 2019 as “one of consolidation”, following three years of bumper growth. The meat producer has been investing heavily in building capacity and improving efficiency in recent years but, with warnings over next year’s margins and challenging markets, the efficacy of these measures is uncertain.
The group’s capital expenditure reached a record £79m, which went towards projects such as its poultry processing facility in Eye, Suffolk and a continental foods facility in Lancashire.
On a like-for-like basis, adjusted pre-tax profits were up 2 per cent to £92m, while the operating margin expanded by 12 basis points to 6.4 per cent. Exports were also strong, with like-for-like sales up 3.1 per cent, and export volumes to the Far East rising 16.1 per cent in the year. Prices strengthened towards the end of the year as the African Swine Fever (ASF) epidemic in the region saw the Chinese pork herd decline by as much as 35 per cent.
Prices are expected to stabilise, but the local herd may take more than three years to recover its numbers. ASF was also detected in feral pigs in Belgium late last year, but management said the UK pork industry is maintaining “increased levels of biosecurity”.
Broker Peel Hunt is forecasting pre-tax profits of £85m in 2020, down from £92m this year.
| CRANSWICK (CWK) | ||||
| ORD PRICE: | 2,900p | MARKET VALUE: | £1.5bn | |
| TOUCH: | 2,898-2,900p | 12-MONTH HIGH: | 3,502p | LOW: 2,340p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 1,035p* | NET CASH: | £6.3m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.00 | 52.8 | 84 | 34.0 |
| 2016 | 1.02 | 62.1 | 92 | 37.5 |
| 2017 | 1.25 | 77.5 | 124 | 44.1 |
| 2018 | 1.46 | 88.0 | 138 | 53.7 |
| 2019 | 1.44 | 86.5 | 136 | 55.9 |
| % change | -2 | -2 | -2 | +4 |
| Ex-div: | 18 Jul | |||
| Payment: | 06 Sep | |||
| *Includes intangible assets of £154m, or 297p a share | ||||
