Cranswick (CWK) expects to beat its previous outlook for the year to March 2021, thanks to a rising trend towards eating at home over the past few months. As customers stayed put under widespread lockdown measures, the group – which sells pork, chicken and gourmet food products – said that revenues for the 13 weeks to 27 June were up by a quarter year-on-year, or by almost a fifth on a like-for-like basis. Trading was bolstered by increased sales from Cranswick’s new poultry facility in Eye, Suffolk.
The longer-term impact of Covid-19 remains unclear – and Cranswick also cited the lack of certainty around ongoing Brexit negotiations. Moreover, retail volumes are expected to “normalise” as the current 12-month period plays out, following on from the “exceptional demand” enjoyed in Q1. But the group’s net debt contracted during the period under review, and it still has committed, unsecured facilities of £200m to fall back on. That’s despite paying out a £500 bonus to site-based colleagues, and taking no government aid.
Cranswick has continued to spend on boosting capacity and garnering further operational efficiencies. Even so, capex should be lower in FY2021, now that the aforementioned processing factory in Suffolk has been completed.
Broker Shore Capital has lifted its full-year earnings per share (EPS) estimate by a tenth to 179p – implying growth of 14.2 per cent.
