Management at Cranswick seems certain that UK consumers won't lose their appetite for pork and poultry products anytime soon – so certain that they’ve committed a record £29m in capital expenditure during the first half towards adding capacity, extending the range of products on offer, and making the business more efficient overall.
The bulk of this investment has gone towards a project to build a £54m poultry facility in Suffolk, in addition to work under way to improve the group's feed mill and hatchery facilities. The new site will double Cranswick’s capacity in poultry products, which chief executive Adam Couch said is the fastest-growing meat protein in the UK. This is borne out by underlying revenues for the segment, up by more than a fifth over the period. Another £28m is earmarked for a continental foods facility in Lancashire. This will combine two existing facilities into one and is also expected to double the capacity of what the two prior locations have been able to produce as separate entities.
The acquisition of Dunbia Ballymena in November last year helped to boost revenue from fresh pork products by 26.3 per cent, but strip out the contribution of the Ulster pork processing business and like-for-like sales were still up 12.8 per cent.
Analysts at Numis expect pre-tax profit of £90m in the year to March 2018, giving EPS of 143p per share, compared with £75.5m and 121p in FY2017.
| CRANSWICK (CWK) | ||||
| ORD PRICE: | 3,278p | MARKET VALUE: | £1.67bn | |
| TOUCH: | 3,277-3,284p | 12-MONTH HIGH: | 3,361p | LOW: 2,148p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 880p* | NET DEBT: | 4% | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 581 | 40.5 | 62.5 | 13.1 |
| 2017 | 715 | 44.5 | 70.2 | 15.1 |
| % change | +23 | +10 | +12 | +15 |
| Ex-div: | 7 Dec | |||
| Payment: | 26 Jan | |||
| *Includes intangible assets of £157m, or 309p s share | ||||
