Oversupply issues in the pork market made it more difficult for Cranswick (CWK) to bring home the bacon during the first half. Total fresh pork sales fell 5.5 per cent following reduced export and wholesale demand and an average 8 per cent decline in UK pig prices. But because finance director Mark Bottomley believes there's "no point killing pigs just to sell them at a lower price", Cranswick has scaled back the number of pigs it slaughters. Mr Bottomley also said troubles in the pig market were more to do with excess supply, rather than just lack of demand. The UK can only serve half its pork demands from domestic pigs, importing the rest, and roughly 80 per cent of Cranswick’s pigs are UK-based.
But it wasn’t all bad news for pork. Retail sales rose 4.7 per cent, with management attributing this growth to a strong barbeque season during the summer heatwave, as well as good growth from those 'added-value' convenience ranges launched with some customers. Cranswick also spent £7m improving three primary pork processing facilities, including extending its Hull site to improve capacity and production efficiency.
A record £41m was directed towards internal investment during the first six months. A chunk of this went towards a new £60m poultry facility in Suffolk, which is due for completion by the end of the financial year. Mr Bottomley said the new location would double the footprint of two previous sites which have been consolidated.
Analysts at Numis expect pre-tax profits of £94.9m during the year to March 2019, giving EPS of 151p, compared with £92.4m and 144p in FY2018.
| CRANSWICK (CWK) | ||||
| ORD PRICE: | 2,716p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 2,712-2,716p | 12-MONTH HIGH: | 3,502p | LOW: 2,644p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 976p* | NET CASH: | £2.2m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 715 | 44.5 | 70.2 | 15.1 |
| 2018 | 719 | 42.6 | 66.4 | 15.9 |
| % change | +1 | -4 | -5 | +5 |
| Ex-div: | 6 Dec | |||
| Payment: | 25 Jan | |||
| *Includes intangible assets of £155m, or 301p a share | ||||
