Cranswick plc
(“Cranswick” or “the Company” or “the Group”)
First quarter trading statement
Cranswick, a leading UK food producer, today provides an update on trading for the 13 weeks to 25 June 2022.
Current trading
Revenue in the 13 weeks to 25 June 2022 was 7.6 per cent ahead of the same period last year. Excluding the contribution from acquisitions made in the prior year, revenue on a like-for-like basis was 5.8 per cent higher, with strong growth in our core UK market partly offset by expected lower export revenue.
UK revenue across all four food product categories was ahead year-on-year. Substantial and widespread cost inflation continues to be proactively managed and mitigated through tight cost control and ongoing recovery.
Far East export sales were, as anticipated, lower than the same quarter last year due to market prices falling from the elevated levels experienced over the previous two years and the ongoing suspension of our Norfolk primary pork processing facility's China export licence . The China pig price has strengthened in recent weeks, albeit still below the highs of 2019 and 2020.
Grove Pet Foods made a modest contribution to reported Group revenue during the quarter.
The UK pig price increased by 27 per cent during the period, reflecting the rapid response to the sharp rise in feed prices with wheat and soya reaching all-time highs. With the support of our customers, we have reflected these higher input costs in the price we pay to both our own farming operations and our third-party producers.
Investment
We continue to invest at pace across our asset base to support future growth and further operating efficiencies. Shortly before the FY22 year end, pre-production trials started at our new £32 million Breaded Poultry facility in Hull, with full commercial roll-out starting in the first weeks of this quarter. Initial interest from retail, food service and Quick Service Restaurant customers has been strong.
'Second Nature' Sustainability
We continue to make meaningful progress in delivering our Group-wide 'Second Nature' sustainability strategy. We ranked third overall in the recently published 'Better Food Index'# and were the highest-ranking meat business. This index assesses the social, environmental, and economic performance of the UK's 30 largest food companies.
Financial position
Net debt was moderately higher than the March 2022 year end position, reflecting the Group's ongoing capital investment programme and the impact of inflation on both biological assets and net working capital. The Group remains in a robust financial position with committed, unsecured facilities of £250 million providing comfortable headroom.
Outlook
The outlook for the current financial year remains in line with the Board's expectations.
The Board is confident that continued focus on the strengths of the Company, which include its long-standing customer relationships, breadth and quality of products, robust financial position, and industry leading asset infrastructure, will support the further successful development of the Group during the current year and over the longer term.
Adam Couch, CEO of Cranswick, commented:
“We have made a positive start to the year notwithstanding the challenging operating conditions we continue to experience. Our capital investment programme remains firmly on track as we build the platform to deliver our long-term growth strategy and we continue to make meaningful progress in delivering our Group-wide 'Second Nature' sustainability strategy.
“The professionalism and commitment of our colleagues across the business is the foundation on which our successful performance is based and as always, I would like to thank them for their continued dedication and support.”
Interim results
The Company's next scheduled comment on trading will be the interim results announcement for the 26 weeks ending 24 September 2022, on Tuesday 22 November 2022.