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 29 June 2024.
Current trading
Trading in the first quarter of the new financial year has been strong with robust demand continuing in our core UK food categories. Group reported revenue in the quarter was 6.7 per cent ahead of the same period last year driven by strong volume growth which, in turn, reflected business wins and a return to promotional activity across our customer base. Premium product ranges performed particularly well. Easing input costs have been reflected in selling prices. On a like-for-like basis1 revenue growth was 6.4 per cent.
We continue to deliver industry leading service levels and drive innovation as our customers and the UK consumer continue to appreciate the value for money, versatility and quality of our pork and poultry ranges.
Integration of our agricultural operations continues to deliver positive momentum, securing supply for customers’ pork requirements whilst enabling optimisation of cost of production and productivity, market leading farm infrastructure and animal welfare standards. During the first quarter we completed the acquisition of a long-standing existing supplier of RSPCA Assured outdoor bred pigs, based in East Anglia. These farms will be integrated into Cranswick’s Wayland Farms operation, further increasing our self-sufficiency in premium British pigs.
Export sales volumes were strongly ahead but were offset by reduced pricing in the Far East and EU albeit there are early signs that Far East prices are starting to firm.
Pet Products revenue was strongly ahead of the prior year reflecting the continued onboarding of the Pets at Home business.
Investment
We continue to invest across our asset base to drive operating efficiencies and to add capacity in readiness for new business coming on stream. This investment includes delivery of three ongoing earnings enhancing capital projects that are progressing to plan: the multi-phased expansion project at the Hull pork primary processing site; fit out of the new houmous facility at Worsley, Manchester; and expansion of value-added poultry across both Hull sites.
Financial position
Strong cash generation continued during the quarter, although, as expected, net debt was modestly higher at the quarter end compared to the March 2024 year end position. The Group remains in a robust financial position with committed, unsecured facilities of £250 million providing comfortable headroom.
Outlook
The Group has delivered strong, volume led, revenue growth in the first quarter, along with further investment in its farming operations, capacity expansion and driving operating efficiencies. The Board’s expectations for the current financial year ending 29 March 2025 are unchanged.
The Board remains confident that continued focus on the strengths of the Company, which include its long-standing customer relationships, breadth and quality of products and industry leading asset infrastructure, will support the further successful development of the Group over the longer term.
Adam Couch, CEO of Cranswick, commented:
“We have made a strong start to the year, delivering another quarter of strong revenue growth, whilst continuing to provide excellent service levels ensuring full availability of our products for our customers and the UK consumer. Our continued capital investment programme, including integration of agricultural supply chains, will further enhance operating efficiency and support UK food security as we continue to deliver on our long-term growth strategy.
“Our poultry business is growing strongly and the substantial investment we are making in our two value-added facilities in Hull will create the headroom for further expansion in this category.
“Looking ahead we continue to lay the foundations which will allow Cranswick to prosper. We have added to our pig herd during the quarter and, going forward, we expect to make further investment in our agricultural operations to ensure supply chain security and value optimisation. We expect demand for our products to remain robust through the remainder of this year and our outlook for the current year remains unchanged.”
Interim results
The Company’s next scheduled comment on trading will be the interim results announcement for the 26 weeks ending 28 September 2024, on Tuesday 26 November 2024.