CRANSWICK plc: INTERIM RESULTS
Strong volume-led earnings growth
26 November 2024
Cranswick plc (“Cranswick” or “the Company” or “the Group”), a leading UK food producer, today announces its unaudited results for the 26 weeks ended 28 September 2024.
| Financial Highlights1 | H1 2024 | H1 2023 | Change (reported) | Change (like-for-like)2 |
| Revenue | £1,329.9m | £1,253.7m | +6.1% | +5.8% |
| Adjusted Group operating profit | £99.6m | £85.5m | +16.5% | |
| Adjusted Group operating margin | 7.5% | 6.8% | +67bps | |
| Adjusted profit before tax | £95.8m | £81.6m | +17.4% | |
| Adjusted earnings per share | 132.1p | 112.2p | +17.7% | |
| Return on capital employed3 | 18.7% | 16.4% | +234bps | |
| Net debt (excluding IFRS 16) | £0.9m | £51.0m | -£50.1m | |
| Interim dividend per share | 25.0p | 22.7p | +10.1% | |
| Statutory measures | ||||
| Group operating profit | £94.0m | £90.8m | +3.5% | |
| Profit before tax | £90.2m | £86.9m | +3.8% | |
| Earnings per share | 124.0p | 119.5p | +3.8% | |
Financial Highlights:
- Strong reported volume-led revenue growth of 6.1% with like-for-like2 revenue growth of 5.8%.
– Revenue from core UK food business ahead by 6.4% underpinned by 7.0% volume growth.
– Poultry revenue up by 16.4% with Poultry now accounting for 19.5% of total Group sales.
– Pet food revenue 71.1% higher reflecting successful ongoing roll out of Pets at Home contract.
- 67bps increase in adjusted operating margin to 7.5%, reflecting a strong contribution from growing pig farming operations, excellent capacity utilisation and tight cost control.
- Free cash conversion1 of 110.9% with ROCE3 up 234bps to 18.7% and net debt pre-IFRS 16 down £50.1m to £0.9m.
- Outlook for the financial year ending 29 March 2025 remains in line with current market expectations4
Strategic highlights:
- Further investment in pig farming operations driving 18% increase in pig production year-on-year.
– Acquisition of a long-standing supplier of RSPCA Assured outdoor bred pigs, based in East Anglia.
– Investment across existing farming operations to drive productivity improvements.
- Excellent industry-leading customer service levels maintained
- Total capital expenditure of £47.7m
- Good progress on three earnings enhancing capital projects, with £20m spent in the period
– £25m fit out of Worsley houmous facility ongoing with initial phase successfully commissioned.
– £62m multi-phased expansion project at the Hull pork primary processing site progressing as planned.
– £27m expansion of the two added-value Hull poultry sites on track to start onboarding large new retail contract in Q4.
- £20m now committed to drive further fresh poultry growth
– Adds substantial capacity at flagship Eye facility and drives further automation.
– Delivers a material increase in incubatory capacity at the Kenninghall site.
Adam Couch, Cranswick’s Chief Executive Officer commented:
“We have delivered another strong first half performance with good volume-led growth through capacity expansion and market share gains from close alignment to our key long-standing customers and a relentless focus on quality and industry-leading service levels. I would like to thank, once again, our brilliant Cranswick colleagues for their continued support and commitment in delivering this strong performance.
“We continue to grow our poultry business and we have now committed to spending almost £50m across our vertically integrated poultry operations. We will invest £20m to increase volumes processed through our fresh poultry operations in East Anglia, alongside the substantial ongoing investment at our two added-value facilities in Hull.
“Investment in our agricultural operations continues at pace with a further acquisition completed during the period alongside ongoing organic expansion. We now have the largest pig farming business in the UK which is producing over 34,000 finished pigs per week with self-sufficiency maintained at well over 50%. We will continue to invest in our pig farming operations to ensure that we can supply the right quality and quantity of pigs to meet the need of our strategic retail customers.
“We remain on track to deliver further progress in the second half of the year. Our Christmas order book is strong and demand for our innovative products remains high as the UK consumer continues to appreciate the quality, value and versatility of our core pork and poultry ranges.
“Our continued positive progress is made possible by our industry-leading asset infrastructure, the unrivalled capability of our colleagues across the business, the breadth and quality of our product range and robust financial position. Focusing on these strengths will allow Cranswick to continue to prosper, both in the current financial year and over the longer term.”
- Adjusted and like-for-like references throughout this statement refer to non-IFRS measures or Alternative Performance Measures (‘APMs’).
- For comparative purposes, like-for-like revenue excludes the current year contribution from current and prior year acquisitions prior to the anniversary of their purchase.
- Return on capital employed is defined as adjusted operating profit divided by the sum of average opening and closing net assets, net debt/(funds), pension (surplus)/deficit and deferred tax.
- Market expectations for adjusted profit before tax as at 25 November 2024 range between £189.0m and £193.0m. The range reflects all published updated Broker analysis following the 27 September 2024 half-year trading update.