UK: Cranswick "progress" on price talks boosts shares
- PBT up 21%
- Sales up 6%
- Claims "progress" on talks with retailers
Cranswick sees high pork prices persisting
Shares in UK meat processor Cranswick were up this morning (26 November) after the company said talks to secure price increases to offset higher costs were "progressing well".
An increase in feed costs and upcoming EU legislation on animal welfare have pushed up pig prices in the UK and Europe.
Cranswick said UK pig prices are at "record" levels and have led it to ask retailers to increase prices on its products.
Chairman Martin Davey said "ongoing constructive pricing discussions" and efficiency improvements had helped to offset higher costs.
Revenue increased 6% to GBP418.6m, with underlying sales up 5%.
Chief executive Adam Couch said talks with the retailers were "progressing well". Looking ahead, he said new EU animal welfare laws could lead to "further EU herd contraction" next year.
Cranswick shares were up 8.9% to 804.81 pence at 10:32 GMT today.
CRANSWICK plc: INTERIM RESULTS
Cranswick plc ("Cranswick" or "the Company" or "the Group"), a leading UK supplier of pork products, announces its unaudited results for the six months ended 30 September 2012.
· Reported revenues up 6 per cent to £418.6m (2011: £393.9m) · Underlying revenues increased by 5 per cent * · Profit before tax rose by 21 per cent to £22.5m (2011: £18.5m) · Earnings per share up 23 per cent to 35.8p (2011: 29.2p) · Adjusted earnings per share 19 per cent higher at 35.8p (2011: 30.1p) · Dividend increased to 9.4p per share (2011: 9.0p) · Net debt £32.2m (30 Sept 2011: £48.2m) · Kingston Foods Limited acquired on 29 June 2012
- Excluding Kingston Foods
Cranswick's Chairman, Martin Davey, said: "It is pleasing to report continued growth in sales, in what continues to be a difficult economic and consumer environment, reflecting the ongoing popularity of pork with the consumer, driven by both the versatility and the low relative price of pork to other proteins.
"Kingston Foods has made an encouraging contribution to the Group since acquisition and has further extended Cranswick's customer portfolio and strengthened the Group's cooked meat production capability.
"Rising input costs were a feature of trading during the period and this has continued into the second half, although efficiency improvements brought about by investment undertaken by the business and ongoing constructive pricing discussions with customers have helped offset the full impact of this.
"The Board currently anticipates a more balanced trading performance between the first and second halves compared to last year when there was a strong second half bias. The strategy for the development of the business remains unchanged with future growth being generated by a combination of acquisitions and organic initiatives".
Original source: Cranswick plc
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