UK: Profits up as Cranswick weathers economic storm
Cranswick hailed the resilience of pork products in the face of the downturn as the UK group reported a "successful" set of full-year results, with rises in sales and profits.
Cranswick reported total sales up 9% over the previous year to GBP653m (US$1bn), leading to a 9% rise in pre-tax profits to GBP37.7m. Earnings per share were also up 9% at 53.7p.
Chairman Martin Davey said: "There were a number of challenges in the year including inflation, the impact of sterling's devaluation and the pressures faced by the consumer as a result of the difficult economic environment. Sales of pork products have proved resilient in the face of this not least because of pork's competitive pricing by comparison to other meats.
"Rising raw material prices were dealt with either by absorption through efficiency gains, passed on by way of higher selling prices or by a combination of both.
Analysts Investec said in a note this morning that it was rating Cranswick shares as "buy" following the results.
"Cranswick has reported a commendable 9% earnings growth in a very difficult year, coping with higher raw material costs and a deteriorating economic backdrop. We expect further organic progress this year, with some boost from recent M&A too, to give double-digit EPS growth. The share price has been hit by swine flu, but this is having no noticeable impact on the group," the analyst's note said.
The company, which last year took the decision to focus fully on its food business with the sale of the pet activities, said that reported sales for the continuing food business increased 9% to £607m million and profit before tax rose 8% to £34.7m.
Looking ahead, the company said it had started the new financial year in line with its expectations.
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