UK meat products supplier Cranswick today (7 April) met City expectations with higher annual sales but a fall in operating margins amid “record” input costs.
In a trading update ahead of the publications of its financial results in May, Cranswick said total sales for the year to 31 March were up 13%. Excluding the impact of acquisitions, sales grew 12%.
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Despite some recovery in margins throughout the period, a spike in input costs would mean operating margins would be down on the previous fiscal year.
Nevertheless, Panmure Gordon analyst Damian McNeela said Cranswick’s update met the stockbrokers’ expectations.
McNeela said the results indicated Cranswick had seen underlying sales grow 7.5% in the fourth quarter, a slower rate of growth than the 13% seen in the company’s third quarter. However, the analyst noted Cranswick was lapping the contracts it won to supply Asda and Marks and Spencer in the previous year’s fourth quarter.
Darren Shirley, an analyst at Shore Capital, said Cranswick’s update “confirmed a robust year of trading for the group set against the backdrop of a weak UK grocery market and strongly rising UK pig prices to record levels”.
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