UK meat group Cranswick has pointed to its focus on product development and delivering “value” to consumers for its improved annual sales and profits.

Cranswick booked full-year net profit of GBP37.5m (US$59.4m) for the year to the end of March, up from GBP35.3m in the previous year and beating City expectations.

CEO Bernard Hoggarth said the company had delivered “focused and well researched new product development”, particularly in its prepared meats businesses. Innovation had resulted in “business wins” across the group’s “major grocery retail customers”, he added.

Cranswick launched products including lines under its ‘Norfolk Sausage Company’ banner, 12 more Lazenby’s varieties and the introduction of ‘Black Farmer’ burgers and meat balls.

A spokesperson for the group told just-food that Cranswick aims to use innovation to continue to drive the business going forward.

“NPD is the lifeblood of any business and it is our aspiration that innovation will drive at least 50% of the growth of the business going forward,” the spokesperson said. “It will remain our focus that directional innovation with continue in every category within which we operate.”

According to Shore Capital analysts, a strong product development programme enabled Cranswick to buck the downward pressure seen in sales volumes in the UK and deliver underlying sales growth of 10%.

“In a UK food market that has suffered a contraction of volumes in 11 of the 12 months Cranswick has reported, the delivery of such robust underlying revenue growth is more than commendable in our view and reflects the ongoing levels of product innovation across the group, supported by the sustained investment in infrastructure which continues to underpin Cranswick competitive position,” Shore Capital analysts wrote in a note to investors.

Cranswick’s bacon, fresh pork and sausage categories reported the strongest growth, with sales increasing by 39%, 15% and 12%, respectively.

In particular, Cranswick said  pork benefited from a consumer environment that saw shoppers switching to “value” meats. The company said pork sales were strong over Christmas as the meat was increasingly viewed as an alternative to turkey.

Hoggarth suggested the company’s sales were also boosted by its growing export business.

“Sales to Far Eastern markets have continued to gain momentum. Exports both to Europe and further afield are becoming areas of increased focus for the group,” he revealed.

Analysts at Panmure Gordon raised their guidance for Cranswick’s full-year adjusted pre-tax profit guidance in 2012/13 by GBP2m and predicted profit before tax would rise to GBP48.1m next year, compared to GBP45.6m this year. Panmure’s 2014 PBT guidance remained unchanged at GBP50m.

“We believe that Cranswick remains well placed to deliver mid single digit revenue growth given that pork is likely to remain an attractive source of protein for value focussed UK consumers, as well as benefiting from increasing export opportunities,” Panmure analyst Damian McNeela said.

Meanwhile, Cranswick also confirmed Hoggarth will step down as chief executive this summer after 34 years with the company to be replaced by COO Adam Couch.

Couch was appointed COO last year as part of the board’s succession planning and he has worked at Cranswick for the past 20 years.

The appointment was welcomed by Shore Capital analysts, who said Couch had  “considerable experience within the group and the pork industry”.

“In our view Mr Couch’s appointment represents a continuum and consistency of strategy within Cranswick. We are also pleased that Cranswick will not lose Mr Hoggarth’s considerable experience altogether, as he will take up a part time role as commercial director,” the analysts said.

Commenting on his departure, Hoggarth said he was “extremely proud” of Cranswick’s achievements.

“I have had the good fortune to work with a great team of dedicated and innovative colleagues, whose commitment, vision and teamwork have made the business what it is today. I hand over to Adam Couch, a colleague of many years. I admire Adam’s energy and ambition for the business and I am sure that Cranswick will continue to prosper under his stewardship,” he said.