UK pork group Cranswick this morning (20 April) booked an increase in adjusted annual earnings and in sales. Profits exceeded analysts’ expectations. Overall, analysts offered a positive review of the results.
Shore Capital analyst Darren Shirley
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“Cranswick has reported preliminary results, for the year ended 31 March, ahead of expectations benefiting from strong revenue growth amidst continuing subdued market conditions, and reaping the reward from the its sustained capital investment programme through efficiencies and significant new business wins.
“It is worth noting, in our view that we estimate Cranswick’s H2 organic revenue growth was close to double digit, in a UK food market still suffering from falling volumes, we view this as an outstanding performance. We expect 2013 to be another year of investment across the group, forecasting GBP30m capital expenditure for the year.”
Investec analyst Nicola Mallard
“Cranswick has delivered good growth in a challenging grocery market and after absorbing higher pig prices during the year. It has continued to invest in its assets, to drive efficiencies and produce capacity for future growth. It has started FY14 with an early acquisition and good underlying revenue momentum, which looks set to underpin a further year of progress. The balance sheet remains strong.
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By GlobalData“With the group exceeding our forecast for FY13, there is some scope to modestly increase our forecast for FY14. We added in the (GBP1m) forecast benefit from [the] EAP [acquisition] last week, but add a further GBP0.35m to profit before tax to take it to GBP52.9m, with EPS of 84.1p (prev. 83.8p).”
Panmure Gordon analyst Damian McNeela
“Cranswick’s FY 2013 results are in line with expectations with adjusted profit before tax rising by 8% to GBP49.3m and adjusted EPS also 8% higher at 78.9p. A moderating UK pig price environment allows us to edge up our forecasts for FY 2014E and we believe the business is in a strong position in the UK with key competitors such as Vion and Danish Crown arguably more introspective given the recent ownership and management changes. We maintain our Hold recommendation but increase our price target from 1080p to 1200p which equates to c8.0x EV/EBITDA for CY 2014E.”
