Cranswick‘s third-quarter revenue was “marginally ahead” of last year despite lower pricing in what remained a “competitive” environment.
The UK pork processor said today (29 January) that Christmas trading was “strong” with December sales “well ahead year-on-year”. Cranswick added that total revenues were lifted by recently acquired poultry business Benson Park, which is performing “to plan”. The company intends to further grow Benson Park by expanding its capacity and broadening its product range. Elsewhere, export sales “continued to gain momentum”, with non-EU sales up 38% on the year.
While total sales were slightly ahead in the three months to 31 December, underlying sales dipped 3%. The company said this reflected lower input prices, which were passed on to customers. Underlying sales volumes, however, were up 2% as fresh pork “returned to growth”.
Sahill Shan, N+1 Singer Equity Research analyst, said he is reviewing a hold recommendation but added that his “bias is positive”.
“Q3 is somewhat mixed in terms of the top-line performance but we are encouraged by its ability to drive volume growth in a difficult grocery sector. Pig price deflation is negatively impacting sales but there appears to be no adverse profit impact. Going forward management is sanguine about Q4 and overall momentum. We see its leading sector position as a virtue an expect it to continue stealing market share from weaker operators in a difficult sector. We also like the diversification into the poultry sector / FOTG channel mix and see this as improving the quality of earnings.”
Cranswick shares were flat in early trade.
