UK meat processor Cranswick saw shares fall 2.46% today despite the company recording a 5% increase in underlying like-for-like sales during its third quarter.
Shares were down to GBP834 a share at 10:31 GMT today (1 February) even after the company said that underlying volumes were up 10% on a like-for-like basis.
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Cranswick added that its overall operating margin was in line with management’s expectations and that it “remains confident” in the “continued successful long-term development of the business”.
The processor said that its primary pork processing site and the extension to the Lazenby’s sausage facility in Hull were completed and commissioning work continues at the group’s air dried bacon facility at Sherburn-in-Elmet, near Leeds. Cranswick added that the facilities provide it with “substantial additional capacity” and the potential to deliver ongoing efficiency improvements.
The group also acquired its Wombwell cooked meat facilities for GBP7.3m on 31 January.
With the increase in working capital and capital expenditure, net debt increased to GBP54m from GBP42m during the quarter. However, the company added net debt was “comfortably below” last year’s level of GBP67m.
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By GlobalDataPeel Hunt analyst Charles Hall reacted positively to the results, saying that he sees “further good growth” for the processor due to increased share for pork, greater focus on buying British pork and market share gains. He added that the recent deal with Morrisons will release capital and should increase profits next year.
