UK meat processor Cranswick today (26 July) admitted its annual profits would be lower than initial expectations, a warning that hit its shares.
Cranswick blamed rising input costs and “extremely challenging” market conditions for the profit warning. Shares in Cranswick had fallen 12.31% to 648.5p at 10:54 BST.
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The company did not provide specific estimates for its annual profits but said it “now expects to deliver a full-year result below its original expectations”.
Cranswick said its raw-material costs increased during the first quarter of its financial year. The group warned that a lag in recovering the costs and “other inflationary pressures” would hit operating margins for the first half.
As a result, the company said, operating profit for the first half of the financial year is expected to be lower than the first half of the previous year.
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Sales in the first quarter to 30 June were down 2% to GBP195m (US$319.7m). The company said the fall was due to the cooked meats business that was transferred into the Farmers Boy (Deeside) venture it has with Morrisons. On an underlying like-for-like basis, sales were up 5%, Cranswick said.
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By GlobalDataClick here for the full statement from Cranswick and click here for the views of City analysts on the company’s trading update.
