FDBusiness.com

UK meat processor Cranswick increased pre-tax profit by 8% to £47.1m for the year ended March 31st 2011 on underlying sales ahead by 4% to £758m with volumes up 6%. Operating profit at £48.7m increased by 6% and at 6.4% of sales was 0.2% ahead of the level achieved last year. The increase in operating profit is attributable to a combination of sales growth and improved operational efficiency.

Sales of fresh pork, which benefited from the additional contribution from the CCF Norfolk acquisition, increased by 17%. Sausage sales grew by 7%, bacon by 17% and sandwiches by 13%. Sales of charcuterie products were 14% lower, following the decision by one retail customer to move to a direct sourcing policy. Reported cooked meat sales were 8% lower reflecting the transfer of the Deeside cooked meats business in North Wales into Farmers Boy (Deeside), part of the manufacturing division of Wm Morrison Supermarkets. Adjusting for this cooked meats sales were 8% ahead on a comparable basis.

Martin Davey, chairman of Cranswick.

During the year, Cranswick also moved into pastry products and in particular sausage rolls. Cranswick is well known as a major private label supplier to the multiple food retailers but during the year a brand marketing manager was appointed to drive the sales of branded products.

The major capital project at the Preston site near Hull was completed during the year and capacity has been increased by over 50%. In addition, the introduction of robotics, technology used for the first time in a UK fresh pork facility, has delivered significant efficiency benefits. As part of the plant’s on-going development United States Department of Agriculture (USDA) accreditation has been achieved and will allow the export of specific product groups to the US and enable the business to take advantage of substantial price differentials compared to those available in Europe. Cranswick has invested £100m in developing industry leading processing facilities over the past five years.

“This has been a very positive year for Cranswick. Record levels of sales and profitability have been achieved and substantial investment has been made in the asset base to improve efficiency and to provide the capacity for continued growth,” says Martin Davey, chairman of Cranswick. “That said, the difficulties facing the UK consumer, along with rising raw material prices and the dynamics of the competitive market in which the company operates suggests that the year to 31 March 2012 may be more demanding than usual.”