Strong Growth at Cranswick
UK food group Cranswick has reported a 6.6% increase in revenue to £1.07 billion with volumes on a comparable basis up 12% for the year ended 31 March 2016. Growth was supported by the contribution from Benson Park, a leading producer of premium British cooked poultry products, which was acquired in the second half of the previous financial year. Underlying revenue grew by 4.7 per cent, with underlying sales volumes ahead 10 per cent.
Well known for the production of gourmet sausages, Cranswick is involved in the breeding and rearing of premium British pigs and also supplies fresh pork, cooked meats, premium cooked poultry, air-dried bacon and gammon, continental products, sandwiches and pastry products. Products are sold primarily under retailers own labels as well as under a number of brands.
Cranswick increased adjusted group operating profit for the year by 12.8% to £66.2 million and adjusted group operating margin improved by 34 basis points to 6.2% of revenue. The improvement in group operating margin reflected lower pig prices, the positive contribution from Benson Park, an improved performance from the Pastry business and a tight focus on cost control and operational efficiencies across the group.
Each of Cranswick’s categories made a positive contribution to the overall performance. Cranswick is continuing to invest heavily, both in its infrastructure and its people, to sustain growth and continue its strategic development. The strategy of positioning Cranswick in the premium tiers of its product categories continues to underpin the success of the business. Whilst, in overall terms, volumes in the categories in which Cranswick operates are either growing slowly or in modest decline, the super-premium segments of these categories continue to materially outperform. For example, super-premium bacon and sausage are showing strong volume growth whereas the overall categories are slightly down.
Cranswick invested £34 million in its asset base during the year to provide additional capacity, improved operational efficiencies and increased flexibility in product innovation. Principal areas of investment were in fresh pork and cooked meats, including Benson Park.
The strategy for the development of Cranswick to date has been to complement organic growth with appropriate acquisitions. For instance, since the year end, Cranswick further developed its UK poultry business with the acquisition of Crown Chicken.
Martin Davey, chairman of Cranswick, comments: “The past year has been one of strong commercial growth and continued strategic development for Cranswick. This has enabled sales, which exceeded £1 billion for the first time a year ago, to progress further.”
He adds: “The business has made significant progress both commercially and strategically over the past year. There are strong customer relationships, a broadening product portfolio and growing export channels. Aligned with well-invested and efficient production facilities, skilled management teams and a strong balance sheet this gives the Board confidence that Cranswick is well positioned to meet the challenges that may arise and to continue its successful long-term development.”
