Sales at upmarket sausages to bacon producer Cranswick have broken through the £1bn mark for the first time thanks to a big jump in exports and expansion into the fast growing “food to go” sector.
The Hull-based firm joins an elite group of Yorkshire firms, which includes Asda, Morrisons, Persimmon, Arla Foods and most recently JCT600, in making sales of more than £1bn.
Cranswick’s chief executive Adam Couch said: “It’s important to reach £1bn in sales and we’ve been aiming at it for a while.
“We’d like to think that now we’ve made sales of £1bn we’d be more attractive to investors.
“We’ve now had a quarter of a century of unbroken dividend growth.
“We are in a club of very few companies that can boast 25 years of dividend growth.”
Cranswick has managed to ride out an incredibly tough period for food producers by focusing on investment and innovation, coupled with lucrative acquisitions that have expanded it into new territories.
The group is particularly excited about the possibilities for its latest acquisition, Hull-based Benson Park, which specialises in providing poultry to restaurant chains such as Pret a Manger, Wagamama, Itsu, Leon and Wahaca.
The move into chicken and turkey complements its previous focus on pork.
Both are seen as cheaper and healthier than beef and lamb and Cranswick is keen to start selling chicken to its supermarket customers, which include the big four supermarkets as well as upmarket retailers such as Marks & Spencer.
Cranswick is spending £8.5m over 15 months on expanding the footprint of the Benson Park site and introducing the latest cooking and cooling techniques.
The group aims to complete the building work this autumn and then is keen to present its new premium poultry range to customers before Christmas.
“We’ll present products to retailers that we believe will blow them away,” said Mr Couch.
“We’ll add value with shredded, diced and flavoured products such as piri-piri.”
Cranswick has made a name for itself by tapping into the latest food fashions.
It has seen strong growth of its pulled pork ranges and Hog Roast products, tapping into the latest US trends but using British pork.
“It’s all about the growth of premium categories – you can have the best at affordable prices,” said Mr Couch.
The group is also seeing strong export growth, particularly outside Europe where export sales rose 23 per cent.
“The most important for us is the key Chinese market,” said Mr Couch.
“We represent 50 per cent of all pork exports to the Far East.”
The group now employs 8,500 staff in the UK, mostly in Yorkshire where it is one of the biggest employers in the Hull region.
It has also helped support the local economy by sourcing from local suppliers. Despite having sites across the country, well over half of its 200 UK pig farmers are based in East Yorkshire.
“We try to keep everything as local as possible,” said Mr Couch.
The firm also uses East Yorkshire feed suppliers, tapping back into its origins as a pig feed producer.
Revenue for the year to March 31 rose one per cent from £995m the year before to reach just over £1bn. Statutory pre-tax profit fell 3.5 per cent to £52.8m, although it rose 11 per cent to £57.8m excluding accounting charges.
Sales by value were only slightly ahead of last year despite volume growth of three per cent after the group decided to pass on lower input costs to customers.
Fresh pork sales fell 10 per cent, partly due to the loss of business with one customer at the start of year, which Cranswick said had now been recovered in full. The fall also reflected a nine per cent drop in pig prices, which was passed on.
In the sausage category, a six per cent increase was driven by premium sausages and burgers.
Analyst Nicola Mallard at Investec said: “This is another strong set of results. The business looks set to continue to build on its excellent track record of growth.”
YORKSHIRE’S COMMERCIAL GIANTS
Cranswick has broken into an elite band of Yorkshire firms with sales of over £1bn.
Leeds-based Asda and Bradford-based Morrisons were traditionally seen as the multi-billionaires in the region, but supermarket store wars have hit Morrisons particularly hard.
York-based housebuilder Persimmon is now Yorkshire’s biggest PLC following a strong growth in profits. The company reported a 23 per cent rise in revenue to £2.6bn in the year to December 31.
Over recent years a number of private companies in the region have showed you don’t need a stock market listing to make it big. Leeds-based Arla Foods has sales of £2.4bn and Nisa Retail of Scunthorpe has sales of £1.6bn.