Upmarket sausage and bacon producer Cranswick reported an impressive 21 per cent leap in like-for-like sales and said it has made a positive start to the current financial year.
The Hull-based group said overall revenue over the three months to June 30 rose 27 per cent as it managed to mitigate some of the rising input costs and said it is confident in both the outlook for the current financial year and the continued long-term success of the business.
Analysts welcomed the update.
Darren Shirley at Shore Capital said: “This is an outstanding start to the year.
“Cranswick’s first quarter trading update confirms the group continues to materially outperform in UK grocery.
“Total sales are ahead by a stunning 27 per cent, including an outstanding like-for-like contribution of 21 per cent, driven by like-for-like volume growth of 14 per cent and the return of inflation in the pork category.
“Cranswick’s growth has been broad based, with volume growth particularly strong in convenience, gourmet products and poultry.”
Cranswick said it was boosted by a strong performance in the UK, driven by robust domestic volume growth.
All of its categories contributed positively and with the strong momentum expected to continue, the FTSE-250 firm said it is confident of hitting its full year targets.
Cranswick, like other British manufacturers, has been grappling with rising input costs triggered by sterling’s collapse since last year’s Brexit vote.
The group said that it had managed to partially mitigate these higher costs.
It added that it plans to continue investing in its pork processing facilities in Preston, near Hull, and at its recently acquired Ballymena site in Northern Ireland, in a bid to drive operating efficiencies.
The group anticipates spending £70m on capital expenditure this year to support its strong growth pipeline.
It is spending £5m expanding its Hull site. It already employs 3,000 people in the Hull area.
The group is also investing money in the latest food trends such as pulled pork, shredded chicken and chorizo sausages.
Cranswick’s chief executive Adam Couch said: “With experienced management at all levels of the group, a strong range of products, a well-invested asset base and a robust financial position, the board is confident in both the outlook for the current financial year, which remains unchanged, and the continued long-term success and development of the business.”
In addition to strong UK growth, Cranswick has seen a big jump in exports, boosted by the weak pound and strong demand for British pork.
The firm believes it is well prepared for the Brexit era and its exports to the Far East have leaped 49 per cent while overall exports have risen 38 per cent.
Mr Couch said: “The Brexit era is ahead of us. There will be a degree of uncertainty.
“A lot of customers want to increase their British offering. It drives home our supply chain credentials and our customers won’t have to import.”
Cranswick is the third largest pig producer in the UK and it represents 5 per cent of the total UK pig herd.
Almost 90 per cent of the pigs produced from its two herds are bred outdoors, allowing it to provide premium pork ranges that can be guaranteed from “farm to fork”.
Talking about the big increase in exports, Mr Couch said Cranswick accounts for 60 per cent of all the pork exported to the Far East.
“We have put a huge focus on the Far East,” he said.
“It’s not just China. We are about to supply a Japanese restaurant chain with pork shoulder. We are also selling ribs to the US.”
Cranswick punches above its weight in exports as the firm account for 55 per cent of all pork exports from the UK.
Cranswick announced a 17 per cent jump in pre-tax profit to £75.5m in the year to March 31. Revenue rose 23 per cent to £1.25bn, the highest level in a decade.