Cranswick’s festive sales took off as clients tucked in

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U​PMARKET sausages to bacon firm Cranswick reported strong Christmas trading and said sales in December were well ahead of the previous year.

The Hull-based group said top sellers over the festive period included pigs in blankets (sausages wrapped in bacon), gammon joints, continental meats, premium bacon and upmarket sausages.

Chief executive Adam Couch said: “We had a very strong Christmas. We sold 250,000 packs of pigs in blankets – we picked up some M&S business on that front.

“We also saw strong sales of gammon this year, which is very much a traditional Christmas favourite as a complement to turkey or an alternative.”

The group’s focus on pork products has also been boosted by a decline in pig prices at the same time as beef prices have risen.

Mr Couch said the integration of poultry business Benson Park, which it bought last October, is going to plan.

“We bedded down Benson Park which had a very strong Christmas. We were particularly strong in sales of turkey to Pret A Manger.

“We provide all the Pret turkey and ham now. It gets us into an area of the market we’re not known for.”

Underlying sales volumes rose two per cent in the three months to December 31, helped by fresh pork sales returning to growth in its third quarter.

However, underlying revenues fell three per cent as lower pork prices (down 15 per cent) were passed on to customers.

Export sales gained momentum with sales to non-European markets up 38 per cent on last year as sales to the Far East pick up.

“Export sales were very strong, China being the main dominant feature. A third of our volume is now exported and we’re shipping 1,000 tonnes a week,” said Mr Couch.

Cranswick said its markets remain competitive, but the group is focused on innovation, quality and service.

It added that further capital investment, which was planned to take place at the time of the acquisition, will be completed during the next financial year.

It said this investment will create substantial additional capacity and enable the business to offer a broader product range and improve operating efficien- cies.

Net debt increased from £22m to £57m during the quarter, following the expected seasonal increase in working capital, the acquisition of Benson Park and ongoing capital expendi- ture.

Despite the investment in Benson Park, the firm said net debt was only £2m higher than at the end of 2013.

The group said it is in a strong financial position, with committed, unsecured facilities of £120m.

Analyst Darren Shirley at Shore Capital said: “We believe that Cranswick delivered double digit growth in sausages, high single digit growth in continental products, low single digit growth in bacon and slightly lower sales in cooked meats.

“Export sales continue to break company records with a 38 per cent year on year increase in sales to non-European markets reported, including 128 loads shipped to China in December alone.”

Analyst Nicola Mallard, at Investec, added: “The group looks well-placed to weather the competitive landscape, with a strong management team, a well-invested asset base and a healthy balance sheet.”

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