A crackling Christmas for sausage maker Cranswick

Adam Couch, chief executive of CranswickAdam Couch, chief executive of Cranswick
Adam Couch, chief executive of Cranswick
Upmarket sausage producer Cranswick saw a four per cent rise in Christmas sales last year boosted by a growth in volumes and Far East exports.

The Hull-based firm said the increase in underlying sales, excluding the contribution from its Benson Park acquisition and sales from the pig breeding business, for the three months to December 31 was driven by a 10 per cent growth in volumes.

The company said it experienced ‘another strong Christmas trading period’ and it added that falling input prices were again passed on to the group’s customers.

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Meanwhile, export sales grew strongly, with volumes shipped to the Far East 28 per cent ahead of the same quarter last year.

The company, which broke the £1bn sales barrier last year, 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.

The firm has ambitious plans to start selling British bangers in China and hand cured bacon in Japan following a leap in export sales to Asia.

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At the moment, Cranswick’s sales to China are made up of ribs and products that the British consumer isn’t interested in such as offal, but chief executive Adam Couch has said that there is strong demand for British style, non-processed sausages.

Yesterday, the group said it continues to invest heavily across its asset base to increase capacity and drive further operating efficiencies.

In a statement the company said: “ Cranswick continues to work closely with its customers and to maintain its focus on service, quality and innovation to deliver exciting, competitively priced products in market conditions that are expected to remain competitive through the remainder of the financial year.”

It added: “ 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 remains confident in the continued long term success and development of the business.”

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Net debt increased from £5m to £18m during the quarter following the expected seasonal increase in working capital and ongoing capital expenditure, well below the £57m reported at the same stage last year.

The group said it is in a sound financial position with committed, unsecured facilities of £120m, providing significant headroom.

Investec analyst Nicola Mallard said the trading update made for ‘impressive reading’. She said: “The strong volume performance from Cranswick over the festive season was broadly based by product and customer.

“Whilst some of the growth reflects a contract regain, there is sufficient momentum in the wider business to see growth continue past the anniversary of the win. UK pig prices are weaker, following the typical seasonal pattern in January.”

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Sahill Shan, analyst at N+1 Singer, added: “ Cranswick’s Q3 update makes positive reading. Like-for-like growth was a healthy four per cent (boosted partly by a contract regain),

“Christmas trading proved strong and the input cost environment remains benign. We make no forecast changes today but given the positive momentum, the risk remains firmly on the upside.”