Consumer squeeze hits pork producer Cranswick

Cranswick, which supplies the Jamie Oliver brand as well as Sainsbury’s and Tesco, reported a 10% jump in sales in the three months to March 31 across all its products.

But the Hull-based group, which was formed by farmers in the 1970s, said while lower pricing in the period had boosted volumes it would squeeze margins this year.

Elsewhere, Cranswick said it had sold its 49% stake in cooked meats business Farmers Boy to the joint-venture’s partner supermarket Morrisons.

Cranswick said it had delivered a range of “competitively priced” products for “hard pressed, financially constrained consumers”.

But it added: “While driving volumes, this has had some impact on operating margin which, notwithstanding some recovery as the year progressed, will, as expected, be below that achieved in the previous financial year.”

The group hailed a £20 million investment drive during the year to deliver new product ranges.

Cranswick last year warned soaring pig-feed prices were hitting the business and issued a profits warning for the full year.

The company reported sales of £758 million and pre-tax profits of £47.1 million in the year to March 2011.

Shares in Cranswick were nearly 1% higher after today’s update.

Clive Black, analyst at Shore Capital, said Cranswick had delivered a “very healthy” fourth-quarter performance.

He said: “Cranswick continues to benefit from the strong value credentials of pork, relative to other protein sources such as beef and lamb, which underpins growth in our view.”