Cranswick confident about Brexit era

Cranswick is the third largest pig producer in the UKCranswick is the third largest pig producer in the UK
Cranswick is the third largest pig producer in the UK
Upmarket sausage and bacon producer Cranswick announced a big jump in exports, boosted by the weak pound and strong demand for British pork, and said it is well prepared for the Brexit era.

The Hull-based firm said exports to the Far East leaped 49 per cent while overall exports rose 38 per cent.

Cranswick’s chief executive Adam Couch said: “The Brexit era is ahead of us. There will be a degree of uncertainty.

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“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”.

Asked whether he is worried about a consumer downturn, Mr Couch said: “We are always mindful of it. We are involved with two of the best value sectors - pork and poultry. They lend themselves to a value proposition. You compare pork versus beef. They are chalk and cheese in price.”

Talking about the big increase in exports, he 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.

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“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.”

He was speaking as 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.

A​nalyst Lisa De Neve​ at Liberum said: “Cranswick’s ​20​17 statement is strong as ever.

​“It has outperformed the market with 15​ per cent​ volume growth y​ear on year​ driven by a record strategic capex program resulting into various contract wins and continued export growth. ​Following two recent major recent acquisitions (Crown and Ballymena), it has now moved into a £11m net debt position, yet there is still plenty of headroom to capture potential opportunities.​

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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 investing money in the latest food trends such as pulled pork, shredded chicken and chorizo sausages. ​The group said sausage sales​ were very strong over the year.

​Roland French at Davy Research said: “Cranswick continues to exceed our growth expectations via strong conversion of capex to sales and tight operational management.

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​“​We view today’s announcement of an incremental £25m capex spend in the current year as a signal of management’s confidence in its growth model.

​“​If Cranswick delivers on this target, it will have more than trebled capex in four years. Much of this investment is mirrored by long-term contracts with its retail customers.​”