Cranswick is gearing up for a hot summer of barbecues

New facilities mean that the Hull-based group can produce over seven million sausages a week and 800 packs of kebabs an hour, 24 hours a day when the weather is hot.

Cranswick's chief executive Bernard Hoggarth said the group saw a big surge in demand for barbecue food over the weekend when temperatures across the UK hit 25-28 degrees celsius.

"We had a massive weekend," he said. "We think it will be a barbecue summer ahead. After a really hard winter we usually have a really good summer. This first weekend we sold 16,000 cases of kebabs."

He was speaking yesterday as Cranswick posted a 26 per cent rise in underlying pre-tax profits to 43.8m in the year to March 31.

Revenues rose 22 per cent to 740m. The company reduced net debt by 11.9m to 54.7m.

The group also said it was encouraged by the positive start made in the current financial year.

The company, which supplies fresh pork and gourmet sausages to all the leading UK supermarkets, raised its final dividend by 16 per cent to 17p per share. The group's shares closed the day up four per cent, a rise of 32p to 827p.

Mr Hoggarth said the group has identified two distinct shoppers during the recession.

"The first is eating in rather than going out and is buying more premium products to have at home," he said.

"The second is the 'red label' shopper who is very price focused and quite prepared to switch between retailers to find the best value deals. We have the ability to operate on all these different tiers."

Consumers are spending more on air-dried bacon, premium sausages, fresh pork and ham and Cranswick believes this is set to continue.

Sales of cooked meats rose by 13 per cent, sausages by 23 per cent and bacon by 61 per cent, supporting the decision to invest in these categories in recent years. Cranswick plans to launch celebrity chef Jamie Oliver branded products including bacon, sausage and fresh pork from next month.

The group said it has had a positive response from retailers.

The company has continued to invest in its facilities and expects capital expenditure of 15m to 20m in the current financial year.

Cranswick's 12m-13m expansion project at the fresh pork facility in Hull will be completed in August and will increase the capacity by 50 per cent.

The group, which supplies Sainsbury's Taste the Difference range, expanded its business during the last year with the acquisition of family-run Bowes of Norfolk in a 17.2m deal.

As well as providing pork for Tesco's Finest, standard and value ranges, Bowes supplies the UK's main meat manufacturers, who make hams, pies, sausages, bacon and processed meats for the major retailers and restaurants.

Stripping out the impact of the deal, Cranswick sales rose by 11 per cent.

It added that pig prices during the second half of the financial year eased from the highs seen last year but were now firming again.

Analysts at Panmure Gordon said: "The company remains well placed to benefit from the growth in demand for pork products, to expand its customer base and to deliver improved operating margins from recent acquisitions and capital investments."

The brokerage kept its 'buy' rating and 880p price target on the stock.

"The continued price competitiveness of pork against the other major proteins including beef and lamb should also ensure that demand for pork remains strong and that prices remain relatively firm," said Mr Hoggarth.

A growth industry

Cranswick was formed by farmers in the early 1970s to produce pig feed.

In 1988 the board embarked on a strategy to broaden the base of the group's activities and seek opportunities to develop into related areas offering greater scope to add value.

Activities have since been extended from this agricultural base into the food sector.

The business is focused predominantly on the supply of fresh and processed food to the UK food retail, food manufacturing and food service categories.

This development has been achieved through a combination of acquisitions and subsequent organic growth, with Cranswick now supplying a range of meats, charcuterie and sandwiches to its customers from pro-duction facilities in the UK.