Cranswick is set for a bumper Christmas despite Covid outbreak - Ros Snowdon

Cranswick sells upmarket sausages through the major supermarketsCranswick sells upmarket sausages through the major supermarkets
Cranswick sells upmarket sausages through the major supermarkets
The news that Cranswick, the upmarket sausage and bacon producer, has reported positive test results for Covid-19 at its Watton site in Norfolk, should not cause alarm about the firm’s financial future.

Cranswick is now understood to be testing all the 1,000 staff at the site after 144 out of 333 (43 per cent) staff who were tested returned positive results.

The Hull-based firm confirmed that a number of colleagues at its site in Watton have tested positive for Covid-19. They were tested in line with the advice given by PHE, are all asymptomatic and are currently self-isolating.

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Cranswick is continuing to test colleagues and said there will be some short term disruption at the plant.

Analyst Charles Hall at Peel Hunt said that clearly this will cause production issues in the short term given the 10-day isolation period.

Fortunately, Cranswick can make up the shortfall by increasing production at its other sites.

Analyst Clive Black at Shore Capital said Cranswick will draw more upon its Preston (Hull) and Ballymena production sites to fulfil what he believes has been very strong domestic demand for its products in recent times.

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Cranswick has already had experience of temporary, Covid-related disruption to production at its Northern Ireland plant in August.

Like then, the food company has wisely self-suspended the export of licenced goods to China from Watton as a precaution.

Mr Black said he sees this as good practice by the group.

The last thing Cranswick wants to do is to jeopardise its export markets.

Mr Hall said strong demand in the UK will largely compensate for the reduction in exports.

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Mr Black added that this unwelcome disruption and distraction does not change his expectations for Cranswick’s 2021 financial outcome.

“The strategic outlook for this demonstrably high quality commercial entity remains as bright as it ever has done in our view,” he said.

Mr Black said Cranswick has an excellent reputation as a high quality food manufacturer and it is one of the few meat processors in the world to have Class 1 Business Benchmark Farm Animal Welfare (BBFAW) status.

Cranswick always sees a strong sales boost at Christmas and this year looks like it will be a bumper festive season.

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Mr Hall said the recent tightening of lockdown restrictions across the country should ensure strong growth through supermarkets as more people work from home and cook at home.

In August, Cranswick paid out a £500 bonus to site-based colleagues to recognise their essential key worker status and valued contribution throughout the pandemic.

The bonus came as the firm reported strong trading during the lockdown period of April, May and June, with sales rising 25 per cent.

Analysts at Shore Capital said the results reflect the “excellent progress” made by the firm during lockdown, underpinned by the shift in food consumption to in-home from out-of-home consumption.

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In the 13 weeks to June 27, revenue rose 24.8 per cent per cent. Excluding the contribution from acquisitions made last year, revenue on a like-for-like basis was 19.2 per cent higher.

As a result of the current shift towards greater in-home consumption, Cranswick said retail demand has been exceptionally robust.

Folk will need spoiling this Christmas after a bruising year of lockdowns and a second coronavirus wave. Posh sausages, bacon, pork and charcuterie are a relatively cheap festive treat to cheer people up.

As the nights draw in, people will be looking for easy to prepare, hot comfort food.

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With more areas entering tier 3, the highest level of Covid lockdown, restaurants and pubs are having to close down and who knows how long this will last.

People will have no choice but to turn to home cooking and Cranswick is in an excellent place to cater for this growing lockdown demographic.

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