Sausage still reigns as Cranswick enjoys big lift in sales

The Hull-based group, which supplies fresh pork and gourmet sausages to the leading supermarket chains, said underlying like-for-like sales rose by five per cent in the three months to December 31.

Cranswick said volumes were ahead by 10 per cent on the same basis.

Total sales for the quarter were flat, but analysts at Shore Capital said this was against a very tough comparative of 24.9 per cent in the prior year period when Cranswick's revenues were boosted by the Bowes acquisition.

Operating margin was in line with expectations.

Chief executive Bernard Hoggarth said the new abattoir in Hull and the extension to the Lazenby's sausage facility, also in Hull, were completed during the three months.

Work is continuing at the group's air-dried bacon facility at Sherburn-in-Elmet, near Leeds.

The three facilities will give the group substantial additional capacity and should improve efficiency.

Following the capital expenditure programme, net debt increased from 42m to 54m, but Mr Hoggarth said it was comfortably below the previous year's level of 67m reflecting the strong cash generative nature of the business.

Earlier this week, Cranswick bought the freehold of its Barnsley cooked meats facility for 7.3m.

Analysts at Shore Capital said: "The company is a best in class player in its sector in our view with sustained industry leading revenue and earnings growth, so deserving a premium rating to our minds.

"The group has well invested facilities that permit strong organic growth in core categories of fresh pork, premium bacon and high-end sausages for several years to come."

Alex Sloane, at Evolution Securities, said: "We think five per cent like for like sales growth represents a resilient performance over the important Christmas period. Although the board are mindful of challenges facing the consumer this year, the company is confident in continuing the successful long-term development of the business.

"We expect UK consumers to remain highly focused on value which should continue to drive pork category growth going forward providing a tailwind for Cranswick's top line."

Cranswick is seeing strong demand as consumers switch to pork, which it has dubbed "the alternative white meat", for both health and money reasons.