FDBusiness.com

UK-based pork producer Cranswick is showing good growth in a challenging grocery market, with profits before tax (PBT) of £49.3m, according to assets management company Investec.

A report issued by Investec revealed Cranswick had continued to invest in assets, drive efficiencies and produce capacity for future growth. As a result, said Investec, Cranswick started the full year with a good “underlying revenue momentum”, which could stand it in good stead for more progress throughout the year.

“Pork remains an attractively priced protein and this has helped boost consumption by 2% per capita, but Cranswick has gained further share to post organic revenue growth of 7%,” the report said.

Cranswick’s interest costs fell this year and reflected its reduced net debt, which also fell by £2m to £20m. The group also made an important purchase of East Anglian Pigs (EAP) a fortnight ago, which was predicted to cost £13m including cash and debt. Investec said this purchase strengthened Cranswick’s supply chain, making it more secure.

Investec said: “The outlook for full-year 2014 looks solid. With new business added in Q4, sales momentum is good and we expect revenue to increase to around £940m from £875m. We are prudently forecasting margins are held at 5.7%. In theory, the acquisition of EAP should be margin-accretive, but pig prices are rising again – currently sitting just below 163p/kg, a new all-time high.”

As a result, it increased its forecast for 2014 by £400,000 from £52.5m PBT to £52.9m.