Cranswick interims underpinned by strong Far East export markets

FTSE 250 food producer Cranswick reported a rise in interim profit and revenue on Tuesday and lifted its dividend as a "very strong" performance from its Far East export markets helped to offset a more difficult UK market.

In the six months to 30 September, adjusted pre-tax profit was 3.6% higher at £46.4m on revenue of £770m, up 7.1% on the first half of last year. Adjusted earnings per share increased 2.3% to 71.6p and the interim dividend was lifted 5% to 16.7p a share.

The group said that while conditions in its core UK market remained "extremely competitive", the outbreak of African Swine Fever (ASF) in its Far Eastern export markets had created the opportunity to increase sales into this region "on commercially favourable terms".

Total export revenue rose 65.2%, with exports accounting for 9.4% of group revenue during the period. Export revenue to the company's key Far Eastern markets was up 94.3%, reflecting strong demand from China following the widespread outbreak of ASF. Cranswick said it now accounts for around 60% of all UK pork meat exports to the region.

Chief executive officer Adam Couch said: "We have again invested at record levels across our asset base to position the business for future growth. The Katsouris Brothers business, acquired in July, has been integrated successfully and is performing in line with our expectations.

"We completed the build phase of our new Eye poultry facility on time and to budget with the commissioning process successfully started in early November.

"I remain confident that continued focus on the strengths of our business, which include long-standing customer relationships, breadth, quality and relevance of our products, robust financial position and industry leading infrastructure, will support the further successful development of Cranswick over the near and longer term."

At 0807 GMT, the shares were up 1.1% at 3,244.67p.

House broker Shore Capital said: "Cranswick has issued a robust set of H1 FY2020 results, which in our view offers the potential for forecast upside, as we move through the financial year, if global pig/pork prices are sustained at current elevated levels.

"Whilst so, with the important Christmas trading period ahead and the UK consumer economy still constrained plus quite mellow retail conditions, and the commissioning of the new poultry facility underway, we adopt sensible caution ahead of actual delivery. We therefore leave our FY2020 forecasts unchanged for now at CPTP of £88.0m and EPS of 137.7p."