Cranswick sales hit record £1bn but profit dented by charges

Pork and poultry specialist Cranswick posted a drop in statutory pre-tax profit on Monday to £52.8m for the year ended March 31st, from £54.8m in 2014.

This came despite a 0.8% rise in annual sales to £1bn from £994.9m in 2014, as pre-tax profit took a hit from a £4.2m valuation charge of the net IAS 41 biological assets, amortisation of acquired intangible assets of £0.7m and a £1.1m contingent consideration to the previous owners of Kingston Foods, which it purchased in 2012.

Revenue growth was constrained by a 10% drop in fresh pork sales. That was in part the result of the loss - since recovered - of business with one customer and a 9% decline in the average price. On the other hand, total sales volumes increased by 3%.

Earnings per share for the period came in at 83.8p from 88.3p the previous year.

However, adjusted profit before tax jumped 10.6% to £57.8m (Shore Capital: £56.4m).

Investments continue apace

Over all of 2014 the company expanded its Delico cooked meats facility in Milton Keynes on time and to budget, while carrying out a major upgrade to its Norfolk fresh pork site.

The firm invested a total of £21.1m in its asset base, bringing its total investment over the last five years to £137m.

Benson Park, a leading producer of premium British cooked poultry, was acquired for £17.7m.

Dividend keeps growing

Net debt at period end stood at £17.3m versus £17bn in the prior year.

The recommended final dividend increased 6.4% to 23.4p.

Looking ahead, chairman Martin Davey said: "Following a year of significant commercial and strategic progress for Cranswick, the Board looks forward to the opportunities that lie ahead. Cranswick benefits from some of the most efficient and well-invested production facilities in the UK food producer sector."

"This, in conjunction with our growing international export channels and strategy of diversifying our product portfolio, leaves the Board confident that Cranswick is well positioned to continue its successful long term development," he added.

For house broker Shore Capital, "Cranswick is a high quality company, with an experienced and ambitious management team, a well invested industry leading manufacturing infrastructure and very strong balance sheet. We remain of the view that Cranswick represents a core holding in the small-mid cap arena."