Cranswick serves up sizzling sales

Strong demand for bacon, sausages and cooked meat products fuelled third quarter growth at UK food supplier Cranswick.

Total sales for the three months to January 31st rose 8% from the same period last year, including the contribution from Kingston Foods, which was acquired in June 2012.

Underlying turnover for the period was up 7% from last year, underpinned by strong volume growth, the group explained.

"Sales growth of bacon, sausages and cooked meat products was particularly strong and there were positive contributions from most other categories. Export sales remained buoyant and sales of pastry products continued to show pleasing progress," Cranswick said in a statement.

However rising input costs impacted margins, with UK pig prices hitting record levels in December 2012.

The group said whilst this impacted margins initially, constructive pricing discussions with customers helped to partially mitigate the full impact.

Net debt increased from £32m to £48m during the quarter after the sharp rise in input costs, the expected seasonal increase in working capital and amid on-going capital expenditure.

During the period Cranswick's two fresh pork facilities in Hull and Norfolk were awarded export licences to China. It is also in the process to win Australian export accreditation.

The extension of its Sutton Fields cooked meats facility in Hull was completed ahead of the Christmas trading period and provided increased capacity to meet the strong sales growth.

Meanwhile development of its new pastry facility in Malton, North Yorkshire remains on schedule with first commercial production from the factory expected in late spring 2013.

"The business has a well invested asset base, loyal and skilled teams, a great range of products and a strong financial position. The Board looks forward positively to the rest of the year and the long term development of Cranswick," it said in a company statement.

CJ