Shares of Crawshaw carved out healthy gains in early trading after it said like-for-like (LFL) sales continued to improve in the six months to July 31st despite the tough retail climate.
The Yorkshire-based meat processing firm said LFL sales increased 4% in the 6-month period while overall sales fell to £9.3m from £9.4 in 2011 after the closure of it Doncaster market site and its mobile unit.
"Given the reduction in overall sales, as indicated above, overall costs have fallen. However, the sales related reduction in overheads has been partially offset by our investment in marketing related activities and certain restructuring costs. The benefits of this investment are becoming apparent in the second half," the group explained.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Half-year profit rose to £89,892 from £71,805 previously and gross margin increased to 43.6%.
In reaction to Governments proposals to add VAT to certain, currently exempt, cooked products, the group said it intends to sell such products 'on the cool' and therefore VAT free.
"We have invested in equipment, additional staff and staff training to prepare for the changes," Crawshaw said.
The initiatives being taken have helped improve LFL sales further and in the eight weeks since the half-year LFL sales were up 7%.
Crawshaw conceded that the retail climate remains particularly challenging, and is likely to remain so for the foreseeable future. However on an encouraging note, the group still saw improvements in average spend of 9% over the last year.
CJ
