Cranswick lifts profit guidance but flags economic uncertainty

Cranswick has lifted annual guidance following solid first-quarter performance, but the food producer expressed caution about current economic conditions.

The Yorkshire-based business reported revenue increased by 14.7 per cent year-on-year for the 13 weeks ending 24 June thanks to stronger results by all four of its core food product segments.

Growth was driven by rising volumes of breaded poultry, fresh pork, convenience and gourmet products, compensating for a drop in cooked poultry volumes and weaker exports caused by softening seasonal demand in China.

Demand in the group’s core categories has remained strong over the past month, despite cost of living pressures facing British consumers. 

As a result, the FTSE 250 firm’s full-year outlook is now anticipated to surpass previous expectations.

Adam Couch, chief executive of Cranswick, said: ‘We have made a strong start to the year, delivering another quarter of growth during which we have again supported our customers by providing excellent service levels to ensure full availability of our products.’

Cranswick continued to be impacted by inflation, but the group noted that the pace of cost rises had begun to slow, supported by investment in automation and other efficiency measures.

Higher costs have impacted the company since the Russia’s invasion of Ukraine significantly pushed up food and fuel prices.

Many independent pork producers have scaled back or even stopped production entirely because of soaring feed costs.

The consequent drop in the size of the UK pig herd sent the average price of pigs climbing by 28 per cent during the quarter.

Cranswick said it was investing in the expansion of its herd ‘to ensure we have the required quantity and quality of pigs to service our customers’ requirements’.

Alongside this, the firm is developing its cooked poultry site to boost cooking and roasting capacity and dedicating £10million of capital investment towards its pet products division.

In January 2022, the group acquired Lincolnshire-based Grove Pet Foods, a maker of dry dog food and owner of nutrition brands Vitalin and Alpha.

Couch added: ‘Our continued positive progress reflects the substantial ongoing investment in our asset base and the quality and capability of our colleagues across the business.’

Cranswick shares were 0.9 per cent higher at £33.74 on late Monday afternoon, although their value has shrunk by around a fifth from their mid-2021 peak.

The company was a notable pandemic winner as the enforced closure of hospitality venues due to Covid-related restrictions led Britons to cook more meals at home.