Food processor Cranswick has announced a 3.6% rise in half-year pre-tax profits to £46.4m after its pigmeat exports to African swine fever (ASF)-hit Asian countries soared.
The increased profits for the six months up to 30 September reflect a 7.1% increase in turnover to £770m compared with year-earlier figures.
Cranswick’s accounts show this was driven by a 65% hike in total export revenue on the back of a 94% year-on-year increase in sales to the Far East.
Cranswick’s strong start to 2019
- Total export revenue up 65%, including Far East export revenue 94% ahead
- Commissioning of £75m primary poultry processing facility in Suffolk
- Record capital expenditure of £56m
- Completion of £14m extension to Hull cooked meats facility
- Acquisition of Katsouris Brothers, broadening non-meat activities
- Adjusted profit before tax 3.6% up at £46.4m (2018: £44.8m)
- Statutory profit before tax 11.3% higher at £47.4m (2018: £42.6m)
- Statutory earnings per share up 10.2% to 73.2p (2018: 66.4p)
- Interim dividend increased by 5.0% to 16.7p (2018: 15.9p)
- Net debt of £113.7m (2018: net funds of £2.2m)
The increase was underpinned by China’s ongoing struggle with ASF, which has devastated its pig production capacity, and the resulting supply vacuum has been filled by pigmeat-producing companies such as Cranswick.
Adam Couch, the company’s chief executive, said: “We have made a positive start to the year, with reported revenue growth of 7.1% underpinned by a very strong performance in our Far East export markets, while the UK market remains highly competitive.”
Mr Couch added that Cranswick had made record half-yearly capital expenditure of £56m in investments to provide the platform for future growth.
“We have again invested at record levels across our asset base to position the business for future growth,” he said.
“The Katsouris Brothers business, acquired in July, has been integrated successfully and is performing in line with our expectations.”
Mr Couch said he remains confident about the continued focus on the strengths of the business.
“These include long-standing customer relationships, breadth, quality and relevance of our products, robust financial position and industry-leading infrastructure that will support the further successful development of Cranswick over the near and longer term.”