TIDMCWK
RNS Number : 8737G
Cranswick PLC
24 July 2023
24(th) July 2023
Cranswick plc
("Cranswick" or "the Company" or "the Group")
First quarter trading statement
Cranswick, a leading UK food producer, today provides an update
on trading for the 13 weeks to 24 June 2023.
Current trading
Trading in the first quarter of the new financial year has been
strong with demand remaining resilient in our core categories.
Revenue in the 13 weeks to 24 June 2023 was 14.7 per cent ahead of
the same period last year. Consequently, the outlook for the
current financial period is now expected to be ahead of the Board's
previous expectations.
UK revenue across all four food product categories was ahead
year-on-year, underpinned by positive volume momentum in our Fresh
Pork, Convenience and Gourmet products categories. Poultry volumes
were modestly below the equivalent period last year with lower
Cooked Poultry volumes partly offset by strong growth in Breaded
Poultry.
Export sales were lower with Far East volumes remaining subdued
reflecting the anticipated seasonal slowdown in demand in
China.
C ost inflation continues to be proactively managed and
mitigated through tight cost control and ongoing recovery, albeit
the rate of inflation is now starting to slow. Accelerated
investment in automation projects and a relentless focus on
delivering cost saving initiatives, allied to the affordability and
value for money of our core pork and poultry categories, continue
to drive our competitive advantage.
The UK pig herd has contracted significantly over recent months
in response to the rapid escalation in feed costs following the
outbreak of war in Ukraine in 2022. Therefore, many independent
producers have chosen to cut back or cease production entirely in
response to the unprecedented inflationary pressures. This
sustained tightening of supply resulted in the average UK pig price
across the quarter increasing by 28 per cent compared to the same
period last year. Our self-sufficiency is now approaching 50 per
cent as we continue to invest in and expand our pig herd to ensure
we have the required quantity and quality of pigs to service our
customers' requirements. We expect further sector consolidation,
and we will continue to expand our farming capability to ensure
continuity of supply, full farm-to-fork traceability, leadership in
response to the challenges of sustainability and maintaining the
highest animal welfare standards.
Our Pet Products business continues to make strategic progress
with the GBP10 million capital investment programme progressing to
plan. The stock build is also underway ahead of the launch into
Pets at Home later in the year.
Investment
We continue to invest at pace across our asset base to support
future growth and further operating efficiencies. Ongoing
investment in retail packing, slow cook capacity and other
expansion and efficiency projects are well underway. Additional
investment in our Cooked Poultry site will increase cooking and
roasting capacity and through innovation will enhance our ability
to deliver value-add products in the category. Looking ahead, we
expect planned capital investment to add substantial capacity to
our pork primary processing operations and drive further
efficiencies as we look to service our rapidly growing value-added
pork business.
'Second Nature' Sustainability
We made further progress in delivering our 'Second Nature'
sustainability strategy during the period. Initiatives included:
continued focus on renewable energy generation, with the ongoing
installation of solar panels across our production facilities; a
drive towards energy and refrigeration efficiency in new and
existing plants including the use of natural refrigerant, and the
installation of heat pumps to maximise heat recovery; trialling the
use of new lower carbon alternatives to LPG in our poultry sheds;
and reducing emissions of our HGV fleet with the continued
transition to renewable diesel through the use of HVO and the
electrification of trailers.
Financial position
Net debt at the quarter end was modestly higher than the March
2023 year-end position, but well below the level of a year earlier.
The Group remains in a robust financial position with committed,
unsecured facilities of GBP250 million providing comfortable
headroom.
Outlook
The Group has made a strong start to the year with momentum
continuing into the second quarter with demand remaining resilient
in our core UK categories as the UK consumer continues to recognise
the quality, value and versatility of our pork and poultry product
ranges.
Whilst the Board remains cautious about current market and wider
economic conditions, the outlook for the current financial year
ending 30 March 2024 is now expected to be ahead of its previous
expectations.
The Board is confident that continued focus on the strengths of
the Company, which include its long-standing customer
relationships, breadth and quality of products and industry leading
asset infrastructure, will support the further successful
development of the Group over the longer term.
Adam Couch, CEO of Cranswick, commented:
"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. None of this would have been possible
without the incredible support of our colleagues across the
business and I
thank them for their continued commitment and dedication.
"Our continued positive progress reflects the substantial
ongoing investment in our asset base and the quality and capability
of our colleagues across the business."
Interim results
The Company's next scheduled comment on trading will be the
interim results announcement for the 26 weeks ending 23 September
2023, on Tuesday 21 November 2023.
Enquiries:
Cranswick plc 01482 275 000
Mark Bottomley, Chief Financial
Officer
--------------------------------
Powerscourt 020 7250 1446
--------------------------------
Nick Dibden / Elizabeth Kittle cranswick@powerscourt-group.com
--------------------------------
Notes:
1. Cranswick is a leading and innovative supplier of premium,
fresh and added-value food products. The business employs over
13,700 people and operates from 22 well-invested, highly efficient
facilities in the UK. Cranswick was formed in the early 1970s by
farmers in East Yorkshire to produce animal feed and has since
evolved into a business which produces a range of high quality,
predominantly fresh food, including fresh pork, poultry,
convenience, gourmet products and pet food. The business develops
innovative, great tasting food products to the highest standards of
food safety and traceability. The Group supplies the major grocery
multiples as well as the growing premium and discounter retail
channels. Cranswick also has a strong presence in the 'food-to-go'
sector and a substantial export business. Results for the 52 weeks
to 25 March 2023 showed revenue of GBP2,323.0m and profit before
tax of GBP139.5m. For more information go to:
www.cranswick.plc.uk
2. Cranswick is committed to ensuring that its business
activities are sustainable from farm-to-fork. Our ambitious
sustainability strategy 'Second Nature' has been developed to
deliver our vision to become the world's most sustainable meat
business. Find out more at: www.thisissecondnature.co.uk
3. This announcement is based on information sourced from unaudited management accounts.
4. This announcement contains certain forward-looking statements
with respect to the financial conditions, results of operations and
businesses of Cranswick. These statements involve risk and
uncertainty because they relate to events and depend upon
circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. Nothing in this announcement should be construed as a
profit forecast.
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END
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