LONDON (Alliance News) - British food producer Cranswick PLC Monday reported a 16% increase in pretax profit in its recent financial year, driven by strong sales growth for it fresh pork, bacon and its cooked-meat products, supported by market share gains and new product development.
The UK pork products supplier recorded a pretax profit of GBP54.8 million for the year ended March 31, up from GBP47.3 million a year earlier, as revenues rose 14% in the period to GBP994.9 million from GBP875.2 million.
The group raised its dividend for the year by 7% to 32.0 pence.
"This has been a positive, albeit challenging, year for Cranswick. The business had to contend with record input prices, the impact on its customer base of the changing dynamics of UK food retailing and an environment where the consumer has been subject to ongoing financial constraints," said Chairman Martin Davey in a statement.
Cranswick said sales surged, as demand for its fresh pork, bacon and cooked meat products continued. Fresh pork sales were up 15% in the year, benefiting from new contract wins and strong export growth, while bacon sales were up 14%, driven by its premium bacon products. Sales of cooked meats rose 16% on the back of strong demand for premium air dried hams as well as strong promotional activity, the company said.
"This reflected market share gains along with further growth in those categories in which the group is positioned in the UK market," said Davey.
Elsewhere in the business, Cranswick said that pastry sales grew strongly, albeit from a low base, to more than double those of the previous year, following the move into its new Malton facility. Sausage sales were up 2%, sales of continental products up 3%, and sandwich sales up 5%, it said, following the decision to rationalise its core sandwich product range. It also said there was a growing contribution to revenues from its export business.
During the year, the group invested GBP14.4 million in its pig breeding and pig rearing activities, and GBP28 million in its infrastructure, which it said it used to improve operational efficiencies and to launch new product ranges. Over the past five years, the group has spent more than GBP130 million in capital expenditure to improve the business.
Cranswick said its new gourmet pastry facility at Malton incurred higher-than-expected start-up costs, while work continues on the extension to its Milton Keynes cooked meats facility, which it said is progressing to plan and budget and will add substantial capacity and deliver further efficiency gains.
"The company remains highly cash generative allowing it to make attractive returns to shareholders, to continue to invest in its infrastructure to build capacity and drive further operational efficiencies and to pursue earnings enhancing strategic acquisitions," the company said.
Cranswick shares were up 0.5% at 1,214.45 pence per share Monday morning.