British meat producer Cranswick has forecast annual profit at the upper end of current market estimates, betting strong domestic demand and higher pig prices would offset a fall in China volumes.
Analysts are expecting adjusted profit before tax between £153.2 million and £160.8 million (€175.4 million-€184.1 million) for the year ending 30 March 2024, according to a company-provided consensus.
Last year, the 49 year-old firm, which traces its roots to a pig farming collective in Yorkshire, reported adjusted profit before tax of £140.1 million (€160.4 million).
Strong demand in its main market UK, coupled with higher pig prices due to geopolitical factors, has helped Cranswick offset the impact of a slower-than-expected recovery in China.
Investments
Cranswick has been investing heavily in expanding production capacity, automating processes and delving into new product lines to diversify revenue sources. It recently entered the pet foods business.
The company, which produces fresh pork, bacon, gourmet sausages, poultry items and continental foods, said revenue rose 12% to £1.25 billion (€1.4 billion) for the 26 weeks ended 23 September.
The fresh pork unit accounted for 25.3% of group revenue, while the convenience division represented 39.5% of group revenue, driven by continuing inflation recovery and solid volume growth in its Cooked Meats business.
The gourmet products unit saw revenue growth of 18.0%, underpinned by strong volume growth, and represented 16.7% of group revenue, while the poultry division registered growth of 6.9%.
"Momentum has continued through the start of the third quarter as our customers and the UK consumer continue to appreciate the affordability, value for money and versatility of our core pork and poultry categories," CEO Adam Couch said in a statement.
News by Reuters, additional reporting by ESM.
