Cranswick sales fatten on premium foods

British food manufacturer Cranswick today reported soaring sales during the third quarter led by rising demand for premium food ranges at supermarkets in the run up to Christmas.

East Yorkshire-based Cranswick, which produces high quality premium products, including fresh pork and cooked meats, saw sales jump by 22% to £140m (€212.3m) in the three months to December 31.

Food product sales rose by 27%, with all categories showing strong progress.

Fresh pork led the sales rise, in line with traditional increased seasonal demand, followed by continental meats.

Earlier this month, Sainsbury and Tesco both reported record sales in the week before Christmas, both citing growth in their Taste The Difference and Finest premium ranges.

Cranswick supplies Sainsbury’s with Taste the Difference products, and its pre-cooked turkey range was named “Best Ready to Eat Product” at recent industry awards. It also provides sausages for the Duchy Original organic range.

Citigroup analyst James Targett said: “The numbers clearly show that trading has accelerated since the first half. This is understandable considering the strength of supermarket premium and fresh food sales over Christmas.

“We believe Cranswick is in a better position than many UK manufacturers, due to its exposure to higher growth premium products, potential for new contract wins, and ability to increase production activity.”

He added that the company may have more to gain as the Competition Commission continues its investigation into whether supermarkets’ buying power is harming producers. Pork production has so far been a major focus for the inquiry.

Sales at the company’s pet division slipped 5% during the quarter, led by disappointing bird food demand. However, the business now only accounts for 6% of the group’s total sales.

A fire at Cranswick’s Chorleywood warehouse in December caused some disruption to trade at the division, but the firm said the impact on profits would be minimal.

Charles Hall, of Panmure Gordon stockbrokers, said: “We expect the shares to continue to perform well, given the strong organic growth, weak position of competitors and the potential for further acquisitions to accelerate growth.”

Cranswick shares were almost 2% higher today.