UK meat producer Cranswick's annual profit rises on strong demand

By Eva Mathews

(Reuters) -British meat producer Cranswick Plc reported a rise in annual profit and revenue on Tuesday on the back of higher prices, strong Christmas demand and easing cost pressures, sending its shares up 5%.

The 49 year-old firm, which traces its roots to a pig farming collective in Yorkshire, grappled with the fallout effects of the Ukraine war last year, which pushed up prices of everything from food to fuel.

Britain's cost-of-living crisis and China's snap lockdowns further exacerbated its woes, while the threat of avian flu loomed over the company. Higher prices have helped offset some of this impact, however.

Another bright spot for the company was robust holiday sales which helped margins and in offsetting the impact of lower export volumes.

"Like-for-like volumes remain well ahead of pre-pandemic levels," CEO Adam Couch said in a statement.

Shares of the company were trading at 3,288 pence by 0911 GMT, after it announced a 5% increase in annual dividend payouts to 79.4 pence.

For the medium term, the company expects revenue growth in mid-single digits.

Cranswick has been heavily investing in expanding production capacity and product lines to diversify revenue sources. It recently moved into the pet foods business.

"Looking ahead we expect to invest at these elevated levels over the next three years, with spend particularly focused on our pork primary processing operations to add substantial capacity," the company said.

Adjusted profit before tax for the 52 weeks ended March 26 rose 2.3% to 140.1 million pounds ($176.82 million) on revenue up 15.7% to 2.32 billion pounds.

"They are expanding into the ready-to-eat and breaded segments of the poultry industry, which offer higher margins," Third Bridge analyst Orwa Mohamad said.

"This not only provides additional sales opportunities but it also gives them more flexibility in case of any distressed sales or surplus issues in their primary operations."

($1 = 0.7923 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Shailesh Kuber and Susan Fenton)