By Benjamin Chiou
Date: Monday 21 May 2012
LONDON (ShareCast) - UK food supplier Cranswick saw sales and profits beat expectations in the year ended March 31st, as it announced that its Chief Executive Officer (CEO) would be stepping down in the summer.
Bernard Hoggarth, who joined Cranswick in 1978, has held the position of CEO since 2004. "He reaches a landmark birthday this summer and has planned for some time to reduce his input to allow him the opportunity to focus on other interests," the company announced this morning.
The firm's Chief Operating Officer, Adam Couch, who has been with the company for over 20 years, will be appointed CEO when Hoggarth steps down on August 1st at the upcoming annual general meeting.
Cranswick, whose products includes fresh pork, gourmet sausages, bacon, charcuterie and fresh sandwiches, reported revenues of £821m, up 8% on the prior year's £758m and a record for the group. The consensus forecast was for £814.9m. Most notably, strong growth was seen in sales of bacon, fresh pork and sausages, with sales in these categories increasing by 39%, 15% and 12%, respectively.
Profit before tax increased by 3% from £47.1m to £48.4m, ahead of the £44.1m analyst estimate. The figure included a non-recurring gain of £2.6m from the sale of a stake in Farmers Boy Deeside (FBD).
The group said it attempted to offer competitively priced food to consumers "so as to alleviate some of the economic pressures facing them", which had an impact on operating margins during the period. This was offset by lower financing costs and net income from a one-off gain.
"Against a background of strong raw material price increases early in the financial year and a continued challenging environment for the consumer, the company recovered strongly during the second half and recorded its highest ever sales and second best trading profit in its history," said Chairman Martin Davey.
The final dividend per share (DPS) was raised by 4.3% to 19.5p, taking the total DPS to 28.5p, up from 27.5p the year before and slightly ahead of the 28.28p payout that analysts were expecting. Net debt was reduced from £48.3m to £21.7m over the year, helped by the proceeds of the sale of the FBD shareholding. Gearing fell from 22% to just 9%.
The group's outlook statement was brief but it said that it remains well-positioned for the future. "There is a strong and experienced management team in place, a robust balance sheet, high quality assets and a range of products that, by working closely with our customers, are proving popular with the consumer. Continued focus on product development and operational efficiencies are key to maintaining this popularity in the current economic environment."
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