Britons consume 20million chickens and several hundred thousand pigs every week. During lockdown, we ate even more.
Cranswick, based in East Yorkshire, was a key beneficiary of that increased appetite. One of the UK’s leading pork producers, Cranswick processes more than 3million pigs a year, creating premium sausages, bacon, joints and other treats.
The group has become a major player in the poultry market too, milling its own feed, breeding and rearing birds and processing them at a brand-new facility in Eye, Suffolk. The site was opened just a few months ago, it is now fully up and running, capable of handling more than 50million chickens a year.
Cock-a-hoop: Cranswick has an impressive dividend record, increasing payments every year for the past three decades
Last week, Cranswick’s chief executive, Adam Crouch, delivered an upbeat trading statement. Turnover in the three months to the end of June was almost 25 per cent higher than during the same period in 2019 as people stayed at home, prepared more meals from scratch and indulged in more cooked breakfasts, using Cranswick produce.
Sales have remained robust over the summer and, even if demand tails off in coming months, Crouch expects this year’s results to be ahead of previous forecasts.
Analysts responded to the trading update with enthusiasm, forecasting an 11 per cent rise in turnover to £1.85billion for the 12 months to March 31, 2021, and a 14 per cent increase in profits to £116million.
Cranswick has an impressive dividend record too, increasing payments every year for the past three decades. That looks set to continue, with brokers expecting the payout to increase from 60.4p to 64p for the current financial year, and then to 68p in 2022.
The group supplies all the main supermarkets, as well as Marks & Spencer and the discounters Aldi and Lidl.
Pork is Cranswick’s biggest sales item but its range has increased substantially in recent years, including barbecued fare, pies and pasties, and deli treats, such as olives and charcuterie.
The firm has burnished its environmental credentials too, with a commitment to minimise waste, reduce energy consumption, cut back on plastic use and, above all, promote animal welfare across the business.
The wellbeing of employees is also paramount, with thousands of key staff awarded a bonus of £500 each for their work during lockdown.
Cranswick’s emphasis on quality and sustainability attracts fans not just in the UK but overseas too. Exports are growing and China is a big customer, particularly since the spread of African swine fever almost halved the country’s pig population.
Midas verdict: Midas recommended Cranswick in 2007, when the shares were £8.45. We looked at the stock again in 2014, by which time it had risen to £11.88. Today, Cranswick shares are £37.68. The price appreciation is well deserved, as the business has come on in leaps and bounds over the past 12 years. Investors may choose to sell some stock and bank a profit, but they should keep at least 50 per cent of their shares, as Cranswick is well managed and Crouch is determined to keep on delivering the goods.
Traded on: CWK Ticker: Main market Contact: cranswick.plc.uk or 01482 275000