Cranswick's sausages have sales soaring
Pork supplier Cranswick today reported sausage sales 45% ahead of the figures from June last year.
Sizzling: Cranswick have seen sausage sales soar
A fine summer barbeque season and the lower price of pork compared with other meats such as lamb and beef have seen demand for sausages soar.
Sales of barbeque packs were up more than 18% on last year alone for Cranswick and the company said it has sold more than 3.7m extra sausages than this time last year, helping the firm to an 11% rise overall.
'Significant increases in sales were seen in sausages and bacon and growth was also seen in continental and charcuterie products, fresh pork and cooked meats,' Cranswick said.
The board was 'encouraged by the positive start to the year' and added that although production costs increased further this year, 'a combination of improved efficiencies and discussions with customers' has countered the effects.
Numis analyst Nicolas Ceron said: 'With no sign of down trading and pork a cheaper protein source than beef and lamb we think the group is likely to continue to perform strongly.'
Cranswick's share price lept on the back of the news and was finished 6.5p better at 610p.
Analysts believe that a consumer switch to pork and the 'Jamie Oliver effect' - a surging interest in good quality food spurred by celebrity chef Oliver – have had a positive impact for the firm.
The only blemish on an otherwise excellent set of trading figures was an admission that sandwich sales have bottomed out, continuing last year's second half trend. Cranswick, though, said it expects a reversal of this later in the year.
Cranswick shares were last tipped to buy by The Daily Telegraph in May after its full-year results. The shares then were trading on a March 2010 earnings multiple of 9.7 times and yielding 3.8%.
Analyst Charles Hall of KBC Peel Hunt said of the latest figures: 'We expect the good trend to continue and believe the shares to be excellent value.'
In April, Hull-based Cranswick sold its Cranswick Pet Products and Tropical Marine Centre businesses - which together form its pet activities - to management.
The firm used the cash to pay down group debt ahead of the completion of its £17.2m acquisition of pork producer Bowes of Norfolk.
Newspaper views (14 July): The talk of swine flu has not deterred barbeque fanatics and health conscious pork lovers from buying Cranswick's pork products, says The Independent. The company is flying as impressive trading performance was relayed in the first-quarter numbers published yesterday. However, this impressive performance has not yet been reflected in the stock and the Independent advises to hold for now and wait for the rest of the market to show signs of catching up.
Meanwhile, the Daily Telegraph quipped that it seemed pigs can indeed fly as Cranswick pork group excels during the swine flu epidemic. The company tabled an excellent first quarter update with rising sales and falling debt. Cranswick said that net debt had fallen to £64m from £66.6m at the end of March and sales were up in all businesses except sandwich operations. The company is cash generative and is well positioned in its market after the recent purchase of rival Bowes and the disposal of its pet food business. The shares are yielding 3.7%, which looks secure because of the group's good cash generation, the newspaper said, and urged: Buy.
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