US Edition Cranswick
783½p +17
Questor says BUY
Of course, there was a note of caution in the statement.
"Difficulties facing the UK consumer, along with rising raw material prices and the dynamics of the competitive market in which the company operates, suggests that the year to March 31, 2012 may be more demanding than usual," Martin Davey, chairman, said.
However, the full-year results were slightly better than expected – as was the final dividend and level of year-end net debt.
In the year to March, revenues rose 2pc to £758m and pre-tax profits improved 8pc to £47.1m. However, when disposals and acquisitions are taken into account revenues rose 4pc.
Net debt reduced by £6.4m over the year to £48.3m, which was better than expected.
The final dividend was increased by 10pc to 18.7p, bringing the total for the year to 27.5p. The final dividend will be paid on September 2.
Cranswick also announced that it has received accreditation from the US Department of Agriculture, which will allow export of specific products to the US. This opens up a new market for its products.
Pig prices are likely to continue to rise into 2012 as feed costs rise, but the company has invested a substantial amount in its facilities in recent years and continues to be well positioned to deliver growth longer term.
The shares are trading on a March 2011 earnings multiple of 10.7 times, falling to 9.8 in 2012.
The prospective yield is 3.6pc, rising to 4pc next year.
Cranswick was first recommended at 600p on January 25, 2009, and the shares are up 31pc compared with a market up 45pc.
Questor upgraded the rating on the shares to buy on November 16 after a strong set of interim numbers. The price then was 825p, so the shares are now 5pc below this level. Questor continues to rate the shares as a buy.