Cranswick first quarter revenue leaps as lockdowns boost sales of home-cooked meat

Cranswick first quarter revenue leaps as lockdowns boost sales of home-cooked meat

Reuters  | Aug 17, 2020 08:50

Cranswick first quarter revenue leaps as lockdowns boost sales of home-cooked meat

By Yadarisa Shabong

(Reuters) - Meat processor Cranswick Plc (L:CWK) said on Monday it expected retail demand to normalise in the rest of the year as more people start dining out, after eating in during lockdowns helped its revenue surge 25% in the first quarter.

The company, which owns farms and supplies pork and chicken to British grocery retailers, also said outlook for the year ending March 2021 was seen exceeding expectations, while capex will be lower than last year.

Cranswick's shares were up 7% at 0737 GMT, taking gains for the year so far to 20%.

Although Cranswick said the positive revenue trend had continued into the second quarter, analysts at HSBC said they expected the trend to have "normalised somewhat" in August as Britons take advantage of the "eat out to help out" government discount programme.

Cranswick also sells meat across continents, with exports making up around 11% of revenue last year, and the company has benefited from increased prices and demand from the Far East as Chinese pig herds recover from African swine fever.

"Whilst we remain cautious about the longer-term economic impact of COVID-19 and the uncertainty surrounding the ongoing Brexit negotiations, we are well positioned to address these challenges," said Chief Executive Officer Adam Couch.

Concerns about new outbreaks stemming from contaminated food shipments have surfaced after authorities last week said two Chinese cities found traces of the new coronavirus in imported frozen food and on food packaging.

The company said safety measures introduced in March, such as social distancing, personal protective equipment and additional cleaning and hygiene standards, are well embedded and have enabled all sites to remain fully operational.

The producer of bacon, sausages, fresh pork and chicken said its food-to-go sector had been severely hit by the pandemic, but robust retail demand has countered that impact.

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