Earnings upgrades for Cranswick
Cranswick (CWK) £23.59
Gain to date: 6.5%
Original entry point: Buy at £22.16, 17 Nov 2016
Our bullish call on pork processor Cranswick (CWK) is already in the money. Excellent half year results (29 Nov) provided a catalyst for share price gains and another round of earnings upgrades for the gourmet sausages-to-gammon supplier.
Despite deflationary headwinds from a weaker UK pig price, Cranswick served up strong 24% growth in half year pre-tax profit to a forecast-beating £37.9m. This performance was driven by 16% volume growth and a maiden contribution from April’s £40m acquisition of poultry producer Crown Chicken. Reliably cash generative Cranswick also hiked the dividend 12.9% to 13.1p.
Shore Capital has nudged up its year to March 2017 pre-tax profit forecast by £1m to £73.5m for nourishing year-on-year growth of 14.1%. Moreover, factoring in a 12 month contribution from recently acquired (16 Nov) Northern Irish pork processor Dunbia Ballymena results in a £3m upgrade to £79.8m for the broker’s financial year 2018 profit forecast.
We’re running with our positive call on Cranswick, a high-quality food producer set to bring home the bacon over Christmas. (JC)
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell Youinvest.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.