Earnings upgrades for Cranswick

Food supplier posts bumper interims

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.

Great Ideas Update - CRANSWICK

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)

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