Sausage maker Cranswick plc (LON:CWK) has issued a profit upgrade for its current year as strong Christmas trading and an exceptional performance in its export division drove earnings higher.
The FTSE 250 firm said in an unscheduled trading update that the “robust performance” in its interim results had continued over the important festive trading period, with positive growth across each of its four product categories.
READ: Cranswick picks up premium pig farmer Packington Pork
Cranswick added that its export sales have continued to be “exceptionally strong” as the spread of African Swine Flu to pigs in Asia had created more opportunities in Far Eastern markets.
As a result, the firm said its adjusted pre-tax profit for the year ending 31 March 2020 was now expected to be “higher than current market forecasts”.
Meanwhile, the company said the commissioning of its £75mln poultry processing facility in Eye, Suffolk is continuing to plan and is now in its ‘ramp up’ phase, while it has also accelerated investment in its pig farming operation with the acquisition of Packington Pork Limited.
Looking ahead, the company said it will continue to focus on its “long-standing customer relationships, breadth and quality of products, robust financial position and industry leading asset infrastructure” to help drive its development over the longer term.
Firm is a “class act”, says house broker
Analysts at Cranwick’s house broker Shore Capital said the profit upgrade was “very welcome” and they viewed the stock as “a core component of any mid-cap UK equity portfolio”.
“Cranswick is a class act with excellent management, a clear strategy, balanced growth, very well-invested manufacturing facilities and a long-term approach to its supply chain and vertical integration”, the broker added.
Elsewhere, analysts at Peel Hunt upped their target price for the company to 3,100p from 3,000p and maintained their ‘hold’ rating, saying there could be room for more upside if pig prices in China remained “at elevated levels” going forward.
Cranswick shares jumped 7.4% to 3,648p in early deals on Friday.