Cranswick PLC (LON:CWK) has raised its outlook for the year after enjoying strong sales in the past quarter, albeit during which safety measures at its meat factories were criticised after three workers died from coronavirus (COVID-19).
The FTSE 250-listed meat processor said all its sites remained fully operational with “enhanced safety measures swiftly introduced in March”, which enabled it to meet increased levels of demand from the retail sector as the country went into lockdown.
However, after remaining fully operational, nine workers out of Cranswick’s 1,200-strong workforce at its Wombwell factory in Barnsley, South Yorkshire tested positive for COVID-19 and three subsequently died.
Cash generation was said to be “strong” in the quarter and led to a reduction in net debt, having been £146.9mln at the end of March, while site-based workers are being given a £500 bonus “to recognise their essential key worker status and valued contribution throughout the pandemic”.
Revenue in the 13 weeks to June 27, 2020, the group's first quarter, was up 24.8% year on year. The company said the level of demand from supermarkets and increased poultry sales thanks to the opening of its new facility in Eye, Suffolk, more than compensated for lower sales from the hospitality sector.
This trend has continued since the end of June, Cranswick added.
While retail volumes are expected to begin to normalise in coming months as consumers return to eating out of home, and Cranswick's management is cautious about the longer-term economic impact of the pandemic and Brexit, they said the outlook for the financial year to March 27 “is now expected to be ahead of its previous expectations”.