Interim Results
Cranswick PLC
16 November 2000
CRANSWICK'S RECORD INTERIMS:
PROFITS UP 63 PER CENT
Food manufacturer Cranswick plc announces its unaudited interim results for the
six months ended September 30 2000.
Highlights
- Pre-tax profit increased by 63 per cent to £4.85m (1999: £2.97m)
- Sales rise 26 per cent to £89.8m (1999: £71.2m)
- Earnings per share up 29 per cent at 18.0p (1999: 14.0p)
- Dividend increase of 12.5 per cent to 4.5p per share (1999: 4.0p per share)
- Challenges of competitive market met
Cranswick Chief Executive, Martin Davey, said: 'The six months to September 30
2000 has been another successful period for Cranswick. An increase in profit of
63 per cent and a 29 per cent boost in earnings per share is particularly
pleasing and continues our record of growth.
'Each year the markets in which the Company operates throw out new challenges.
This will undoubtedly continue. The challenges of a difficult agribusiness
environment and a competitive retail market have not held back the progress of
the Company. We look forward to continuing Cranswick's record of growth'
For further information:
Martin Davey, Chief Executive
John Lindop, Finance Director
Cranswick plc 07775 576426
Paul Quade (Mobile 07947 186694)
CityRoad Communications 020 7334 0243
STATEMENT TO SHAREHOLDERS
Results
The six months to September 2000 has been another successful period for your
Company. An increase in profit of 63 per cent and a 29 per cent boost in
earnings per share is particularly pleasing and continues Cranswick's record of
growth. Prior to goodwill amortisation, profit before taxation was £4.85m
compared to £2.97m previously and earnings per share rose to 18.0p from 14.0p
last year. Earnings per share take into account the additional shares in issue
following the Placing and Open Offer in October 1999.
Review of Activities
The food business, which manufactures a range of fresh pork products, premium
hams and gourmet sausages, increased turnover by 26 per cent to £57.1m from
£45.2m last year. This includes sales by Cranswick Country Foods (Sutton Fields)
acquired in October 1999. The growth was mainly in sales of value added
products. Focus on product development continues to bring recognition as
illustrated by Lazenby's success at the Guild of Fine Food Retailers 'Great
Taste Awards 2000' with its pork and smoked duck sausage and pork, duck, prune
and armagnac sausage. As part of our strategy for the continuing development of
the food business we acquired one-half of the minority interest in Cranswick
Gourmet Sausage Co. during June to take our shareholding from 67 to 83 per cent.
Investment projects completed during the first half, to provide facilities to
continue the record of growth, included investment in new ovens at Sutton Fields
for cooked meats and an extension to the refrigeration capacity at the Hull
fresh pork plant.
Cranswick Mill, the Company's agribusiness activity, operated in a testing
market given the year on year reduction in UK pig numbers of over 12 per cent.
Despite this, like for like sales of pig feed rose by approximately 10 per cent,
after adjusting for the impact of the Wellingore Mill acquired in March 2000. A
particularly good performance although margins were lower than previously,
reflecting the trading environment. Equally encouraging was the increase in
sales in pig marketing to UK meat processors during the period. Overall,
agribusiness sales increased by 39 per cent to £23.7m compared with £17.1m last
year.
In the pet business, sales rose marginally to £9.0m from £8.9m previously. At
Buckton's, the bird and small animal food activity, reduced availability of
peanuts for feeding to garden birds and consolidation in the retail and
wholesale sectors impacted on sales. The sales impact was partially offset by
continued growth in higher added value pre-packed pet food which, along with
improvements elsewhere in the business, gave rise to a good first half
performance. Equally pleasing was the first half trading at Tropical Marine
Centre where sales rose by 13 per cent, reflecting growth in both fish and dry
goods. TMC's success in focusing on the aquaculture sector was evidenced by the
award of a contract to supply the Singapore government with aquaculture
equipment for a project aimed at boosting the supply of fish for consumption in
its home market.
Outlined above are some of the factors contributing to another set of record
results from Cranswick but more than anything these results would not be
achievable without the enthusiasm, teamwork and commitment of all our people at
Cranswick.
Cashflow
Net borrowings fell by £2.4m in the period compared with an increase of £5.4m
last year. Operating profit before goodwill amortisation generated £5.2m and
capital expenditure was only £0.4m ahead of the depreciation charge. Interest,
dividend and taxation payments amounted to £3.2m compared to £1.7m last year
largely reflecting increased tax payments, whilst there was a £1.5m reduction in
working capital over the period compared with a £5.9m increase the previous
year. Net borrowings at 30 September 2000 amounted to £7.5m, 20 per cent of
shareholders' funds. Interest cover was 16 times compared with 10 times
previously.
Dividend
The interim dividend is to be increased from 4.0p per share to 4.5p per share,
up 12.5 per cent. The dividend will be paid on 26 January 2001 to shareholders
on the register at the close of business on 8 December 2000. Shareholders will
again have the option to receive the dividend by way of scrip issue.
Outlook
Each year the markets in which the Company operates throw out new challenges.
This will undoubtedly continue. The challenges of a difficult agribusiness
environment and a competitive retail sector have not held back the progress of
the Company. We look forward to continuing Cranswick's record of growth.
Jim Bloom Martin Davey
Chairman Chief Executive
UNAUDITED PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2000
Year to
Half year 31 March
2000 1999 2000
£'000 £'000 £'000
Turnover 89,800 71,226 157,348
--------- --------- -------
Operating profit 4,744 3,234 9,631
-------- -------- -------
Operating profit before goodwill 5,168 3,293 10,092
amortisation
Interest charge 321 321 770
-------- -------- -------
Profit before taxation & goodwill 4,847 2,972 9,322
amortisation
Goodwill amortisation 424 59 461
-------- -------- -------
Profit before taxation 4,423 2,913 8,861
Taxation 1,406 843 2,699
-------- -------- -------
Profit after taxation 3,017 2,070 6,162
Equity minority interest 45 79 140
-------- -------- -------
Profit attributable to shareholders 2,972 1,991 6,022
Equity dividends 850 753 2,829
-------- ------- -------
Retained profit 2,122 1,238 3,193
-------- ------- -------
Earnings per share : adjusted 18.0p 14.0p 39.0p
-------- ------- -------
: basic 15.8p 13.6p 36.2p
-------- ------- -------
: diluted 15.2p 13.3p 35.9p
-------- ------- -------
Dividends per share 4.5p 4.0p 15.0p
Notes:
1. Basic earnings per share is based on the profit attributable
to shareholders and the average number of ordinary shares in
issue of 18,862,939 (1999 - 14,655,895). The calculation of
diluted earnings per share is based on 19,557,932 (1999 -
15,009,749) ordinary shares. Adjusted earnings per share is
stated before goodwill amortisation of £424,000 (1999 - £59,000)
based on 18,862,939 (1999 - 14,655,895) ordinary shares.
2. The taxation charge for the six months to 30 September 2000
reflects the estimated rate for the full year.
3. The accounting policies used in the preparation of the
financial statements for the six months to 30 September 2000 are
the same as those used for the statutory accounts for the year
ended 31 March 2000.
4. The statutory accounts for the year ended 31 March 2000
received an unqualified audit report and have been filed with the
Registrar of Companies. Comparative figures for the year to 31
March 2000 have been extracted from these accounts.
5. The Company intends to post the Interim Report to
shareholders on 16 November 2000. Further copies will be
available upon request from the Company Secretary, Cranswick plc,
Cranswick, Driffield,East Yorkshire, YO25 9PF.
UNAUDITED BALANCE SHEET
as at 30 September 2000
Year to
Half year 31 March
2000 1999 2000
£'000 £'000 £'000
Fixed assets
Intangible fixed assets 16,374 2,721 16,312
Tangible fixed assets 25,086 19,544 24,815
--------- --------- -------
41,460 22,265 41,127
--------- --------- -------
Current assets
Stocks 5,882 8,216 6,189
Debtors 19,613 18,950 20,069
Cash at bank and in hand 2,023 1,175 1,005
-------- --------- -------
27,518 28,341 27,263
--------- --------- -------
Creditors - amounts falling due within
one year
Loan notes payable 1,624 1,924 1,624
Bank loans 937 1,094 1,406
Bank overdraft 1,340 8,413 2,384
Hire purchase 132 170 97
Creditors 16,669 12,810 16,076
Corporation tax 3,041 3,190 2,495
Proposed equity dividends 850 753 2,075
--------- -------- -------
24,593 28,354 26,157
-------- -------- -------
Net current assets / (liabilities) 2,925 (13) 1,106
Bank loans due after more than one (5,157) (1,250) (5,313)
year
Hire purchase due after more than one (296) (52) (26)
year
Deferred taxation (1,002) (712) (1,002)
Government grants (241) (198) (296)
---------- --------- -------
Total assets less liabilities 37,689 20,040 35,596
---------- --------- -------
Capital and reserves
Share capital 1,889 1,469 1,887
Reserves 35,580 18,312 33,389
Equity minority interest 220 259 320
--------- ---------- -------
37,689 20,040 35,596
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 September 2000
Year to
Half Year 31
March
2000 1999 2000
Operating activities £'000 £'000 £'000
Net cash inflow / (outflow) from 8,024 (1,569) 12,293
operating activities
Returns on investment and servicing of
finance
Hire purchase interest paid (17) (30) (54)
Bank interest paid (344) (273) (664)
------ ------- ------
(361) (303) (718)
------- ------ -------
Taxation (paid) / received (860) 9 (3,421)
---------- ------- -------
Capital expenditure and financial
investment
Purchase of tangible fixed assets (1,859) (1,782) (5,710)
Government grants received - - 40
Proceeds of sale of tangible fixed 76 58 355
assets
---------- --------- -------
(1,783) (1,724) (5,315)
--------- ---------- -------
Acquisitions and disposals
Part purchase of minority interest (631) (573) (573)
Purchase of subsidiary undertaking - - (2,194)
Net cash acquired with subsidiary - - (1,708)
undertaking
---------- ---------- -------
(631) (573) (4,475)
---------- ---------- -------
Equity dividends paid (2,007) (1,380) (2,087)
Cash inflow /(outflow) before 2,382 (5,540) (3,723)
financing
Financing
Issue of ordinary share capital - 161 234
New hire purchase 378 - -
New medium term loan - - 5,000
Medium term loan repayments (625) (625) (1,250)
Loan note repayments - (307) (607)
Capital element of hire purchase (73) (101) (200)
payments
---------- ---------- -------
Net cash outflow from financing (320) (872) 3,177
Increase /(decrease) in cash in the 2,062 (6,412) (546)
period
Reconciliation of operating profit to
net cash inflow /(outflow) from
operating activities.
Operating profit 4,744 3,234 9,631
Goodwill amortisation 424 59 461
Depreciation (net of government 1,330 1,030 2,331
grants)
(Profit)/loss on sale of tangible - (8) 68
fixed assets
Decrease / (increase) in stocks 307 (1,653) 733
Decrease / (increase) in debtors 456 (4,216) (2,566)
Increase / (decrease) in creditors 763 (15) 1,635
---------- ---------- -------
Net cash inflow / (outflow) from 8,024 (1,569) 12,293
operating activities
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