Cranswick’s revenue jumps 25% in the fiscal first quarter

In a report on Monday, Cranswick plc (LON: CWK) said that its revenue jumped 25% in the fiscal first quarter as the Coronavirus pandemic restricted people to eat at their homes. In the upcoming months, the company predicted, retail demand was expected to recover quickly and return to pre-virus levels as the government eases COVID-19 restrictions and people resume dining out.

Shares of the company opened about 4.5% up on Monday. The stock gained further in the next hour to print a year to date high of £41.10 per share. This compares to a low of £29.22 per share that it noted in March when the pandemic pushed its facilities into temporarily shutting down. Interested in investing online? Here’s how you can buy shares in 2020.  

Cranswick says its full-year results will print above expectations

The British meat processor supplies chicken and pork to the countrywide grocery retailers. For the full year that concludes in March 2021, Cranswick expressed confidence that its financial performance will print above expectations. Its capital expenditures, it added, will be lower this year on an annualised basis.

According to Cranswick, sales have sustained so far in the fiscal second quarter. Analysts at HSBC, however, anticipate the trend to shift back to dining out in the upcoming weeks. The British government recently launched a “eat out to help out” discount scheme that is also likely to fuel dining out in the rest of the year.

Cranswick also relies heavily on exports that made up 11% of its total revenue in fiscal 2019. The increased prices benefitted Cranswick as demand from the Far East, including the largest Asian economy, China, grew in recent months.

Cranswick acknowledges the impact of COVID-19 on its food-to-go segment

As per the Kingston upon Hull-based company, it imposed strict measures to minimise the fast spread of the flu-like virus in March including the use of personal protective equipment (PPE), social distancing, and enhanced hygiene standards. These are being complied to date and have contributed to keeping all of its facilities fully operational.

Cranswick acknowledged the impact of the health crisis on its food-to-go segment in the recent quarter, but stronger retail demand, it said, helped offset this decline.

Cranswick performed marginally upbeat in the stock market last year with an annual gain of more than 3%. At the time of writing, it is valued at £2.13 billion and has a price to earnings ratio of 25.56.