 CWK Cranswick
Questor......BUY
Cranswick shares look cheap: Cranswick, Britain’s largest sausage maker, said that it had enjoyed a strong finish to the year on rising sales of fresh pork — the sort of encouraging performance that underpins why we think the shares make a good addition to any portfolio. The FTSE 250-listed company boasts a solid balance sheet, excellent cash generation and it likes to return that cash to shareholders through regular dividend payments. Sales of pork products during the three months to the end of March were 4% higher than the same period a year earlier, and up from 2% growth in the third quarter. That second half sales performance meant full year sales were up 1%, a steady improvement on the sluggish first-half. Cranswick has also been taking greater control of its cost base and supply chain by expanding its pig breeding and growing facilities. The company now supplies more than 20% of its weekly meat demand of some 50,000 pigs from its own farms in the U.K. The acquisition of the pig farming business and investment into new production facilities saw debt levels increase at Cranswick and the company should finish with net debt at around £17 million. However, with strong cash generation the debt levels are forecast to reverse to net cash of almost £5 million within 12 months’ time. The shares have had a quiet year so far, up just 2.4%, which is well behind the wider FTSE 250 that has risen 9.8% so far. The shares are trading on a forecast price-earnings ratio of 14.6 times, falling to 13.8. This looks fair given the track record, cash generation and strong balance sheet. Cranswick at £14.13+13p Questor Says “Buy”. |
09 Apr 15 Investec Buy tp 1615p
Reiterates
Questor share tip: Cranswick shares look cheap
Falling pork prices, accelerating sales and a solid balance sheet make the UKs largest sausage maker a buy, says Questor |
Cranswick - a patient trading case study... |
JeffCranbounre 29 Jan'15 - 20:23 - (Filtered) |
Cranswick's #CWK third-quarter trading statement revealed an improvement on last year's sales.
ADVFN Podcast> |
I predict a significant fall here. Not only is the CWK price frothy, rising on minimal volumes but the following factors will be having an effect behind the scenes.
Food sales going down:
People are buying less and buying cheaper.
Cranswick's biggest contracts (apparently 60% of their business according to recent press) is with three supermarkets Sainsbury, Tesco, & Morrisons and these three are locked into a price war amongst themselves and more particularly Aldi and Lidl who are taking market share continuously. The supermarkets will be pressuring Cranswick's pricing.
Also, Aldi and Lidl are flexible businesses and will be exploiting the opportunity to buy cheap pork, ham, sausages etc due to the fall in open-market pig prices coming from the Russian ban on Euro imports and the flood onto the European market of unsold pork etc.
Have taken a short position today. |
Well the price is holding up so I reckon the market agrees with you Mike. |
As I understand it, CWK have some pig production 'in house' - this was done to help overcome ever increasing pig prices and to obtain control of the production chain. In terms of 'bought in' pig supply, surely this will help reduce costs and be a positive? Having said that, the supermarkets will be wise to this and will likely use it as a lever to squeeze CWK where they can (thereby reducing any cost benefits). I would therefore see cheaper lean hog futures as positive or neutral at worst. |
Lean hog futures getting cheaper but CWK going higher. Cheaper pigs has to mean smaller profits surely, unless the supermarkets miss this news and fail to negotiate lower prices. Doesn't seem likely to me that they'll miss out on the opportunity to push prices down but maybe supermarket buyers aren't the hard-nosed negotiators they're always being made out to be. |
And it's high time there was a correction here - ham seems to be as expensive as steak nowadays. That's like gold being valued at the same rate as silver. I have a feeling that CWK has taken prices as far as they can for now and oversupply will finally burst this particular bubble. |
Get ready for a downswing here. I reckon all that European meat the Russians have stopped buying will shortly be coming to the UK and driving down prices. Tesco will take every opportunity to negotiate prices down in a weakening market because of its desperate need to compete more effectively with Aldi/Lidl. Cranswick looks to me like an inevitable loser from these market dynamics. Am I wrong? |
nice move so far today |
Boring old trade |
Cranswick used to farm pigs years ago and got out because they recognised that pig farming had poor margins and only the farmer was able to give the hours needed to make it work. they have now bought back into pig farming and will be relying on managers to make it work. how many months before they realise that they have made a pigs ear of a decision. They would have been much better to have treated pig farmers fairer and built genuine partnerships with the professionals. this is going to be an expensive mistake. how long before they do a tesco and throw the towel in? Pig farming is going to be an albatross but it will allow pig farmers to have a much needed laugh. I wonder what col L thinks? Perhaps they will open a feed mill next so that they can be truly vertically integrated, how the wheel turns. |
Cranswick caught selling British pork to Tesco which appears to be not British. How many other supermarkets might have been misled by Cranswick? This story could destroy Cranswick's credibility. Destroyed confidence can not be repaired easily |
 ASDA has launched a new PorkLink sourcing policy after the previous scheme ended with the demise of Vion in the UK.
Cranswick Country Foods will take over as the new processor for the supermarket's PorkLink farmers.
The move by Asda follows Sainsbury's recent announcement all its fresh pork will be sourced from British farmers as part of its commitment to double the amount of British food it sells by 2020.
Asda said its new policy will give PorkLink farmers security and therefore the ability to develop their businesses.
Pearce Hughes, Asda's agricultural development manager, said he hoped working with Cranswick would allow PorkLink farmers to maximise herd productivity and margins.
Jim Viggars, head of Asda's red meat team, said: "We want to ensure a sustainable future for every pig farmer supplying us.
"We need a secure supply of British pigmeat and that needs British pig farmers to be there in future.
"Ultimately, we would love to sell more British pigmeat, but we can not do that without pig farmers.
"Crucially we need to work with pig farmers to supply what the consumer wants and we have to ensure our pork offering is consistent and delivers great value for our customers."
Growing demand
The Sainsbury's policy will see it source 70 per cent more pigs to meet consumer demand. Cranswick and Dunbia will be the processors handling this supply.
The company claimed the move would reduce reliance on EU pork and give pig farmers the 'confidence to invest in their future'.
Sue Lockhart, head of agriculture at Sainsbury's said: "Sourcing food closer to home and developing even stronger links with farmers is a key part of continuing to lead on fresh food."
She added this summer customers would see more British food than ever before.
Meryl Ward, a member of the pork development group, said: "This is amazing news, especially as it comes at a time when pig farmers have had such a challenging year. The commitment will give farmers confidence to invest in their business as they have a guaranteed order with a major retailer." |
Hi,
There is an opportunity to meet the management of this company next week, as they are appearing at Equity Development's latest "Investor Forum".
Date: 26 June 2013
Location: Fasken Martineau, 17 Hanover Square, London. W1S 1HU.
Time: 5pm for a 5:30pm start.
There are 3 companies, each doing a 30 min presentation: PureCircle (PURE), Vislink (VLK), Cranswick (CWK).
Drinks & canapes afterwards are provided.
It's a good venue, very central, and they are interesting events, good for meeting companies & chatting to other investors afterwards.
I'll be attending, so hope to see some of you there.
To register for the event, follow this link:
Cheers, Paul. |
Remaining strong on a poor day in general market. |
h1 looking good . |
looking for £12.50 this year. |
I think the thought of the Chinese tucking into a good old pork pie bodes well for world peace ! Now all we have to do is to convince them of the delights of a bottle of Bass and English mustard to go with it !!! |
Thanks chrisis : I particularly like the bit about exports ! |
I'm a holder of CRAW, but Cranswick also mentioned in this article: |
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