Cranswick Share Discussion Threads

[m.t.glass] 06/1/2005 19:32

Very select. Hope you kicked off yer muddy boots and put on the white cap & coat when you came in. CRM great, but I can't get my head to accept is a food stock. I still think of it as a sort of agricultural conglomerate (rightly or wrongly). Certainly popular with every analyst lately though. One of those that I keep telling myself I should have bought and it's now too late. Except it then goes on to prove it wouldn't have been too late. But by then it feels like it is again ;o/

The whole food sector feels like it's full of companies advancing in leaps and bounds, and in which there are bound to be takeovers.

[cat] 06/1/2005 19:23

dont forget CRM
Gosh - its posh in 'ere in't it?
:-)

[m.t.glass] 06/1/2005 17:36

Now regained the heights it was at before the 2003 decline, thanks to a recovery gain of 59% in 2004. Looks like it's on a mission now, having sprinted from £4 to £5 in one month before Xmas. (It put on 102% in 2001, so it knows how.)

Other food stocks, ITf and RFD both doing well too.

[cat] 06/1/2005 17:19

Wave I took 15 months.
Wave III tends to be the most powerful wave.
6 months my guess.
A break of £5.50 and its fill yer tuck box time.

[m.t.glass] 06/1/2005 17:01

Over three years on, revamped the charts etc..
(I know it's a secret thread that only a few know about - but that's no excuse to neglect the decor)

[cat] 06/1/2005 16:42

CWK - e.w. guesstimate:

Impulsive Wave I of higher degree took off March 2001 £1.54
Ended at £5.40 June 2002 - length = 3.86

Wave II ABC higher degree ran June 2002 - November 2004.

Impulsive Wave III higher degree then kicked off Nov 15th from £3.84 level.

Not sure about the subdivisions here but for the medium term its irrelevant if you want to hold.

Estimated medium term run of this Wave III is 3.86 x 1.6182 = 6.25.

So target for this next 9 months or so should be 3.84 + 6.25 = £10.09

[m.t.glass] 18/12/2004 11:27

Cranswick buy adds to clout
By Harry Wallop (Filed: 18/12/2004)

The Telegraph


Cranswick, the sausage maker based in Yorkshire, has spent £80.6m buying a sliced ham processor – a deal that beefs up Cranswick's ability to negotiate with its supermarket customers.

Martin Davey, Cranswick's executive chairman, insisted he was not biting off more that he could chew with the purchase of Perkins Chilled Foods – an acquisition more than four times bigger than any previous made by the company. "It's a fabulous deal for Cranswick. It's great for the management and for the employees to see the company have greater critical mass," he said.

Cranswick is taking on Perkins' three factories in Yorkshire and north Wales, which generated a turnover of £115m last year by slicing and packing supermarket-branded packs of ham. It also supplies supermarkets with cooked chickens for their deli counter rotisseries. Cranswick's turnover last year was £270m.

Analysts said the deal made strategic sense for Cranswick, which has transformed itself from a pig-feed manufacturer when it was founded in the early 1970s into a major supermarket supplier of gourmet meat products. The company makes Sainsbury's Taste the Difference sausages, for instance.

The deal takes Cranswick from having a 2pc share of the cooked meats market to 12pc. Parts of this market, especially pre-packed ham is growing at up to 8pc a year, according to Mr Davey.

However, many observers – including the majority owners of Perkins – commented that Cranswick was paying a full price for the business. ABN Amro Capital took Perkins Foods private in 2001, paying £185m and delisting it from the Stock Exchange. ABN has a 36pc stake and its director Dominic Collier aid: "We're very pleased with what we got for it.''

[m.t.glass] 17/12/2004 13:53

From Investec (via Cat) earlier:

Cranswick consolidates in pork
! Cranswick today announces the proposed acquisition of Perkins Chilled
Foods, a leading cooked meats and poultry processor. The price tag is
£80.6m which is around 0.7x turnover and 6.4x EBITDA on December 2003
figures. The company reported turnover of £114.9m and operating profits of
£10.2 in this financial period. The acquisition is dependent on shareholder
approval, with the EGM to take place on January 6.
! The group will be funding the bulk of the consideration from new banking
facilities (it has £90m available plus up to £30m of revolving credit). However
it is also undertaking a placing today of 2.05m shares (5% of the equity) at
457p which will raise £9.4m. The group had a very strong balance sheet prior
to this deal, with interest cover of 25x at the interim results to Sept 2004.
! Perkins Chilled Foods processes both red and white meat products from
three facilities, all of which will be integrated into the group. The acquisition
increases the scale of Cranswick’s cooked meat operation lifting sales from
£33m to around £150m. This would indicate a market share of around 10%
as opposed to 2%.
! The new business operates in the deli category (like Cranswick) but also
importantly the pre-sliced and pre-packed market, servicing leading retailers.
This category has been showing strong growth whilst the deli sector has been
broadly flat in recent years. The group will have a wider range of products
with this purchase as well as exposure to a growth sector.
! Cranswick has known the Perkins business for some years, having provided it
with fresh pork in the past. Cranswick’s integrated fresh pork business should
bring buying benefits to Perkins in the future. The management will be
remaining.
! The customer base is consolidated, but that is a feature of the UK food retail
market. Cranswick has spoken to all the main customers and they are
supportive of this consolidating move.
! This is the biggest acquisition in Cranswick’s history by some margin, but the
group has an excellent track record in this respect. We believe the risks of
integration are low. This business has been known to the group for some
time. It is geographically close and there will be no major rationalisation
resulting. All the customers are supportive.
! The acquisition will be immediately earnings enhancing but we are prevented
from publishing forecasts or recommendations until the deal is approved.

[jack green] 29/11/2004 02:05

Good post actonman. Think you make a good point about nature of grain harvest; and CWK's considerable recent investment in expansion.

Got my mits on a decent research report on Cranswich from Brewin Dolphin - 12 pages long (18 Nov), gave a really good overview imo. It identified three acquisitive european pig processing companies (Danish Crown, Bestmeat, Smithfield Foods (US)). It does not say CWK is a target - but suggests that even if they are not these guys may help consolidate the sector, increasing suppliers' powers versus the big retailers.

Brewin forecast eps of 37.8p in 2005 and 42 in 2006, which they say are not aggressive. I agree, and expect CWK to do much better than that. Here's hoping anyway!!

Happy to circulate (by email) the broker note, if anybody wants a read.

[actonman] 24/11/2004 14:20

Steve
Bear in mind that the results do not reflect the benefit to come from the post-harvest fall in the price the CWK provender mills pay for grain (basically dreadful late summer/harvest weather meant much wheat was not good enough for flour milling & much barley not good enough for malting so it all goes for animal feed - very reverse of last year)AS CWK is very vertically integrated,ie grain into CWK mills into pigfeed into CWK pigs into pigmeat into CWK meat plants into CWK pork, bacon, sausages etc a lot of the saving should flow through to bottom line, although the retailers will probably manage to squeeze prices down a bit.

Beyond that CWK is undoubtedly cash generative, and having been just been through a period of significant capital expenditure could probably ease off on that for a time, which could make it attractive to any deal requiring private equity backing.Could be attractive to others in the sector, not neccessarily listed.I have in the back of my mind that in 2003 they changed their advisers to Rothschilds.

[spower1461] 24/11/2004 11:15

These have jumped very dramatically of late.

The results were good but surely not that good to justify such a re-rating?

On nothing more than a hunch someone may be building a position.

Any one else any thoughts.

Steve

[actonman] 23/11/2004 10:14

Nothing wrong with taking a profit. Although havn't these moved up nicely since I gave them that first 'buy' rating on 15th Nov? wonder whether its only the improving prospects or whether something else might be afoot.

[danny murphy] 18/11/2004 11:47

420p. guess I got out too soon. Still, I still got 1,500 shares which have a holding cost of only £135. If I had waited another 48 hours I would have made another £1,700. Such is life.

[jack green] 17/11/2004 21:59

Surprised you sold Danny. You've been the most enthusiastic poster here for a while - and now the business is again confirming better days are coming - you're reducing.!? Good luck anyway.
I agree with WCB, results were as forshadowed. Outlook still looks good, IMHO. The problems (Sandwiches, and grain prices) are behind us and should not affect H2 and following periods, food sales continued at a double-digit growth rate in 1H, factory expansions are going to plan and will really start to kick in next year, closed one mill down (presumably some future cost savings), and mgmt were generally upbeat (e.g. the dry cured bacon, 7% div increase). Found an interesting article too on www.bakeryandsnacks.com Extract below

"But Cranswick chairman Martin Davey said the worst was now over and that he expected a better performance in the second half of 2004. He said the company had regained the lost volumes in the sandwich business and that animal feed prices had dropped back down to normal levels following this year's harvest.

"Davey was bullish about Cranswick's expansion prospects and said that "the strong cash generation of the business [turnover rose by eight per cent to £144 million] has enabled significant investment to be made in production facilities which will provide additional capacity to combat the challenges of the trading environment."

"Bernard Hoggarth, chief executive of Cranswick's food division, said the company was already preparing to expand its sandwich production, which is currently running at full capacity, and that a range of new products was being planned.

"Hoggarth told BakeryandSnacks.com that Cranswick had exclusivity rights on some specialist manufacturing and meat processing equipment coming into the UK from central Europe next year.

"The company believes central European-style premium meats, such as speciality sausages, both loose and in sandwiches, have potential in the UK and could provide an important niche market for Cranswick.

"You have got to be at the cutting edge and you have got to be innovative to maintain your position and progress in this market. We are not a high volume, mainstream company," said Hoggarth, adding that Cranswick's focus was on the premium end of the meat and sandwich market.

"Hoggarth expects the UK sandwich market to continue growing by 5 per cent per year for the next few years and Davey said the company had no plans to expand outside the UK at this stage.

"There appears to be a fairly healthy market to work in. The British Sandwich Association (BSA) estimates the UK sandwich market to be worth £3.3 billion, and it says there is plenty of room for growth in the commercial sector with 80 per cent of sandwiches still made at home.

"More and more people are buying packaged sandwiches to give to their families in lunch boxes," says the BSA, which claims that UK sandwich sales are rising by 8 per cent every year. "

[danny murphy] 16/11/2004 08:38

Sold 6,500 at 388.87p for a reasonable profit. Still hold 1,500. I wonder if I sold too soon? Time will tell!!

[westcountryboy] 16/11/2004 07:50

Danny - the results are surely exactly as forecast in the September statement?

[danny murphy] 16/11/2004 07:45

The results don't look impressive to me. I think that I'll sell a fair chunk today.

[actonman] 16/11/2004 01:49

Danny, you must be starting to worry that there's no-one else out there. So, I've given these pigs a 'buy' rating. Hope it helps thems off the ground!

[danny murphy] 15/11/2004 18:05

385p. I am not even sure if the pigs have reached the runway yet, but if they have please make sure that they don't crash on take off tomorrow. It all happens or doesn't tomorrow. Let's hope it happens tomorrow!!!

[danny murphy] 12/11/2004 16:40

383.5p. Only 1 trading day to go before the interims. Are the pigs going to let me down??? Surely not!!! Come on you pigs.

[danny murphy] 11/11/2004 16:48

383.5p. Only 5 days to go. Are the pigs stirring???

[danny murphy] 09/11/2004 07:13

381.5p Only 1 week to interims and still no movement. Come on you pigs, start flying now!!!

[iroll] 04/11/2004 22:58

CWK's cooked meat factory at Sutton Fields has been closed today and 100 workers told not to report for work due to two positive tests for salmonella. Remedial work is taking place and it is hoped to restart production next week. Other local plants are unaffected.............. from Hull Daily Mail.

Hopefully no permanent damage has been done to reputation.

[danny murphy] 04/11/2004 20:47

382.5p. Come on you pigs!!! When are you going to start flying??

[danny murphy] 02/11/2004 07:16

382.5p Only 2 weeks to go until the interims!!!