Cranswick H2 Earnings Call Highlights

Key Points

• Cranswick delivered solid fiscal 2026 growth, with revenue up 9.5% to £2.98 billion and adjusted operating profit rising 14.5% to £237 million. Margins improved to 7.9%, and adjusted EPS increased 10.4% as strong volume growth and festive trading boosted results.
• The company continued its long dividend streak, proposing a full-year dividend of £1.125 per share, up 11.4%, which marks 36 straight years of annual dividend growth. Free cash flow also rose 25.7% to £268.4 million, while net debt remained low relative to EBITDA.
• Cranswick is investing heavily to expand capacity and support future growth, including major projects in pork, poultry, and supply-chain assets, plus a new £56 million poultry expansion in Eye. Management said recent acquisitions are outperforming expectations and early trading in the new year is in line with forecasts.

Cranswick LON: CWK reported what management described as a strong year of strategic and financial progress for fiscal 2026, with volume-led revenue growth, higher margins and another increase in its dividend.

The U.K. food producer said revenue rose 9.5% to £2.98 billion, supported by 8.3% growth in U.K. food volumes, new business wins and a record Christmas trading period. Adjusted operating profit increased 14.5% to £237 million, while adjusted profit before tax rose 11.2% to £220 million. Adjusted earnings per share increased 10.4% to £3.017.

Mark Bottomley, chief financial officer, said the company’s adjusted operating margin improved to 7.9%, up 35 basis points year over year and “well ahead” of its medium-term target. Return on capital employed was maintained at 18.5% for the third consecutive year, despite a significant increase in average capital employed over that period.

Dividend Growth Extends to 36 Years

Cranswick proposed a final dividend of £0.855 per share, up 12.5%. Together with an interim dividend of £0.27 per share, the full-year dividend would total £1.125 per share, an 11.4% increase from the prior year.

Management said the increase extends Cranswick’s record of consecutive annual dividend growth to 36 years. Bottomley said dividend cover was 2.7 times in fiscal 2026, above the company’s target of at least 2.5 times.

Cash generation remained a central theme of the presentation. Bottomley said free cash flow increased 25.7% to £268.4 million. Net debt excluding lease liabilities rose by only £25.3 million despite record capital expenditures of £163.4 million and £32.1 million deployed on mergers and acquisitions.

Total net debt, including lease liabilities, increased to £240.8 million. Bottomley said lease liabilities rose primarily to support growth in fresh poultry as the company transitioned to lower stocking densities and added capacity. He also noted that net debt excluding lease liabilities stood at just 0.2 times EBITDA, which he said preserved “substantial financial flexibility.”

Investment Focuses on Poultry, Pork and Supply Chain

Cranswick invested a record £163 million across its asset base during the year, including £40 million in farming operations and £123 million across its operating sites.

Management highlighted several major investment projects, including:

• A £100 million multi-phase expansion of the Hull fresh pork primary processing facility, including a highly automated on-site cold store that is now fully operational.
• A £30 million expansion of two added-value poultry sites.
• A £27 million fit-out of a hummus and dips facility in Worsley.
• Further investment across farming and feed milling operations to strengthen the company’s vertically integrated supply chain.

The company also announced a new £56 million investment at its fresh poultry facility in Eye. Management said the project will increase capacity by a further 25% by summer 2027 through the addition of a second processing line and a small expansion of the site footprint.

According to management, the Eye site was originally designed for 1 million birds per week, but by the end of 2027 it is expected to have capacity of more than 2 million birds per week. The company also said it continues to search for a suitable second poultry processing location.

Commercial Growth Led by Poultry, Gourmet and Pet Products

Jim Brisby, chief commercial officer, said the U.K. retail market remains “extremely competitive,” but fresh and chilled grocery growth is running ahead of the total grocery market. He said pork has been the standout protein category, supported by its value credentials, while chicken continues to benefit from affordability and health perceptions.

Brisby said beef demand remains, but price inflation has affected accessibility for many households, with beef volumes down 8.9%. He also said meat substitutes are seeing “significant retreat,” citing consumer concerns around ultra-processed foods, taste and price.

Within Cranswick’s own categories, Bottomley said poultry revenue increased 13.9%, supported by fresh, prepared and cooked poultry. Gourmet revenue rose 15.3%, reflecting demand for premium added-value ranges and the contribution from Blakemans, which Cranswick acquired during the year. Pet Products revenue increased 29.8%, helped by expansion of the company’s relationship with Pets at Home, improved sales mix and development of the category.

Brisby said pork sales rose 3% year over year, with volumes up 5%. Convenience sales increased 7.3%, while foodservice sales grew 35%, helped by the Blakemans acquisition. Export sales declined 1%, reflecting lower prices, particularly in China, due to global pig meat supply.

Acquisitions Performing Ahead of Expectations

Management said recent acquisitions, including JSR Genetics, Blakemans and the Fridaythorpe feed mill, are performing ahead of initial expectations.

The company said JSR Genetics has strengthened its vertically integrated pig supply chain by enhancing genetic selection and improving farm productivity and product quality. Blakemans, described as a manufacturer of raw and cooked sausage, has expanded Cranswick’s presence in foodservice and helped unlock procurement synergies. Management also said Blakemans has secured its first retail listing with a frozen range for one of Cranswick’s leading retail partners.

The Fridaythorpe mill was described as a step change in feed milling operations, increasing self-sufficiency in pig feed milling and allowing Cranswick to capture more margin within its supply chain.

Outlook Remains in Line With Expectations

Cranswick said trading in the early part of the new financial year has been in line with expectations, with robust demand continuing across its product ranges.

Brisby said the company sees growth opportunities across all product areas, supported by long-term customer partnerships and innovation. He noted that the company has successfully onboarded volume from a 10-year Sainsbury’s pig meat agreement and has expanded its poultry relationship with Morrisons into a 10-year agreement covering the Eye facility and two value-added facilities in Hull.

Brisby also said Cranswick has been notified of a “significantly large” ready-to-eat chicken order with the U.K.’s largest retailer, expected to be onboarded in the autumn of the current financial year. In pet products, he said the company has been awarded sole supply of all dry pet food for Pets at Home, adding further volume to a 10-year partnership agreement.

Management said inflation and input-cost volatility remain ongoing features of the market, including movements in pig prices, feed, fuel, packaging and fertilizer. Brisby said Cranswick continues to manage these pressures through open-book pricing mechanisms with key customers.

Bottomley said the company’s business model remains “robust, cash generative and disciplined in its deployment of capital,” positioning Cranswick to continue pursuing sustainable growth and shareholder returns over the long term.

About Cranswick LON: CWK

Cranswick is a leading and innovative supplier of premium, fresh and added-value food products with revenues of more than £2.7 billion. The business employs over 15,400 people and operates from 23 well-invested, highly efficient facilities in the UK. Cranswick was formed in the early 1970s by farmers in East Yorkshire to produce animal feed and has since evolved into a business which produces a range of high-quality, predominantly fresh food, including fresh pork, poultry, convenience, gourmet products and pet food.

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