- Medium-term targets upgraded
- Adjusted operating margin target 7%
- High-teens return on capital
Premium food producer Cranswick (CWK) served up a tasty upgrade to its medium-term targets ahead of a capital markets day with analysts and institutional investors, sending the shares up 2.5% to £50.12.
The shares hover just below all time highs around £52 and are up 21% over the last 12-months, comfortably ahead of the FTSE 250 midcap index return of 3%.
WHAT DID THE COMPANY SAY?
Chief executive Adam Couch commented: ‘2025 marks Cranswick's 50th anniversary and today's Capital Markets Day event is a fantastic opportunity to reflect on our successful business model and strategy which have delivered strong, compound returns for our shareholders and compelling future growth opportunities.
‘We are also announcing today more ambitious medium-term financial targets, reflecting the significant strategic progress we have made since first introducing these measures.
‘Our relentless focus on the strengths of the business, which include industry leading investment, a clearly defined strategy, broadening product portfolio and unrivalled management team, will continue to support the future successful development of Cranswick over the long term.’
PROFITABILITY AND RETURNS UPGRADE
The company has increased its medium-term adjusted operating profit margin target on sales to circa 7.5% from 6% and raised its ROCE (return on capital employed) target to upper-teens from mid-teens.
ROCE is defined as adjusted operating profit divided by the sum of average opening and closing net assets, net debt, pension surplus and deferred tax. It is a measure of how effectively the business deploys all its capital it employs to generate income.
A high double-digit return often means a company has a moat or effective protection against competitors.
Cranswick highlights the actions taken to secure pig supply gives it a competitive advantage while leveraging its genetics capability. The company also references its differentiated product portfolio and further premiumisation.
MAINTAINED FULL YEAR
Cranswick said ‘robust’ demand for its core pork and poultry products has continued through the fourth quarter to the end of March 2025. The company added that its is comfortable with consensus market expectations for the year to March 2026.
Company-complied forecasts for adjusted pre-tax profit range between £190 million and £195.1 million, representing 9% year-on-year growth at the midpoint of the range.
Consensus earnings per share forecasts have been revised up by around 6% over the last year according to Refinitv and Stockopedia data.
