Cranswick’s (LSE: CWK) recent win of the sustainability award at the Food Manufacture Excellence Awards may not have gathered the same attention as the Rock/Smith Oscar punch up. But it’s newsworthy all the same.
The headlines may remain reserved for the red-carpet shenanigans, but the dividend stock has been quietly continuing its ‘Second Nature’ programme of works across various sustainability measures.
Designed to ensure its business helps lead positive change in the food production industry, it’s a great example of seeing company strategy being delivered.
And hitting one of its key milestones of all 14 eligible manufacturing sites being certified carbon-neutral certainly helped pull off its own big win on the sustainability front.
But what’s its performance like financially? Well, it appears that the quiet but intentional delivery model seems typical of the Cranswick approach.
Its last interim results show us that the £220m invested in its poultry operations over the last eight years is now paying handsome dividends.
As a direct result, Eye’s production capacity — one of its main processing plants — increased from an average of 1.1m birds per week to 1.3m – up over 18%.
Combined with other improvements, overall poultry revenue increased by 35.5%.
With 19% of the group revenues coming from this division, that’s good news for the future. Especially as further capacity enhancements are expected in the second half of the year.
It’s not all plain sailing, though, as its Fresh Pork division continued to be hampered by a licensing issue to resume exporting to the Far East, notably China.
Combined with the shortage of butchery skills, this left that departments’ revenues down 5.3% compared to like-for-like in the previous period.
But for me, one of the most telling things about a company’s prospects is how it is preparing for the future.
Is it ignoring headwinds? Changing trends? Or facing up to the facts and adapting accordingly?
As such, it was reassuring to see news about the two most recent acquisitions by Cranswick, with both being non-meat-based.
Ramona’s Kitchen, with its plant-based Mediterranean foods, and Atlantica UK’s brand Spanish Tortillas should both fit nicely with the continued expansion of its Continental Products business whilst providing diversification across its earnings.
At the end of the day, though, from an investment perspective, it’s all about total financial delivery. And those numbers looked good, with overall revenues increasing by 6.6% despite the tough trading period.
And whilst the dividend yield rate of ~2% may not be headline-grabbing, the substantial increase from 60.4p to 70p (+14.9%) from ’20 to ’21 is certainly worth noting.
Combine that with its 31-year track record of unbroken dividend increases, and it seems Cranswick continues to deliver quietly but effectively.
As such, with this solid financial base and an executable future strategy, I’m considering this, perhaps less Oscar glamourous but equally award-winning, FTSE 350 firm for a place in my defensive-focused portfolio allocation.
