Cranswick Share News (CWK)

Sausage-maker and bacon curer Cranswick reported a strong showing in its seasonally weak final quarter as UK and European pork prices begin to show signs of stabilisation.Cranswick lifted fourth quarter underlying sales 1% on the same period last year, with total sales 4% higher thanks to the recent £17.9m acquisition of cooked-chicken-focused Benson Park.Revenues benefited from a 4% rise in volumes as price deflation was passed on to consumers, up from the 2$ growth in the third quarter.Full year underlying sales are expected to be flat and total sales up 1%, as City analysts expected.The FTSE 250 company's traditional strong cash generation in the quarter resulted in year-end net debt being "substantially lower" than at the end of the third quarter and similar to the £17m level a year ago, despite the capital investment programme and the Benson Park acquisition.House broker Shore Capital said it believed Cranswick's robust performance continued to be broad-based, with fresh pork particularly strong with double digit volume growth underpinned by a business win with a "leading retailer".Continental products are believed to have seen growth in the high single digits, according to analyst Darren Shirley, with sausage and bacon both seeing a "good" period, though cooked meats "was more subdued after a relatively slow start in the early weeks of 2015"."Pastry continues to grow very strongly, albeit from a still small base, and with early operational teething problems now worked through, we expect the site to have made a consistently positive contribution through H2 2015."With pork deflation in the quarter at roughly 3%, down from the 5% in the third, ShoreCap's Shirley stated that Cranswick management believe there is likely to be upward pressure on EU prices rather than further downward pressure in the UK.Investec noted that, as the price deflation is simply a pass-through of lower raw material costs, there should be no detrimental impact on margins and for the full year, it expects a small margin advance.