Squeezed Cranswick warns on profits

Pork products supplier Cranswick expects full-year results to fall short of expectations as it continues to face high input costs and a weak consumer environment.The company, which supplies sausages and bacon for the Sainsbury's 'Taste the Difference' range, says it is in discussions with customers as it seeks to mitigate the effects of higher raw material costs."The extent of and time lag in recovering these rising input costs together with other inflationary pressures, are expected to impact the company's operating margin during the first half," Cranswick said. "As a consequence, the board now expects operating profits for the first half of the financial year to be lower than those of the corresponding period last year."Underlying sales in the period between 1 April and 25 July were up by 5% from the same period the previous year to £193m, but were down by 2% taking into account the transferral of the cooked meat business to a joint venture.Despite the tough markets, Cranswick said it still saw strong gains in fresh pork and bacon and continued growth in sandwiches and sausages. Underlying sales in cooked meats were also ahead of the same period last year, it said. "As previously stated in the group's preliminary results, released on 16 May 2011, the difficulties facing the UK consumer and the dynamics of the competitive UK market in which the company operates are making the current financial year more demanding than usual," the company said. "Whilst it is still early in the financial year, the board now expects to deliver a full year result below its original expectations."---RG Cranswick