UPDATE 2-Higher pork demand boosts Cranswick's full-year profit

* Full-year adjusted pretax profit up 6 pct at 52.2 mln stg

* Revenue rises 14 pct at 994.9 mln stg

* Operating margins fall to 5.4 pct from 5.7 pct last year (Adds comments from CEO, analyst; updates share movement)

By Aastha Agnihotri

May 19 (Reuters) - British pork and pies producer CranswickPlc reported a better-than-expected full-year pretaxprofit driven by increased consumer appetite for locallyproduced pork.

The horsemeat scandal last year encouraged consumers to buyUK-reared pork, pushing up demand for Cranswick's products suchas sausage, bacon and sandwiches.

The company's adjusted pretax profit jumped to 52.2 millionpounds ($87.9 million) in the year ended March 31 from 49.1million pounds a year earlier.

Revenue rose about 14 percent to 994.9 million pounds.

Analysts on average expected Cranswick to report a full-yearpretax profit of 50.95 million pounds, on revenue of 986.72million pounds, according to Thomson Reuters I/B/E/S.

Cranswick, which is involved in breeding and rearing ofpigs, suffered higher input costs in the first-half to the endof third-quarter, hurting its overall operating profit marginsthat fell to 5.4 percent from 5.7 percent a year earlier.

"Margins were under pressure but we had great sales growthwhich we expect to continue next year," Chief Executive AdamCouch told Reuters.

Cranswick, which sources 80 percent of pigs through farmersin the UK, said margins were also hurt by the start-up costs ofa new pastry facility at Malton in North Yorkshire.

"Pig prices retreated in Q4 and have been more stable since(164p/kg currently) and the pastry facility is now through itsstartup phase. Hence, we expect a small margin recovery inFY15E," Investec analyst Nicola Mallard said in a note.

The sausage maker has invested 20 million pounds in itsproduction facilities in the past one year, including Malton.

Cooked meat sales rose 16 percent helped by higher demandfor premium ham products.

FOOD-ON-THE-GO

Cranswick, which supplies to Tesco Plc, Morrisonsand Marks and Spencer Group, expects to maintain itsstrong performance by catering to a growing sandwich market andincreased demand for readymade food.

The company also plans to invest more in its sandwichfacilities in the next 12 months as part of its "food-on-the-go"proposition, Couch said.

Cranswick, which generates about 90 percent of its salesdomestically, is also trying to improve prospects abroad byopening new facilities in Southeast Asia.

"Export credentials are becoming very important for us.Today we export about a third of our volumes to countriesoutside UK," the CEO added.

Cranswick raised its final dividend by 6.8 percent to 22pence per share.

Shares in the Hull-based company were up 0.17 percent at1,213.63 pence at 0917 GMT on the London Stock Exchange. Thebenchmark index was down 0.68 percent. ($1 = 0.5942 British Pounds) (Reporting by Aastha Agnihotri in Bangalore; Editing byGopakumar Warrier)