CRANSWICK (CWK) £33.04
Gain to date: 12.7% Original entry point: Buy at £29.32, 8 Feb 2018
OUR BULLISH CALL on fresh pork, sausage and cooked poultry processor Cranswick (CWK) remains 12.7% in the money, although the shares have recently fallen back from their £34.60 June peak.
Fears over the potential impact of retail sector consolidation on suppliers, and on the meat industry of a recent CO2 shortage, may be weighing on sentiment.
Cranswick’s first quarter update (30 Jul) also revealed a slowdown in sales growth to 3.2% amid modest deflation and against a barnstorming comparative.
Encouragingly however, the high quality food producer flagged positive contributions from each product category, said total export revenues were modestly ahead year-on-year and reassuringly left full year guidance unchanged.
Continuing to invest in its asset base, Cranswick attractions also include an unbroken dividend growth track record stretching back to 1990. Shore Capital forecasts pre-tax profit and dividend improvements to £95.3m (2018: £92.4m) and 55.7p (2018: 53.7p) respectively for the year to next March.