Cranswick falls 13pc as it fails to bring home bacon
PLUMMETING pig prices and the cost of opening a chicken factory have pushed down profitability at meat processor Cranswick.
The firm said revenue was 2pc lower in the last three months of 2018 compared to the year before. It also warned of a hit to profits.
Cranswick blamed disappointing sales of pork products which growth in poultry and continental meats failed to offset.
UK pig prices have been pressured recently by subdued postChristmas demand, plentiful supplies on farms and low EU prices, according to the Agriculture and Horticulture Development Board.
Cranswick said this was being reflected in its charges to customers, pulling revenue down.
Investment in a poultry plant in Eye, Suffolk, is also squeezing Cranswick. Although it has signed an agreement with Morrisons to supply the supermarket with chickens from the factory, Cranswick said the start-up costs had only partially been offset by management cost-cutting.
The revenue decline was worse than analysts at Peel Hunt had expected, and they said the firm could come under more pressure as its rival Tulip ramps up the competition. Shares fell 12.6pc, or 374p, to 2590p.
Trouble for a competitor led to problems for advertising giant
WPP yesterday. The company, whose founder Sir Martin Sorrell left last year amid allegations he had used the firm’s money to pay a prostitute, which he denies, slid as its French peer Publicis released full-year results.
Publicis dramatically missed revenue growth targets in the fourth quarter of last year, driven by poor performance in North America, and investors were wary that WPP would be hit with the same problems. Shares in the firm, which have struggled to make any gains since Mark Read took over last September, dipped 8.4pc, or 73.2p, to 800.4p.
Natural disasters weighed on insurance business Beazley, which revealed profits had more than halved to £58.9m after a year of wildfires and hurricanes.
The firm remained upbeat as chief executive Andrew Horton pointed out it had seen a 12pc increase in written premiums over 2018, taking the total to £2bn.
Beazley was also calm on Brexit, saying that leaving the EU ‘should not present any insurmountable challenges’ for its business. Shares climbed 5.3pc, or 26p, to 520p.
Artificial knee and hip manufacturer Smith & Nephew was the
FTSE 100’ s biggest riser, jumping 5.7pc, or 83.5p, to 1545p.
Its profit was boosted as it won a one- off £68m legal settlement against insurers, related to artificial knee components which were withdrawn from the market in 2003. The blue-chip index still slid by 1.1pc, or 79.51 points, to 7093.58 points, as Smith & Nephew failed to make up for the losses at Tui (down 19.4pc, or 229.4p, to 954.6p),
Ocado (down 9.8pc, or 94.6p, to 873.8p) and WPP. Travel booking firm On The
Beach avoided the troubles of its larger peers as it met investors at its shareholder meeting.
In an update, it said revenue for the four months to January 31 grew by 20pc, even after marketing costs.
Last summer’s heatwave had forced the firm to cut its marketing spend, as fewer customers chose to holiday abroad. But yesterday the group said it was ramping up its offline marketing activity and its online adverts were becoming ‘increasingly efficient’. Shares rose 4.5pc, or 20p, to 460p.
Tax Systems, which creates technology to help companies keep their accounts in order, has been in ‘ advanced discussions’ with private equity firm Bowmark Capital about a 110p per share takeover. Shares jumped 6pc, or 6p, to 106.5p.