Cranswick PLC CWK Half Yearly Report

  Cranswick PLC (CWK) - Half Yearly Report

RNS Number : 9377R
Cranswick PLC
26 November 2012


                                      

                                      

                        CRANSWICK plc: INTERIM RESULTS

                               Continued growth

                                      



Cranswick plc ("Cranswick" or "the Company" or "the Group"), a leading UK
supplier of pork products, announces its unaudited results for the six months
ended 30 September 2012.



Highlights:



· Reported revenues up 6 per cent to £418.6m (2011: £393.9m)

· Underlying revenues increased by 5 per cent *

· Profit before tax rose by 21 per cent to £22.5m (2011: £18.5m)

· Earnings per share up 23 per cent to 35.8p (2011: 29.2p)

· Adjusted earnings per share 19 per cent higher at 35.8p (2011: 30.1p)

· Dividend increased to 9.4p per share (2011: 9.0p)

· Net debt £32.2m (30 Sept 2011: £48.2m)

· Kingston Foods Limited acquired on 29 June 2012



* Excluding Kingston Foods



Cranswick's Chairman, Martin Davey, said: "It is pleasing to report continued
growth in sales,  in what continues  to be a  difficult economic and  consumer 
environment, reflecting  the ongoing  popularity of  pork with  the  consumer, 
driven by both the  versatility and the  low relative price  of pork to  other 
proteins.



"Kingston Foods  has  made an  encouraging  contribution to  the  Group  since 
acquisition and  has  further  extended  Cranswick's  customer  portfolio  and 
strengthened the Group's cooked meat production capability.



"Rising input costs were a feature of  trading during the period and this  has 
continued into the second half, although efficiency improvements brought about
by investment  undertaken by  the business  and ongoing  constructive  pricing 
discussions with customers have helped offset the full impact of this.



"The Board currently anticipates a  more balanced trading performance  between 
the first and  second halves compared  to last  year when there  was a  strong 
second half bias. The  strategy for the development  of the business  remains 
unchanged with future growth being generated by a combination of  acquisitions 
and organic initiatives".

                                    -ends-

Enquiries:



Paul                         Quade                          

 07947 186 694

CityRoad Communications
  0207 248 8010

















Note to editors:



Cranswick was  formed in  the early  1970s  by farmers  in East  Yorkshire  to 
produce animal  feed and  has since  evolved into  a business  focused on  the 
supply of food products to the UK  food retail and food service sectors.  Well 
known for the production of gourmet  sausages the Company also supplies  fresh 
pork, cooked  meats,  air-dried  bacon,  charcuterie,  sandwiches  and  pastry 
products. Products are  sold primarily under  retailers own labels  including 
Sainsbury's 'Taste The  Difference' and Tesco's  'Finest' as well  as under  a 
number  of   brands   such  as   'Simply   Sausages',  'The   Black   Farmer', 
'Weightwatchers' and 'Red Lion Foods'. Sales  in the year to March 2012  were 
£821 million and have grown more than 350 per cent over ten years.

                             Chairman's statement



It is pleasing to report continued growth  in sales in what continues to be  a 
difficult economic and  consumer environment. Underlying  turnover in the  six 
months ended 30 September 2012  was 5 per cent ahead  of the same period  last 
year reflecting the ongoing  popularity of pork with  the consumer, driven  by 
both the versatility and the low relative price of pork to other proteins.

Total sales  for the  six months  were 6  per cent  higher after  taking  into 
account the contribution  from Kingston Foods  which was acquired  on 29  June 
2012. Kingston Foods has made, as anticipated, an encouraging contribution  to 
the Group  since acquisition  and has  further extended  Cranswick's  customer 
portfolio and strengthened the Group's cooked meat production capability.

Profit before  taxation for  the period  increased  by 21  per cent  to  £22.5 
million from the £18.5  million achieved in  a tough first  half a year  ago. 
Earnings per share were up by 23 per cent at 35.8 pence compared to 29.2 pence
last year. This has been a solid  performance by the business during a  period 
when further  investment was  undertaken  in the  asset  base to  provide  the 
platform for  continued  growth. Trading  highlights  and details  of  capital 
expenditure are covered in  the Review of Activities  by the Chief  Executive, 
Adam Couch. Adam was appointed Chief Executive on 1 August 2012 as  indicated 
when reporting to Shareholders in May 2012.

Operating cash  inflow in  the  period was  £18.1  million compared  to  £19.0 
million in the same period a year ago. At 30 September net debt stood at £32.2
million compared to £48.2 million at the same time last year and £21.7 million
at the March financial year end. Interest was covered 60 times. The Group  is 
in a sound  financial position further  details of which  are provided in  the 
Financial Review.

Rising input costs were a  feature of trading during  the period and this  has 
continued into  the  second  half.  It  impacted  margins  initially  although 
efficiency improvements brought about by investment undertaken by the business
and ongoing constructive pricing discussions with customers have helped offset
the full impact of this.

The interim dividend is being increased to 9.4 pence per share from 9.0  pence 
previously and will be paid on 25 January 2013 to Shareholders on the register
at the close of business on 7 December 2012. Shareholders will once again have
the option to receive the dividend by way of scrip issue.

The successful performance of  the business in the  period is a reflection  of 
the  expertise,  enthusiasm  and  commitment  of  the  management  and   their 
colleagues at each  of our product  focussed facilities and  on behalf of  the 
Board I express our sincere thanks and appreciation.

The Board currently  anticipates a more  balanced trading performance  between 
the first and  second halves compared  to last  year when there  was a  strong 
second half bias. The  strategy for the development  of the business  remains 
unchanged with future growth being generated by a combination of  acquisitions 
and organic initiatives.



Martin Davey

Chairman

26 November 2012





                             Review of activities

                                      



It is pleasing to report continued growth, with underlying revenues increasing
by 5  per  cent for  the  6  months to  30  September 2012.  This  growth  is 
particularly satisfying when considered against the backdrop of the continuing
difficult consumer environment.



The retail environment remains challenging with many of the Group's  customers 
reporting  flat  or,  at  best,  modest  sales  and  earnings  growth.   This 
notwithstanding, the value  proposition of pork  remains strong,  particularly 
compared to both beef and lamb. Pork's health attributes and versatility both
as an ingredient and as a complete meal solution continue to find favour  with 
the consumer.



Fresh pork sales increased by 1 per cent. This was on top of the 14 per cent
growth achieved  in the  same period  last year.  Further investment  in  the 
infrastructure of both the  Norfolk and Hull facilities  has led to  increased 
overall capacity and improved efficiencies.  At the Hull site, investment  in 
rapid chilling  has  increased  carcass  yields  and  further  expenditure  in 
butchery has delivered significant  throughput improvements. Both  operations 
now have  full approval  to export  to China  and the  Asian market  is  being 
targeted with a wide ranging portfolio of pork products. In addition, breaded
pork products  continue  to show  good  growth with  further  retail  listings 
expected in the coming months.



Sausage sales grew by 15 per cent, despite the disappointing summer  weather. 
This strong growth underlines the resilience of the premium sausage  category, 
as consumers  continue to  recognise  and appreciate  the quality,  value  and 
versatility of Cranswick's gourmet sausage offering. These products are now a
shopping basket staple with the top tier, premium range now representing  over 
a third of total  retail sausage sales.  The strong growth  in the first  six 
months of the  year was augmented  by an  exciting new range  of gourmet  beef 
burgers which  have  been developed  with  the same  uncompromising  focus  on 
quality with fresh ingredients and an artisan production process.



Bacon sales improved by 6 per cent in the first six months of the year  across 
a wide retail  client base  helped by  targeted promotional  plans and  strong 
category management. The Group has also successfully developed further retail
listings for  gammon  products  which  have  significantly  increased  volumes 
through the factory and  which are expected to  lead to further  opportunities 
going forward. These developments have been supported by further investment at
the Sherburn-in-Elmet  site to  drive improved  yields, increased  operational 
efficiencies and enhanced volume capability going forward.



Cooked meats performed strongly during the  first half of the year with  total 
sales ahead by 10  per cent including the  contribution from Kingston  Foods. 
New product development continues  to be a key  focus of Group activities  and 
particularly pleasing  has  been  the development  of  a  premium  hand-cured, 
air-dried ham range for one of  the Group's principal retail customers.  This 
range is the culmination of work undertaken at the Hull, Sherburn-in-Elmet and
Barnsley sites. This premium ham has  delivered a new benchmark for taste  and 
visual presentation in the category and sales are showing a pleasing  positive 
trend. Work has started on extending the Sutton Fields cooked meats  facility 
in Hull. The extension  will provide increased  capacity to meet  anticipated 
sales growth and will also improve production flows through the factory  which 
in turn will drive efficiency benefits.



Cranswick has  a  strong reputation  for  producing premium  products  of  the 
highest quality. This ethos has been further demonstrated by the  development 
of a range of  artisan handmade pastry products.  Pastry sales showed a  good 
increase on the same  period last year  from a modest  base. Buoyed by  this 
positive performance and with the  existing facilities operating at  capacity, 
construction of  a state  of  the art  production  facility in  Malton,  North 
Yorkshire is now underway.







The project, which  is earmarked for  completion in the  spring of 2013,  will 
allow the Group to  progress further its ambitions  in this sector.  Customers 
have been secured  and an  exciting range of  products is  being developed  to 
launch when the site is commissioned next year.



Sales of continental products were  2 per cent ahead  of the same period  last 
year. This was an outstanding performance  given the loss of business with  a 
major retail  customer  over the  last  12  months. Key  highlights  in  this 
category have  been the  new listings  of  fresh pasta  with a  major  grocery 
retailer and the introduction of a new retail customer for value added lines.



Sandwich sales increased by  9 per cent. The  business has secured  additional 
listings in the retail convenience market which  will be used as a solid  base 
upon which  to build.  Sales were  also boosted  by the  Atherstone  facility 
supplying sandwiches  to key  sporting  events over  the summer  period  which 
included the Olympic opening ceremony.



As has been  widely reported in  the media, food  inflation is a  key area  of 
concern to retailers, processors and  pig producers alike. Higher feed  costs 
are being reflected in  increased pig prices,  not only in  the UK but  across 
Europe. In addition, the  impending increased welfare  legislation in the  EU 
member states, which comes in to force on 1 January 2013, is already impacting
availability and pricing of pig meat from that region and may lead to  further 
EU herd contraction in 2013. With  firm demand and tightening supply, UK  pig 
prices are currently at record levels.  This is an issue affecting the  whole 
supply chain and the scale of the inflation and the need to ensure  continuity 
of supply has  necessitated discussions  on price increases  with the  Group's 
customers; these are underway and progressing well.



Despite the well documented challenges faced by the pig industry both at  home 
and across Europe,  the business' retail  customers and the  UK consumer,  the 
Group  has  delivered  a  pleasing  first  half  performance  through  focused 
alignment with customer and consumer needs. This action is supported by  well 
invested, highly efficient, industry leading facilities and strong  management 
in all areas of the business. Given the difficult wider consumer environment,
these key  attributes are  and will  remain imperative  to Cranswick's  future 
successful performance and development.











Adam Couch

Chief Executive

26 November 2012

                               Financial review



The Group is presenting its interim  financial information for the six  months 
to 30 September  2012 with comparative  information for the  six months to  30 
September 2011 and the year to 31 March 2012.



Revenue

Revenue increased  by 6  per  cent from  £393.9  million to  £418.6  million. 
Adjusting for the contribution from Kingston Foods Limited which was  acquired 
on 29  June 2012,  underlying sales  increased by  5 per  cent, with  positive 
contributions from all categories.



Group operating profit

Group operating profit  at £22.8 million  was 17 per  cent higher.  Operating 
margin at 5.5 per cent of sales was also well above the 5.0 per cent delivered
in the same  period last  year, albeit  lower than  the 5.7  per cent,  before 
goodwill impairment, reported  for the last  financial year as  a whole.  The 
lower operating margin reported  in the first half  of the previous  financial 
year reflected a  sharp increase  in input  costs during  the first  quarter. 
Input costs eased in the second quarter and this together with some  inflation 
recovery from the Group's customers and robust export sales and margins led to
a strong  second half  performance.  There was  modest input  cost  inflation 
during the first half  of the current financial  year and this, together  with 
less buoyant export margins,  resulted in the  Group operating margin  falling 
back from the level achieved in the second half of the last financial year.



Interest

Net financing costs at £0.4 million were 24 per cent lower than the first half
of the prior year, reflecting  lower net borrowings. Interest cover  improved 
from 37.7 times to 59.9 times.



Taxation

The tax charge as a percentage of  profit before tax was 23.3 per cent  (2011: 
24.7 per cent). The standard rate of  corporation tax was 24 per cent  (2011: 
26 per cent).  The charge for  both the current  and prior periods  benefited 
from a  £0.3  million deferred  tax  credit following  a  1 per  cent  enacted 
reduction in the UK corporation tax rate from April 2013 (2011: April  2012). 
Adjusting for this  credit the  underlying effective  rate was  24.6 per  cent 
(2011: 26.5 per cent).



Earnings per share

Basic earnings per share rose by 23 per  cent to 35.8 pence in the six  months 
to 30  September 2012.  After  adjusting for  the  impact of  the  associate, 
Farmers Boy (Deeside) Limited, in the prior year, adjusted earnings per  share 
were still 19 per cent higher (note 5). The average number of shares in issue
was 48,115,000 (2011: 47,634,000).



Acquisitions

On 29 June 2012 the Group acquired 100 per cent of the issued share capital of
Kingston Foods Limited for an initial  cash consideration of £6.0 million  net 
of cash acquired of £1.9 million. A further £2.5 million of consideration may
become payable contingent on  the performance of the  business during a  three 
year period from the date of acquisition. Kingston made an encouraging  start 
under Cranswick  ownership contributing  £0.3 million  to the  Group's  profit 
after tax in the period following acquisition.



Cash flow and borrowings

The net cash inflow from operating  activities was £18.1 million (2011:  £19.0 
million) reflecting  a £6.9  million working  capital increase  in the  period 
driven by revenue growth and higher inventory levels which were built ahead of
rising input  costs. Net  debt increased  in the  six month  period by  £10.6 
million to £32.2 million, but was  £16.0 million lower than the previous  half 
year end level.



Cash flow  included £14.6  million of  capital expenditure  and the  net  £6.0 
million spent on the acquisition of Kingston Foods Limited. Net debt fell  to 
just 13 per cent  of shareholders' funds  (2011: 21 per  cent) as the  Group's 
balance sheet continues  to be  conservatively managed.  The Group's  current 
bank facility of £100 million extends  to July 2015 and provides the  business 
with generous headroom and medium term funding to meet its objectives.



Pensions

The Group operates a  number of defined  contribution pension schemes  whereby 
contributions are  made to  schemes operated  by major  insurance  companies. 
Contributions to these schemes  are determined as  a percentage of  employees' 
earnings. The Group also operates a defined benefit pension scheme which  has 
been closed to further benefit accrual since 2004. The deficit on this scheme
at 30 September 2012  was £5.7 million  which compared to  £5.3 million at  31 
March 2012. Cash contributions  to the scheme during  the period, as part  of 
the programme to reduce the deficit, were £0.6 million. The present value  of 
funded obligations was  £21.7 million and  the fair value  of plan assets  was 
£16.0 million.



The valuation  of the  defined  benefit pension  liability is  dependent  upon 
market conditions and actuarial  methods and assumptions (including  mortality 
assumptions). Such changes in actuarial  assumptions and the performance  of 
the funds may  result in changes  to amounts charged  or released through  the 
income statement  and the  Group  may be  required  to pay  increased  pension 
contributions in  the future.  The Board  will regularly  review its  pension 
strategy with  reference to  the value  of assets  and liabilities  under  the 
pension scheme  as  well as  the  potential  impact of  changes  in  actuarial 
assumptions.



Principal risks and uncertainties

There are  a number  of risks  and uncertainties  facing the  business in  the 
second half  of the  financial  year. The  Board  considers these  risks  and 
uncertainties to be the same as those  described in the Report & Accounts  for 
the year ended 31 March 2012, dated 21 May 2012, a copy of which is  available 
on the  Group's  website  at www.cranswick.co.uk.  The  principal  risks  and 
uncertainties which are set out  in detail on pages 14  to 17 of the Report  & 
Accounts for the year ended 31 March 2012 are:



Industry risks            Operational      Human  resource Financial risks
                          risks            risks
· State of the economy                                  · Interest rate,
                          · Food safety · Health &   currency, liquidity
· Competition,                          safety          and credit risk
customer retention and    · Business
reliance on key customers continuity       · Ethical    · Granting of
                                           management      credit and
· Raw material price   · Legislation                 recoverability of
fluctuations                               · Staff      debt
                          · Overseas    recruitment and
· Environmental        markets          retention       · Business
matters                                                    acquisitions
                          · Technology  · Access to
· Food scares and                       workforce
product contamination     · Business
                          integration
· Supplier standards



Country and currency risk

The Board continues  to be mindful  of the current  difficult global  economic 
conditions and in particular those  facing the Eurozone. The Board  considers 
the risk facing  the Group  in this  respect to be  limited, with  all of  the 
Group's operations located in the UK and more than 95 per cent of the  Group's 
sales being to UK customers. However, the Board continues to closely  monitor 
the Group's policies on granting of credit to overseas customers and terms  of 
trade with foreign suppliers including hedging foreign currency purchases  and 
considers that the associated risks are being managed appropriately.









Forward looking information

This interim  report  contains  certain  forward  looking  statements.  These 
statements are made by  the Directors in good  faith based on the  information 
available to  them at  the time  of their  approval of  this report  and  such 
statements should be treated with  caution due to the inherent  uncertainties, 
including both economic and business risk factors, underlying any such forward
looking information.



Going concern

The Group's business activities,  together with the  factors likely to  affect 
its future development, performance and position are set out in the 'Review of
activities'. The financial position of  the Group, its cash flows,  liquidity 
position  and  borrowing  facilities  are  described  above.  The  Group  has 
considerable financial resources  together with  strong trading  relationships 
with its key customers and suppliers. As a consequence, the Directors believe
that the  Group is  well  placed to  manage  its business  risk  successfully, 
despite the current uncertain economic outlook.



After making enquiries, the Directors  have a reasonable expectation that  the 
Group has  adequate resources  to continue  in operational  existence for  the 
foreseeable future. For this reason, they continue to adopt the going  concern 
basis in preparing the condensed consolidated interim financial statements.









Mark Bottomley

Finance Director

26 November 2012

              Cranswick plc: Group income statement (unaudited)

                  for the six months ended 30 September 2012

                                      

                                      

                                      Notes      Half year             Year to
                                               2012     2011 31 March 2012
                                                £'000      £'000         £'000
Revenue                                       418,645    393,932       820,775
Cost of sales                               (367,649)  (348,143)     (718,605)
Gross profit                                   50,996     45,789       102,170
Operating expenses excluding impairment      (28,162)   (26,269)      (55,434)
Group operating profit before impairment       22,834     19,520        46,736
Impairment of goodwill                              -          -       (4,924)
Group operating profit                         22,834     19,520        41,812
Share of results of associate                       -      (514)         (712)
Profit on disposal of associate                     -          -         8,254
Profit before net finance costs and tax        22,834     19,006        49,354
Finance revenue                                    39         78           151
Finance costs                                   (420)      (582)       (1,154)
Profit before tax                              22,453     18,502        48,351
Taxation                                 4    (5,238)    (4,575)      (10,871)
                                                                          

Profit for the period                          17,215     13,927        37,480


Earnings per share (pence)
On profit for the period:
Basic                                    5      35.8p      29.2p         78.6p
Diluted                                  5      35.7p      29.2p         78.4p
Adjusted

(excluding effect of associate and
goodwill impairment):
Basic                                    5      35.8p      30.1p         72.9p
Diluted                                  5      35.7p      30.1p         72.7p



      Cranswick plc: Group statement of comprehensive income (unaudited)

                  for the six months ended 30 September 2012

                                      

                                      

                                                       Half year      Year to

                                                                     31 March
                                                      2012       2011     2012

                                                     £'000      £'000    £'000
Profit for the period                               17,215     13,927   37,480
Other comprehensive income
Movement on hedging items:
Losses arising in the period                          (15)        (3)     (69)
Reclassification adjustment  for  losses/  (gains)                         
included in the income statement
                                                        69      (146)    (146)
Actuarial losses on defined benefit pension scheme   (899)    (1,835)  (3,504)
Deferred  tax  relating  to  components  of  other                         
comprehensive income
                                                       195        496      892
      Other  comprehensive  income  for  the         (650)    (1,488)  (2,827)
      period, net of tax
      Total  comprehensive  income  for  the                               
      period attributable to  owners of  the 
      parent                                        16,565   12,439   34,653

               Cranswick plc: Group balance sheet (unaudited)

                             at 30 September 2012



                                                  Half year            As at

                                                                    31 March
                                                  2012       2011       2012

                                                 £'000      £'000      £'000
Non-current assets
Intangible assets                              130,382    127,763    122,839
Property, plant and equipment                  138,003    124,569    130,853
Investment in associate                              -      5,277          -
Financial assets                                 1,050      3,846      1,398
Total non-current assets                       269,435    261,455    255,090
Current assets
Inventories                                     44,311     39,302     38,516
Trade and other receivables                     91,161     85,611     85,534
Financial assets                                   696      1,321        696
Cash and short-term deposits                    10,705      7,351     20,100
Total current assets                           146,873    133,585    144,846
Assets held for sale                                 -          -        221
Total assets                                   416,308    395,040    400,157
Current liabilities
Trade and other payables                      (94,572)   (92,271)   (91,078)
Financial liabilities                            (326)      (335)    (1,624)
Income tax payable                             (6,015)    (5,182)    (5,936)
Provisions                                       (189)      (410)      (389)
Total current liabilities                    (101,102)   (98,198)   (99,027)
Non-current liabilities
Other payables                                   (434)      (526)      (462)
Financial liabilities                         (46,741)   (59,236)   (42,301)
Deferred tax liabilities                       (6,446)    (7,595)    (7,093)
Provisions                                       (188)          -          -
Defined benefit pension scheme deficit         (5,725)    (4,220)    (5,342)
Total non-current liabilities                 (59,534)   (71,577)   (55,198)
Total liabilities                            (160,636)  (169,775)  (154,225)
Net assets                                     255,672    225,265    245,932
Equity
Called-up share capital                          4,833      4,772      4,803
Share premium account                           60,221     57,033     58,642
Treasury shares                                      -      (136)          -
Share-based payments                             6,579      4,819      5,603
Hedging reserve                                   (15)        (3)       (69)
Retained earnings                              184,054    158,780    176,953
Equity attributable to owners of the parent    255,672    225,265    245,932

           Cranswick plc: Group statement of cash flows (unaudited)

                  for the six months ended 30 September 2012

                                      

                                                 Half year  Year to 31
                                                                         March
                                                    2012    2011          2012

                                                   £'000   £'000         £'000
Operating activities
Profit for the period                             17,215  13,927        37,480
Adjustments to reconcile Group profit for the
period to net cash inflows from operating
activities:
Income tax expense                                 5,238   4,575        10,871
Net finance costs                                    381     504         1,003
Fair value adjustment to put option in                 -    (95)          (95)
relation to associate
Share of result of associate                           -     514           712
Gain on sale of associate                              -       -       (8,254)
Gain on sale of property, plant and equipment       (32)    (22)         (140)
Depreciation of property, plant and equipment      7,579   6,750        13,972
Impairment of goodwill                                 -       -         4,924
Amortisation of intangibles                           40       -             -
Share-based payments                                 976     717         1,501
Difference between pension contributions paid                              
and amounts recognised in the income statement
                                                   (516)   (529)       (1,076)
Release of government grants                        (32)    (18)          (55)
Increase in inventories                          (5,362) (3,608)       (2,822)
Increase in trade and other receivables          (3,758) (6,812)       (6,610)
Increase in trade and other payables               2,261   9,016         5,405
Cash generated from operations                    23,990  24,919        56,816
Tax paid                                         (5,937) (5,955)      (11,283)
Net cash from operating activities                18,053  18,964        45,533
Cash flows from investing activities
Interest received                                     39      77           173
Principal amounts received in relation to            348       -         1,906
loans advanced
Acquisition of subsidiary, net of cash           (5,986)       -             -
acquired
Purchase of property, plant and equipment       (14,596) (8,764)      (20,311)
Receipt of government grants                           4     156           149
Proceeds from sale of property, plant and             48      37           308
equipment
Proceeds from sales of associate                       -       -        14,500
Proceeds from sale of investment classified as       221       -             -
held for sale
Net cash used in investing activities           (19,922) (8,494)       (3,275)
Cash flows from financing activities
Interest paid                                      (455)   (698)       (1,305)
Proceeds from issue of share capital                  56      33           702
Purchase of own shares                                 -   (136)         (136)
Proceeds from borrowings                           2,000  10,000             -
Issue costs of long term borrowings                    - (1,005)       (1,005)
Repayment of borrowings                                -       -       (7,000)
Dividends paid                                   (7,828) (8,511)      (11,831)
Repayment of capital element of finance leases     (183)   (193)         (272)
Net cash used in financing activities            (6,410)   (510)      (20,847)
Net (decrease)/ increase in cash and cash        (8,279)   9,960        21,411
equivalents
Cash and cash equivalents at beginning of         18,788 (2,623)       (2,623)
period
Cash and cash equivalents at end of period        10,509   7,337        18,788

                                      

                                      

                                      

                                      

       Cranswick plc: Group statement of changes in equity (unaudited)

                  for the six months ended 30 September 2012



                   Share   Share Treasury   Share- Hedging Retained    Total

                 capital premium   shares    based reserve earnings   equity
                                                                             
                                       payments                       

                   £'000   £'000    £'000    £'000   £'000    £'000    £'000
                                                                             
                                                                             
At 1 April 2012    4,803  58,642        -    5,603    (69)  176,953  245,932
Profit for the         -       -        -        -       -   17,215   17,215 
period
Other                  -       -        -        -      54    (704)    (650)
comprehensive                                                                
income
Total                  -       -        -        -      54   16,511   16,565
comprehensive                                                                
income
Share-based            -       -        -      976       -        -      976 
payments
Scrip dividend        19   1,534        -        -       -        -    1,553 
Share options         11      45        -        -       -        -       56 
exercised
Dividends              -       -        -        -       -  (9,381)  (9,381) 
Deferred tax           -       -        -        -       -     (68)     (68)
relating to                                                                  
changes in
equity
Corporation tax                                                      
relating to                                                                  
changes in             -       -        -        -       -       39       39
equity
                                                                             
At 30 September    4,833  60,221        -    6,579    (15)  184,054  255,672 
2012
                                                                             
                                                                             
At 1 April 2011    4,764  56,609        -    4,102     146  155,311  220,932 
Profit for the         -       -        -        -       -   13,927   13,927 
period
Other                  -       -        -        -   (149)  (1,339)  (1,488)
comprehensive                                                                
income
Total                  -       -        -        -   (149)   12,588   12,439
comprehensive                                                                
income
Own shares             -       -    (136)        -       -        -    (136) 
acquired
Share-based            -       -        -      717       -        -      717 
payments
Scrip dividend         5     394        -        -       -        -      399 
Share options          3      30        -        -       -        -       33 
exercised
Dividends              -       -        -        -       -  (8,910)  (8,910) 
Deferred tax           -       -        -        -       -    (255)    (255)
relating to                                                                  
changes in
equity
Corporation tax                                                      
relating to                                                                  
changes in             -       -        -        -       -       46       46
equity
                                                                             
At 30 September    4,772  57,033    (136)    4,819     (3)  158,780  225,265 
2011
                                                                             
                                                                             
At 1 April 2011    4,764  56,609        -    4,102     146  155,311  220,932 
Profit for the         -       -        -        -       -   37,480   37,480 
year
Other                  -       -        -        -   (215)  (2,612)  (2,827)
comprehensive                                                                
income
Total                  -       -        -        -   (215)   34,868   34,653
comprehensive                                                                
income
Own shares             -       -    (136)        -       -        -    (136) 
acquired
Share-based            -       -        -    1,501       -        -    1,501 
payments
Scrip dividend        19   1,351        -        -       -        -    1,370 
Share options         20     682        -        -       -        -      702
exercised                                                                    
(proceeds)
Share options          -       -      136        -       -    (136)        -
exercised                                                                    
(transfer)
Dividends              -       -        -        -       - (13,201) (13,201) 
Deferred tax           -       -        -        -       -     (52)     (52)
relating to                                                                  
changes in
equity
Corporation tax                                                      
relating to                                                                  
changes in             -       -        -        -       -      163      163
equity
                                                                             
At 31 March 2012   4,803  58,642        -    5,603    (69)  176,953  245,932 







Responsibility statement



The Directors confirm that to the best of their knowledge the condensed set of
financial statements  has been  prepared  in accordance  with IAS  34  Interim 
Financial Reporting and includes a fair review of the information required  by 
DTR 4.2.7R (an indication of important events during the first six months  and 
a description of the principle risks  and uncertainties for the remaining  six 
months of  the  year)  and  by  DTR 4.2.8R  (a  disclosure  of  related  party 
transactions and changes therein) of the Disclosure and Transparency Rules.



On behalf of the Board









Martin Davey  Mark Bottomley

Chairman Finance Director



26 November 2012





Notes to the interim accounts



1. Basis of preparation

This interim report was approved by the Directors on 26 November 2012 and  has 
been prepared in accordance with the Disclosure and Transparency Rules of  the 
UK's Financial  Services Authority  and  the requirements  of IAS  34  Interim 
Financial Reporting as adopted by the European Union. The information does not
constitute statutory  accounts  within  the  meaning of  Section  434  of  the 
Companies Act 2006. The  statutory accounts for the  year ended 31 March  2012 
prepared under IFRS as adopted by the European Union have been filed with  the 
Registrar of Companies. The report of  the auditors on the statutory  accounts 
was not qualified and did not contain a statement under Section 498(2) or  (3) 
of the Companies Act 2006. The  interim report has not been reviewed  pursuant 
to the  Auditing Practices  Board  guidance on  'Review of  Interim  Financial 
Information' and does  not include all  of the information  required for  full 
annual financial statements.





2. Accounting policies

The accounting policies applied  by the Group in  this interim report are  the 
same as those applied by  the Group in the  financial statements for the  year 
ended 31 March 2012.



The following accounting standards and interpretations became effective for
the current reporting period:



International Accounting Standards (IAS / IFRSs)                Effective date
IAS 12 Income Taxes (Amendment) - Deferred taxes: Recovery of   1 January 2012
       underlying assets

The application of  this standard has  not had  a material effect  on the  net 
assets, results and disclosures of the Group.





3. Segmental analysis

IFRS 8  requires operating  segments to  be  identified on  the basis  of  the 
internal financial information reported to the Chief Operating Decision  Maker 
('CODM'). The Group's  CODM is deemed  to be the  Executive Directors on  the 
Board, who  are  primarily responsible  for  the allocation  of  resources  to 
segments and the assessment of performance of the segments.



The CODM assesses profit performance using profit before taxation measured  on 
a basis consistent with the disclosure in the Group accounts.



The Group reported on  just one reportable segment  during the period and  the 
preceding financial year.  The revenues  of the Group  are not  significantly 
impacted by seasonality.



Additions to property  plant and  equipment during the  period totalled  £14.1 
million (2011: £8.1 million). Future capital expenditure under contract at 30
September 2012 was £5.0 million (2011: £3.4 million).





4. Taxation

The tax charge for the period was  £5.2 million and represents a rate of  23.3 
per cent (2011: 24.7 per cent). The tax charge for the period benefited  from 
a £0.3 million deferred tax credit reflecting the enacted reduction in the  UK 
corporation tax rate to 23 per cent from April 2013. Adjusting for this  item 
the overall effective rate was 24.6 per cent.





5. Earnings per share

Basic earnings per share are based on profit attributable to shareholders  and 
on the  weighted  average number  of  shares in  issue  during the  period  of 
48,115,168 (2011: 47,634,237)  excluding treasury  shares and  shares held  by 
Cranswick Trustees Limited  on behalf  of the Cranswick  plc Employee  Benefit 
Trust. The calculation of diluted earnings  per share is based on  48,236,454 
shares (2011: 47,730,268).



Adjusted earnings per share

The Group acquired an interest in associate Farmers Boy (Deeside) Limited on 9
July 2010 and disposed of  the investment on 30  March 2012. In addition,  in 
the year ended 31 March 2012 the Group impaired the carrying value of goodwill
in relation to its Sandwiches cash generating unit. As the investment in  the 
associate and the goodwill impairment do not form part of the ongoing business
of the Group the Directors consider it appropriate to present an adjusted  EPS 
on the face of the income statement which excludes the effect of the associate
and goodwill impairment to facilitate a more meaningful comparison with  prior 
and future  periods. Adjusted  earnings per  share are  calculated using  the 
weighted average  number of  shares  for both  basic  and diluted  amounts  as 
detailed above.



Net profits excluding the effect of the associate and goodwill impairment  are 
derived as follows:



                                                        Half year     Year to

                                                                     31 March
                                                         2012    2011     2012

                                                        £'000   £'000    £'000
Profit for the period                                  17,215  13,927   37,480
Share of results of associate                               -     514      712
Profit on disposal of associate                             -       -  (8,254)
Fair value adjustment  to put option  in relation  to       -    (95)     (95)
associate
Impairment of goodwill                                      -       -    4,924
Profit for the period  excluding effect of  associate                      
and goodwill impairment
                                                       17,215  14,346   34,767



6. Dividends - half year ended 30 September



                                                                         Year
                                                                    Half year         to

                                                                                      31
                                                                                   March
   2012  2011    2012
                                                                                       
                                                                   £'000 £'000   £'000
                                                                                       
Interim dividend for year ended 31 March 2012 of 9.0p per share                    
                                                                                       
                                                                       -     -   4,291
Final dividend for year ended 31 March 2012 of 19.5p (2011:                        
18.7p) per share                                                                       
                                                                   9,381 8,910   8,910
                                                                   9,381 8,910  13,201 

The interim dividend for the year ending  31 March 2013 of 9.4p per share  was 
approved by the Board on  26 November 2012 for  payment to shareholders on  25 
January 2013 and  therefore has  not been  included as  a liability  as at  30 
September 2012.



7. Analysis of Group net debt

                                    At      Cash   Non-cash            At

                              31 March      flow  movements  30 September

                                  2012                               2012
                                 £'000     £'000      £'000         £'000
Cash and short-term deposits    20,100   (9,395)          -        10,705
Overdrafts                     (1,312)     1,116          -         (196)
Net cash and cash equivalents   18,788   (8,279)          -        10,509
Other financial assets           2,094     (348)          -         1,746
                                20,882   (8,627)          -        12,255
Revolving credit              (42,246)   (2,000)      (126)      (44,372)
Finance leases                   (298)       183          -         (115)
Net debt                      (21,662)  (10,444)      (126)      (32,232)

Net debt  is  defined as  cash  and  cash equivalents,  loans  receivable  and 
interest rate swaps at  fair value less interest  bearing liabilities (net  of 
unamortised issue costs).



8. Acquisition

On 29 June 2012, the Group acquired  100 per cent of the issued share  capital 
of Kingston Foods  Limited for a  total consideration of  £10.2 million.  The 
principal  activity  of  Kingston  Foods   Limited  is  the  manufacture   and 
distribution of cooked meat and poultry products.

Book and fair  values of the  net assets at  the date of  acquisition were  as 
follows:



                                          Acquiree's            

                                          book value            

                                              before  Provisional

                                         combination   fair value

                                               £'000        £'000
Net assets acquired:
    Customer relationships                         -          795
    Property, plant and equipment                857          682
    Inventories                                  433          433
    Trade receivables                          1,743        1,743
    Bank and cash balances                     1,857        1,857
    Trade payables                           (1,615)      (1,615)
    Provisions                                     -        (187)
    Corporation tax liability                   (97)         (97)
    Deferred tax liability                     (100)        (200)
                                               3,078        3,411
Goodwill arising on acquisition                             6,788
Total consideration                                        10,199
Satisfied by:
    Cash                                                    7,843
    Contingent consideration                                2,356
                                                           10,199
Net cash outflow arising on acquisition:
    Cash consideration paid                                 7,843
    Cash and cash equivalents acquired                    (1,857)
                                                            5,986





The fair  values on  acquisition are  provisional  due to  the timing  of  the 
transaction and  will be  finalised within  twelve months  of the  acquisition 
date.



From the date  of acquisition,  the acquired  business has  contributed a  net 
profit after tax of £0.3 million to  the Group. If the combination had  taken 
place at the beginning  of the period,  the Group's profit  after tax for  the 
period would  have been  £17.5 million  and revenues  would have  been  £422.7 
million.



Included  in  the  £6,788,000  of  goodwill  recognised  above,  are   certain 
intangible assets that cannot be individually separated from the acquiree  and 
reliably measured due to their nature. These items include the expected value
of synergies and an assembled workforce.





9. Related party transactions

During the period the Group entered into transactions, in the ordinary  course 
of business, with its  subsidiaries which are  related parties. Balances  and 
transactions with subsidiaries are eliminated on consolidation.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR UOVNRUKAAUAA -0- Nov/26/2012 07:00 GMT
 
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