Cranswick Shares Hit New Highs on Strong Trading Update

Shares of Cranswick plc (LON: CWK), a leading food producer in the UK, saw a significant rise following the company's latest trading update. The share price closed up 6.04% at 5,000, after earlier breaching the level to set a new 52 week high of 5041.77.

The positive trading update has been attributed to several factors. Notably, Cranswick reported that trading after the first quarter had surpassed expectations. This is linked to robust volume growth in the core UK food business, reflecting a healthy consumer demand and the effectiveness of the company's market strategies.

Further aiding the company's performance are the expanding pig farming operations, which have now begun to yield positive outcomes. In light of these developments, Cranswick anticipates first-half results that will exceed those of the previous year.

Analysts from Barclays have highlighted the high valuation of Cranswick, approximately 18 times FY25 P/E. This positions the company ahead of its counterparts in both European and UK consumer staples sectors. Despite the steep valuation, Barclays analysts see continued upside potential for Cranswick. The company's consistent top-line and earnings delivery, diversified revenue mix, and ongoing investments in its asset base are cited as the key reasons for this optimism.

Cranswick has also taken proactive steps to diversify its offerings by commissioning a new houmous production facility in Worsley, Manchester. This move is aimed at enhancing production capabilities and addressing the increasing consumer demand for plant-based food options, aligning the company's product portfolio with current health trends.

Despite the positive indicators, Cranswick's management maintains a cautious outlook amid the uncertain economic and geopolitical climate. However, with the strong performance continuing, they expect the results for the financial year ending 29 March 2025 to be at the upper end of current market expectations.

Supporting this sentiment, analysts from RBC Capital Markets have expressed confidence that Cranswick's recent strong performance will not only continue but will also be sustainable over time.