Within the UK inventory market, some companies simply appear to maintain on performing effectively, yr after yr.

Take Cranswick (LSE: CWK), for instance. I first seen the corporate in about 2010. Since then, the efficiency of the shares has been wonderful. They’re up simply over 20% on this yr alone.

The agency makes premium, contemporary and added-value meals merchandise for large supermarkets, grocers and the food-to-go sector. On prime of that, there’s a “substantial” export operation and a pet meals enterprise.

A lot of the merchandise are based mostly on pork and poultry, and Cranswick owns a lot of its personal provide chain, from pig farms to producing the ultimate product.

Multi-year progress

There have been regular positive factors over the previous 14 years since I’ve been watching. However the excellent news retains on coming, and at this time (29 July) Cranswick delivered one more optimistic buying and selling assertion. This time it covers the primary quarter to 29 June 2024.

Trading has been robust with “robust” demand within the agency’s core UK meals classes. Income rose 6.7% yr on yr and 6.4% on a like-for-like foundation, pushed by “strong” quantity development.

Export gross sales have been effectively forward however offset by decrease pricing in Asia and the EU. Nevertheless, the administrators reckon there are early indicators that Far East costs are starting to agency up.

One of many issues I like about Cranswick is the way in which makes bolt-on acquisitions to assist preserve the expansion momentum going. It’s doing it by reinvesting money circulation and income largely, as a result of the steadiness sheet seems sturdy with modest web debt.

For instance, the agency acquired Grove Pet Meals in 2022 and has since partnered with Pets at Dwelling to produce dry canine meals underneath its Wainwrights and Step Up manufacturers. In at this time’s replace, the corporate mentioned income got here in “strongly” forward in that division.

This yr, the corporate acquired an East Anglian pig provider, including to the corporate’s pig herd. Trying forward, chief govt Adam Sofa mentioned the agency expects to additional spend money on its agricultural operations to make sure “supply chain security and value optimisation”.  

A optimistic outlook

In the meantime, the administrators consider demand for Cranswick’s merchandise will doubtless stay sturdy for the remainder of the yr.

Metropolis analysts have pencilled in a rise in normalised earnings of slightly below 11% for the present buying and selling yr to March 2025 and about 5% for the yr following.

With the share price close to 4,685p, the forward-looking earnings a number of is a just under a full-looking 18 for subsequent yr. So this development story is well-known to the inventory market.

At the moment’s valuation is larger than the modest ranking I first stumbled throughout in 2010. Due to this fact, there’s a little bit of threat in that scenario for shareholders.

If Cranswick fails to fulfill its estimates, the share price could decline. It’s occurred earlier than, and the multi-year earnings document does have its weak patches. So it’s not at all times been straight up for this one.

Nonetheless, on steadiness and regardless of the dangers, I reckon Cranswick is value consideration as a inventory to carry for the long run.