Smaller Companies: Cranswick is the market pet
Sunday 15 March 1998
Having reached a high of 267p, the shares have since slipped back to 244.5p. That still leaves them yielding a juicy 5 per cent, however, suggesting the scope for further gains ahead.
Cranswick is the largest supplier of tropical fish in the country, in the wake of its pounds 4m acquisition of Tropical Marine Centre in Hertfordshire two years ago.
As well as sales to companies to grace reception areas, tropical fish are a burgeoning area of interest for young children. Cheaper than hamsters and the like, they nevertheless offer far superior margins to their pedestrian predecessors, the humble goldfish, while still being relatively easy to look after.
The company also sells bird seed and pet food, a business where it is benefiting from the growth of pet superstores. Sales in this division are rising rapidly; from pounds 6m in 1994, they reached pounds 17.9m in 1997.
While the group shares with others in the sector the low margins typical of commodity food processors, pre-tax profits have also been on rising, from pounds 2.3m in 1994 to pounds 4m in 1997 on sales of pounds 157.6m.
Sutherlands, the stockbroker, forecasts that full-year pre-tax profits could reach pounds 4.5m, which translates into earnings per share of 22p (19.5p). That leaves them on a prospective p/e of a little over 11 times earnings - hardly over-demanding.
Elsewhere, Cranswick is a major supplier of pork products, from hams to sausages: many of the sausages on the shelves of Sainsbury's are made by Cranswick. It wants to expand this side as well: although margins here tend to be low and volatile, there is no reason to suppose that sensible deals cannot enhance shareholder value.
Continuing concerns over mad cow disease leave Cranswick well placed to exploit this window of opportunity. On a medium-term view, the shares are a buy.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 Prince Harry leaving the armed forced to pursue conservation projects in Africa
- 4 PornHub turns masturbation into energy in bid to save the planet
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
Leonard Nimoy dead: Star Trek Spock actor dies after suffering lung disease
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin, says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...