The tremendous run of the share price since the financial debacle of 2008 has been phenomenal but at a PE ratio of 23.70 it’s overvalued and the share price itself has had such a run up that to invest now would be dangerous.
Revenue in the three months to 30 June 2017 was 27% ahead of the same period last year and like-for-like revenue grew by 21% compared to the same period last year – outstanding numbers. ‘Further progress on the new continental products factory in Greater Manchester will consolidate current production and provide substantial additional capacity to support future growth.’
As for the outlook:
With experienced management at all levels of the Group, a strong range of products, a well-invested asset base and a robust financial position, the Board is confident in both the outlook for the current financial year, which remains unchanged, and the continued long-term success and development of the business.
Why Has Cranswick’s Share Performed So Well
In 2008 Cranswick’s (LSE: CWK) share price dived to 500p.
Today they stand at 3000p – a whopping 500% increase in value in 9 years or 50% annualised.
Whichever way you cut the numbers it’s a very impressive run.
Returns on Capital Employed have hovered between 24 and 27% for the last five years and dividends have grown yearly between 4% and 11%.
This is a sign of a financially strong business – indeed long term debt is a miserly £32 million, not bad for a business that generated £1.25 billion in sales in it’s last full year of trading.
But more to the point, the management have simply been exceptional in their stewardship of Cranswick’s (LSE: CWK) and here’s what Adam Couch Chief Executive Officer had to say when full year results were released 27 May
We have reported another year of strong growth in financial results, during which we have also made further strategic and commercial progress.
We enter the new financial year in excellent shape having added to our asset base, enhanced market positions and successfully integrated our two strategically important acquisitions during the last twelve months. We have further strengthened the solid foundations of our business and we believe we are well placed to continue to deliver sustainable organic growth going forward.
A strong management team that knows what it is doing, high returns on capital employed, rising dividends, revenue and earnings – it’s a recipe for success.
Here’s to all the buy-and-holders who have the discipline to buy at the right price at the right time and then wait it out.