February 7, 2019 / 8:33 AM / 8 months ago

Cranswick shares plunge after warning of lower 2019 margin

FILE PHOTO: Dumidru Voicu nets meat at Cranswick Convenience Foods in Milton Keynes, Britain November 20, 2017. REUTERS/Darren Staples

(Reuters) - Shares in meat processor Cranswick Plc crashed 20 percent on Thursday after it warned that operating margin would fall next fiscal year and posted a 2 percent drop in its third-quarter revenue.

The company, which processes and supplies fresh pork, sausage, bacon and cooked meats, has been investing heavily to increase capacity and boost operating efficiency.

Operating margins for the next year will likely be hit by higher costs related to start-up and commissioning of a poultry processing facility in Eye, Suffolk, it said.

The company, which supplies UK retailers and food firms, also flagged a “challenging commercial landscape” although it said it had signed a long-term supply agreement with Wm Morrison Supermarkets Plc for the new facility.

Cranswick shares were down 19.9 percent at 2,374 pence at 0855 GMT.

Reporting by Adil Bhat in Bengaluru; Editing by Gopakumar Warrier and Arun Koyyur

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