Cranswick’s Pet Food Arm Set to Boost Earnings, Says Shore Capital

Cranswick’s (LON:CWK) pet food business is poised to deliver a more meaningful earnings contribution after a slow start, according to Shore Capital.

Cranswick is one of Shore Capital’s “House Stocks” (Shore Capital acts in an advisory capacity to the company).

The broker said that while Cranswick’s entry into the highly competitive U.K. pet food market “has not been a walk in the park,” it now expects the segment to be “anchored by building Pets at Home volume, augmented by wider, better margin business, and the contribution from ongoing investment.”

Cranswick entered the market in 2022 through the acquisition of Grove in Lincolnshire, a move Shore Capital described as “a modest step, risk-managed learning” compared with its decision not to acquire Inspired Pet Nutrition (IPN), which it said “dodged a bullet.”

Shore Capital noted that early challenges included lost co-packing business, but that the company has invested about £10–12 million in its Lodge Farm facility, with a further £14 million approved. 

The site now has “medium-to-long term visibility to build its kibble activities” with private-label production for Pets at Home at its core.

Although the pet category has accounted for just around 1% of Cranswick’s sales and has been “moderately loss-making” to date, Shore Capital said it expects this to change in the 2025–28 period as volumes rise and operations become more efficient.

“We sense that this is all about to change as increased volume on a more capital-intensive and so efficient operation comes through,” said Shore Capital.

“After a somewhat constrained start, Cranswick Pet is about to be unleashed,” the broker concluded.