Buying boom at Cranswick and Bloomsbury Publishing

Even as the FTSE 250 Index continues to set new records, Cranswick and Bloomsbury Publishing proved today that there's still plenty of room for upside surprises.

While Cranswick is a maker of sausages and Bloomsbury the publisher of a best-selling weight-loss book, the pair had plenty in common as market-beating results sent shares up 4% and 7% respectively to test multi-year highs.

Despite the latest rises, Investec Securities thinks there's more to come from both stocks and reiterated 'buy' recommendations in upbeat notes today.

Investec's Nicola Mallard said it had been "another superb year" for Cranswick, which reported results 2% ahead of expectations after pre-tax profits lifted 22.4% to £92.4 million and earnings per share rose 20% to 145p.

The full-year dividend increased by an impressive 21.8% to 53.7p for the East Yorkshire-based company's 28th consecutive year of growth. Cranswick, which sells its meat products under retailers' own labels including Sainsbury's Taste the Difference and Tesco Finest, racked up record sales of £1.5 billion.

Mallard doesn't expect such strong growth rates in the current financial year, particularly as the company has guided that performance will be second half weighted. There's also the prospect of capital expenditure remaining high as work starts on a new state-of-the-art poultry site in Suffolk.

Source: interactive investor            Past performance is not a guide to future performance

She said the group should remain in net cash, while pre-tax profits are forecast to rise 5% to £95 million. Her unchanged price target of 3640p is based on a projected 2019 price earnings (PE) multiple of 20.6x, with dividend yield of 1.8%.

The full-year figures at Bloomsbury were just as impressive after pre-tax profits rose by 10% to above market expectations at £13.2 million for the year to February 28.

Consumer revenues rose 20% as the 20th anniversary year for Harry Potter was marked with new editions including an illustrated version of The Prisoner of Azkaban.

But the stand-out performer for Bloomsbury was Tom Kerridge's Lose Weight for Good, which sold the most copies in a week in January since records began.

The Bigger Bloomsbury strategy is expected to drive further growth in the next couple of years as the company focuses on a number of key drivers, such as improving profit margins in its academic titles division.

Shares are now above 200p for the first time since 2007, although Investec's Steve Liechti thinks they still remain attractive based on a 2018 calendar year PE multiple of 14.4x.

He raised his price target from 215p to 240p and lifted his 2019 EPS forecast by 5% to 14.5p. The projected dividend yield is 3.8%, after this year's dividend was increased by 12% to 7.51p a share.

Source: interactive investor        Past performance is not a guide to future performance

Bloomsbury CEO Nigel Newton said the company was now in a "very strong and exciting position" following progress across consumer and non-consumer books.

He added: "Bigger Bloomsbury marks the next exciting step in our growth."