Good morning, everybody, and welcome to our financial year 2025 interim results presentation. If I may direct you, first of all, to page two on the agenda. I will comment on the progress we've made during the first half of the financial year. Mark will then run through the numbers, and Jim, as usual, will update on the commercial strategy and the progress thereof. Before I hand it back to myself, an update on strategy and operational performance, and then we will open up to Q&A. Before we start turning the pages on the slide deck, I just want to recap on what has been an extremely strong first half for the business and briefly update you on several topics that are frequently coming up in our meetings with shareholders, analysts, and other stakeholders.
Our financial performance has been strong, and we've made further progress in delivering on our strategy. I would particularly like to highlight our continued rapid growth in the poultry sector. Later in the presentation, I will talk you through our newly committed expansion project to increase fresh poultry volumes processed through our existing Eye facility. However, in terms of a larger expansion, planning still remains a challenge. If we wish to grow our poultry business in East Anglia, we need more than just the warm words we've heard from government prior to their election. We are yet to see any evidence of real change to the bureaucratic and overly complex planning application process, and we need this both simplifying and streamlining. The impact of the government's budget creates yet another unhelpful inflationary headwind that we will now need to manage.
We've done this, as you will recall, through many recent years with great success, and we will be looking to mitigate the impact through efficiency measures and optimal capacity utilization. The combined impact of the increased national insurance contributions and the further increase to the national living wage was not expected. The time now available to put in place mitigating actions is somewhat limited. Ultimately, we do expect cost increases will have to be passed on to customers to some extent, and Jim will talk about this more later on. On a more positive note, we are seeing improved engagement from the government in relation to discussions with China and the reinstatement of our Norfolk site export license. You will recall that we voluntarily suspended our export license in October 2020 following advice received from DEFRA at that time.
Finally, before we turn the pages on the presentation, I would remind you all that the competitive landscape remains tough. We operate within arguably the world's most competitive food retailing sector. Our competitor set in both pork and poultry is well consolidated and ambitious to grow and gain market share. Despite these challenges, we continue to win and grow in all these categories: both pork, poultry, Mediterranean, and our pet food operations. We continue to invest at pace in our asset base with a focus on the long term, delivering industry-leading levels of service, quality, and innovation to our customers. Now, if I may direct your attention, please, to page four of the slide deck, we've made substantial progress in delivering on our strategy in the first half of this financial year.
We've delivered strong revenue growth of over 6%, reflecting volume growth across our UK food and pet food businesses. Our poultry revenues increased by 16.4% and now represent almost 20% of group sales. Operating margin increased to 7.5%. This demonstrates the impact of delivering our vertical integration strategy in pig farming and feed milling, where our pig production has increased by 18% year on year. Investment across our asset base has continued at pace, with GBP 48 million deployed in the first half of the year. As I mentioned a moment ago, we are today announcing a new commitment to expand our processing capacity and the associated supply chain for our Eye facility based down in Suffolk. Combined with the ongoing projects at our value-added poultry sites in Hull, we now have GBP 47 million worth of investment in progress across our poultry divisions.
We'll go into more detail on the impact of these projects later in the presentation. On page five, the financial metrics on this page demonstrate that we have delivered another record performance in the half and that we continue to deliver our ambitious growth plans with discipline. I've already highlighted the strong volume-led revenue growth and improved operating margins. The adjusted earnings per share was 17.7% ahead of the same period last year, and our cash generation has been extremely strong. Our leverage remains extremely low, and our return on capital employed has improved to 18.7% as we continue to effectively deploy capital at pace. We are also increasing our interim dividend by just over 10% to 25 pence per share. On page six, and before I move on to Mark's presentation, these record results have been delivered by the exceptional people that we are working with.
I always say that we've got a monopoly on the best people in the industry. The quality, the strength of character, and the capability of our teams is what enables Cranswick to keep delivering, and I thank them all for their continued commitment. It is a major focus of mine to maintain our culture of autonomy and empowerment, together with our focus on people development throughout the business. As our workforce exceeds 15,000 people, it is these key strengths that enable us to engage with, attract, and retain industry-leading talent. Building on this area of our competitive advantage will support Cranswick's success for the long term. I'll now hand over to Mark to cover the first half of the financials.
Thanks, Adam, and good morning, everyone. I'm delighted to once again be presenting another strong set of half-year results. I will take you through our financial performance before handing over to Jim, who will provide more commercial and market context to the numbers. Now, turning to page eight of the slide deck and recapping on Adam's comments, we've made strong progress in delivering our strategy, and the financial highlights on this page show that we have delivered a record first half with a strong performance across all metrics. Year on year, revenue is at 6.1%, adjusted PBT is 17.4% higher, and EPS and DPS are 17.7% and 10.1% higher, respectively. Our cash conversion has also been excellent, with our free cash flow increasing by 34.6% and our net debt, excluding IFRS 16 lease liabilities, falling to just GBP 0.9 million.
Now, looking at the numbers in a little bit more detail on page nine, I'll quickly run through the headline numbers before looking at each in turn in more detail on the following pages. Reported revenue was up 6.1% to £1,329.9 million, with like-for-like revenue growth a touch lower at 5.8%, reflecting the pass-through our models of a lower pig price. Adjusted gross margin was 121 basis points higher at 15.3%. Adjusted operating profit increased by 16.5% to £99.6 million, and operating margin at 7.5% was 67 basis points higher. Adjusted profit before tax at £95.8 million was 17.4% ahead, with the effective tax rate at 26.2% compared to 26.1% in the previous half year, and consequently, adjusted EPS increased by 17.7% to 132.1 pence, reflecting the growth in that adjusted profit before tax figure.
As Adam mentioned, we are proposing to increase the interim dividend by 2.3 pence or 10.1% to 25 pence per share, up from 22.7 pence per share last year. And this leaves us well placed to extend to 35 years our sequence of unbroken dividend growth. Return on capital employed is also extremely strong, increasing by 234 basis points to 18.7% compared to 16.4% in H1 last year. The increase in return on capital employed reflects our ability to deploy capital at pace to drive strong returns, and we have a strong pipeline of strategic projects ongoing that I will discuss in more detail later in the presentation. Now, turning on to page ten and looking at revenue in more detail, we've delivered a strong volume-led revenue growth of 6.1%. Volumes were ahead by 7.3%, with the strong momentum generated in quarter one continuing through quarter two.
As this revenue bridge shows, we've seen underlying market growth in our categories supported by strong promotional activity from our retail customers and increasing demand for premium categories. Our core pork and poultry product ranges are well aligned with current consumer preferences driven by the quality, convenience, versatility, and value of our products. Jim will come on to cover specific category performance in more detail later. We've also delivered growth ahead of the market, with market share gains a key driver of revenue growth in the period. This demonstrates that our strategy and focus on our key strengths, including maintaining our industry-leading asset infrastructure, product quality, and unrivaled service levels, continues to drive excellent results. Our further progress in fresh and added value poultry has been strong, with revenues up by 16.4% and with poultry revenue now accounting for 19.5% of total group sales.
We also delivered strong growth in pet food, with revenues up by 71.1%, reflecting the successful ongoing rollout of the Pets at Home contracts. The net impact of price mix reflects a marginal easing of input costs being passed through to our customers. Now, turning to slide 11 and looking at margin in more detail, compared to H1 FY24, we've seen another step up in gross margin, and this has continued to drop through to operating margin. Year on year, operating margin was 67 basis points higher at 7.5%. As this slide demonstrates, we've now delivered five consecutive halves of improvement in operating margin. We have delivered this through the continued successful integration and expansion of our pig farming supply chains, together with closer alignment to our key customers, delivery of strong volume growth with excellent capacity utilization, and continued focus on tight cost control across the business.
Moving on to page 12 and looking at cash flow now, strong free cash flow of GBP 105.4 million, with free cash conversion of 110.9%, is a great result and demonstrates the quality and discipline with which we continue to deliver growth ahead of our medium-term target. Our strong free cash generation enables ongoing reinvestment across our industry-leading asset base and continuation of our progressive dividend policy whilst maintaining a strong balance sheet. Net debt, excluding IFRS 16 lease liabilities, was just GBP 0.9 million versus GBP 51 million at September 2023. Expansion in lease liabilities to GBP 106.6 million versus GBP 90.9 million as of September 2023 reflects growth in our agricultural operations and the prevalence of leased farm sites, particularly in poultry. On a reported basis, net debt increased by GBP 8.1 million to GBP 107.5 million from GBP 99.4 million at 30 March 2024.
Looking at more detail in the building blocks, as you can see, there was strong EBITDA-related inflow of GBP 142.4 million. Working capital outflow, including biological assets, was GBP 18.7 million in the period. As usual for our interim results, this outflow reflected the strategic inventory build ahead of Christmas. Tax paid in the period of GBP 20.6 million was GBP 2.3 million lower than the GBP 22.9 million paid in H1 last year. In H1 last year, there was a catch-up of GBP 5.1 million relating to previous year's estimates. Interest paid was just GBP 1.2 million, which was GBP 0.8 million lower than H1 last year. As I've already mentioned, net capital expenditure was GBP 46.7 million in the period, and I'll provide more detail on our strategic investment plans later. Dividends paid in the half totaled GBP 36.4 million up on H1 last year, reflecting the increase in the FY24 final dividend.
Now, turning on to slide 13, and you've seen this slide before, I'd like to share this because it just shows how consistently strong our free cash generation track record has been. Over the last seven and a half years, we've generated over GBP 1.1 billion of free cash flow. Over this period, we spent well over GBP 600 million on CapEx, GBP 177 million on complementary M&A, and we've returned almost GBP 240 million to shareholders by way of dividend. In terms of our banking facility, we have a GBP 250 million sustainability-linked facility which extends through to November 2026. We have the option to access a further GBP 50 million on the same terms, with the facility providing generous headroom to continue delivering our growth strategy. I mentioned I was going to talk about CapEx in a little bit more detail, and you can see this on slide 14.
We've invested a further GBP 47.7 million across our asset base to support the further growth and drive operating efficiencies, and we've made good progress on the three capacity-enhancing projects with GBP 20 million spent in the first half. These projects include the ongoing GBP 25 million fit-out of the Worsley hummus facility, where production of Ramona's hummus and dips range has now been successfully transferred, with more capacity set to come on stream later in the year, providing more headroom for growth. The GBP 62 million multi-phased investment program at our pork primary processing facility is progressing as planned, as is the GBP 27 million expansion of the two added value whole poultry sites on track to start onboarding a large new retail contract towards the end of Q4.
Adam will talk you through this in more detail shortly, but we have now committed to a further £20 million investment project to add significant processing capacity at our existing fresh poultry site and increase incubator capacity at our Kenninghall site. In total, we now have £47 million in investment ongoing across our added value and fresh poultry operations that will drive further growth in poultry. Investment in automation projects and in our agricultural supply chain also continues at pace across the business, driving improvements in efficiencies and farm productivity whilst creating further capacity for future growth. And I'm reconfirming FY25 CapEx guidance of circa £100 million, although given how many growth projects are now in the pipeline, I do see some upside risk to this guidance.
To summarize before handing over to Jim, we've delivered a strong revenue growth of 6.1% underpinned by 7.3% volume growth, adjusted profit before tax increased by 17.4%, and adjusted earnings per share by 17.7%. Increased operating margin reflects a strong contribution from our growing pig farming operations, excellent capacity utilization, and tight cost control. Our strong free cash generation track record continues, and our balance sheet remains in very robust shape. We have a strong pipeline of earnings-enhancing investment projects and have delivered a return on capital employed of 18.7% in the first half. Finally, we are increasing our interim dividend by 10.1%. I'll now hand over to Jim, who will update you on our commercial progress.
Thank you, Mark, and good morning, all. I'm going to keep it fairly brief for the half year, but in the usual format, I'll cover off the retail and out-of-home consumption trends, inflation, and the impact on our operational costs and Cranswick's performance in the commercial outlook. So initially, if I can draw your attention to page 16, you will see, and also well documented elsewhere, that the total fresh and chilled market grew by 4.1%. We still have some inflation in the system, but reflecting volume growth underlying of 2.3%. In fact, October trading saw the highest level of retail sales since the panic buying of the pandemic. Tesco and Sainsbury's are continuing to perform well, driving the largest cash growth in Tesco and fresh and chilled, with Tesco up 6.2% and Sainsbury's respectively up 8.1%.
They've delivered value for consumers through their Aldi price match schemes and strong promotions delivered with either Clubcard or Nectar deals, reducing essentially consumers' drive to move their sales to the discounters. At the same time, though, they've offered more choice, quality, and innovation and have driven the premium brands extremely well with a differentiator offer within the Finest and Taste the Difference brands. M&S continues its growth trajectory with simply excellent store execution and customer experience and also market-leading quality and innovation. They've also, in a similar way to Tesco and Sainsbury's, managed to broaden their appeal with keener prices on the staples, or as they call it, the spine of the basket, allowing them to take a bigger share of consumer spend. The discounters continue to make progress, but this is now all driven by Lidl, with Aldi now actually falling behind the market in terms of growth.
It's actually worthy of a mention here as well that Lidl's trading intensity per square foot or per store remains below that of Aldi, leaving them with some latent growth potential on a store-by-store basis. Moving on to the out-of-home market, and this is a segment that is still struggling. It's been disproportionately affected by inflation in the key raw materials, then labor, energy, and at a time, of course, when consumers have been cash constrained. The latest announcements on rates and National Insurance and National Living Wage aren't going to help either. This trend has actually been exacerbated further with the retail trade's expansion of premium ranges and dining offers, locking that consumption into the home market.
So if I can move you over onto page 17 and just looking at some of the key commodities, particularly on wheat and soya, which are the principal input costs of pig and chicken production, you'll see here that both commodities have settled considerably and are now actually trending downwards. Chicken pricing is generally directly linked to these commodity prices through trackers and open book models, whereas within pig meat, there is actually a mixture of cost of production and traditional supply and demand SPP-related contracts, or indeed even contracts with a blend of the two mechanisms. So with regards to pig pricing, you'll see that the pig price is trending downwards, yet at a slower rate than the commodities. This increases the profitability on farms. You'll also note an expanding gap between the U.K. and E.U. pricing.
Throughout the period, retail prices have increased across the core proteins, but far less on pork and chicken. They're already the most affordable proteins, and they're actually increasing their relative affordability, thus supporting demand. On the other hand, we are going to see significant headwinds in both the manufacturing and retail sectors through the change in the threshold of National Insurance, the rates of employers' National Insurance, and also a significant rise in the National Living Wage. So moving over onto page 18, and you'll see generally a very good set of results across all our categories, with sales up 6.1% and strong overall volume growth of 7.3% delivered. In fresh pork, retail volumes have been strong, and despite a relatively tight pig supply pool, we've actually managed to increase the number of pigs we've processed across the three primary processing sites.
The convenience market has been a bit trickier, with lower demand and poorer weather impacting cooked and cured meat sales at market level in the summer, and inflation driven by a poor harvest in the olives and antipasti market further weighing on volumes. Despite all this, we have actually gained share overall and managed to keep value in growth. The slow cook and sous vide ranges also continue to grow, as this supports that in-home dining occasion that I mentioned earlier. Gourmet business has done extremely well. Sausage volume is well up on the previous year, with our premium volumes growing well ahead of the average. In gourmet bacon, similar trend continues, and also a major category relaunch with our largest customer, helping volumes there.
We've gained additional share of volume with the U.K.'s largest QSR operator later in the period, as well as continuing to grow sales in the retail space at the cooked bacon and sausage facility. And the pastry business also has done very well, with excellent new products over the summer and a major gastro launch with Tom Kerridge early in the autumn. Poultry has performed exceptionally strongly, with a record number of birds processed on the fresh side. Strong retail sales, as we've taken a larger share of our key customers' volume, as well as a return to growth of that said retailer. The value-added poultry business has also done well, with a key business win during the period in both our cooked, ready-to-eat chicken, and breaded categories. These, both with the U.K.'s largest retailer.
This has served to drive our value position ahead of volume, with growth coming from these value-added categories. In pet, we've grown volumes extremely well on the back of our partnership with Pets at Home. Not only have volumes grown nearly 48%, but you can see the quality of sales coming through with our value sales up by 70%. Moving on to revenue by channels, and you can see very much in line with those market conditions, retail has been our strongest growth area, up 9% year on year. Despite the market headwinds, we've actually still managed to grow our food service business. Export remains challenging, but still represents a very important part of the value chains. Volumes actually have still increased by about 7.5% due to that increased kill I mentioned earlier.
So finally, if I move you over onto page 19, with regards to the commercial outlook, we've seen a solid performance in our retail business, and we are confident that demand for our products will remain resilient. The fundamentals of this solid performance from the retailers, and most notably the point that Cranswick have a close strategic alignment to Tesco, Sainsbury's, M&S, and Lidl. Premium continues to grow, and again, has always been a key area of focus for Cranswick and an overtrade. Christmas 2024 looks pretty strong, with a long lead into the big day and very easy for shoppers to access products in the lead up to Christmas, and our order books looking pretty positive in terms of the pre-buys and things we are aware of.
Moving on to next year's commercial performance, and the key feature will, of course, be managing the labor on costs through the National Insurance and National Living Wage. In most cases, this will be delivered through our annual review, through our open book ways of working, somewhat offset by those falling base commodities as well that I mentioned earlier that will also be reflecting any pricing reviews there. We have also deepened our strategic relationship with our key customers, with more agricultural supply chains being aligned to specific customers and product ranges. For example, we are using bespoke genetics for improved eating quality for a premium range with a new breed of pig, with higher marbling, delivering on taste and tenderness, and initial results are showing a significant improvement in sales.
We've brought on new business throughout the year with new business wins, which will annualize into next year's full year outturn, as well as extending contracts with some of the group's largest customers. And moving on to market share gains, as well as developing the group into some new markets, the Ramona's brand, for example, has had a standout year with volume growth of around 80%. And this is now the largest hummus brand in terms of both value and volume. We've increased product ranges and distribution throughout the year, and the product is now being produced at the new Worsley site, which will be fully commissioned in Q4 with the arrival of yet more and larger equipment.
We have a major new contract on the way for our cooked and ready-to-eat chicken factory from the start of Q1 next year, which will be a step change in volume, and that is supported by further investment in capacity and capability, which completes early in calendar 2025. And finally, a new product range has just launched with Pets at Home, which will again help to maintain volume, momentum, and crystallize growth there into the new year. So on that note, I will now hand you back to Adam, who will cover off the further strategic progress of the group. Thank you.
Yeah, thank you, Jim. And if I just direct you please to page 21, and I'll just go into a bit more detail on the investments that we're making across the poultry operations and also the pig farming activities, and then wrapping it up and handing over to Q&A. Commenting in the second half of this year, we'll be investing a further GBP 20 million in total across our fresh poultry operations. GBP 7 million of this will be in incubator capacity at our Kenninghall site in East Anglia. This will reduce reliance on third parties and enable an increase in the birds being produced. It's also worth noting that the move to lower stocking densities across the poultry farms is progressing to plan, and we are maintaining our high welfare NestBorn on farm hatching system across all our farms. As you will recall, we are unique in producing our birds in this format. GBP 30 million of the GBP 20 million will be spent at the Eye site, adding an additional 15% to the processing capacity. We will deliver fresh poultry sales growth together with yield improvements, labor efficiencies, and further capacity optimization.
The GBP 27 million of investment across the breaded and ready-to-eat poultry sites is already in progress, and both projects are expected to be largely complete by the end of the current financial year. These projects will add additional cooking and cooling capacity and enable further range expansion, including full roasted birds and bone-in portions. As Jim called out earlier, these investments in added value poultry facilitate delivery of a significant new listing, with Marks & Spencer being the premium retailer in this case, and this is due to come on screen from the quarter four of this year. Combined, this GBP 47 million of investment will drive continued growth across the poultry product ranges, delivering the quality, convenience, and value that consumers look for in this premium category. Onto page 22, as we've mentioned, we continue to grow the pig farming and pig feed milling operations at pace.
Through acquisition and organic investment, we've increased our pig production by 18% year on year. We've increased the kill across our three primary processing sites by around 9%, while maintaining our self-sufficiency in pig production at over 50%. Following the Elsham Linc acquisition in August of last year, our pig feed milling operations have expanded significantly, and our self-sufficiency is now 19% up from 9%. What's interesting to note here, we are actually producing about 2,200 pigs a year more than we would have done on a like-for-like basis as an improvement from the productivity improvements that we've made across the year. Just 11 years ago, we weren't farming any pigs at all, and we now have the largest pig farming business in the UK, producing over 34,000 finished pigs per week, in addition to our substantial poultry farming activities. And this investment will continue.
Through this investment in the farming supply chains across both pork and poultry, we're driving significant margin progression, enabling improved animal welfare and strengthening relationships with our strategic customers. I see the expansion of the farming operations as being critical to our long-term growth plans. I expect there to be further sector consolidation going forward, potentially fueled even more by the impact of the recent budget. We'll continue to look at opportunities to grow the scale and quality of our agricultural supply chains. And on page 23, and in summary, and on the outlook, trading in the first half of the year has been strong. We've delivered volume-led growth and strengthened our operating margin. We now enter our key trading period at Christmas. We have substantial capital investment pipeline with returns enhancing projects across poultry, pork, Mediterranean foods, and farming operations.
And we will, of course, continue to deploy this capital at pace across the business. As I said before, the Christmas order book is strong, probably the strongest I've ever experienced. And demand for the products remains high as the consumer continues to appreciate the quality, the value, and the versatility of the core product ranges. We expect the outturn for the current financial year to be in line with the current market expectations. And once again, thank both colleagues and stakeholders for their continued support and commitment as we build towards what promises to be another busy festive period.