Flooding fails to deter bullish Carr’s

Agricultural, food and engineering company Carr’s Group has revealed that it is in line to meet expectations for its complete financial year, despite disruption from the recent UK floods. 

In a trading statement, released on Tuesday 5 January 2016, Carr’s admitted that the agricultural division of the company had been directly hit by the floods, with one of its three feed mills affected. In the face of this setback, the group said the commitment of the employees enabled the plant to become partially operational after one week.

According to the statement, many of the company’s customers in the rural and agricultural sector were directly affected by the floods. However, it added: “Carr’s has worked with those affected to assist where possible and ensure that needs were met. Appropriate insurance covers are in place, mitigating any notable financial impact.”

Although the company has been impacted by the elements, chief executive Tim Davies said the group remained positive: “Cumbria, in particular, has faced enormous challenges as a result of the flooding following Storm Desmond. Despite the direct impact of the floods on some of our employees, customers and suppliers, the direct financial impact of the group is covered by insurance. The speed of our recovery owes much to the resilience and tenacity of our employees.”

Animal feed compound volumes are up on the previous year, although margins are under pressure, while the reduction in farm incomes has had an impact on sales of machinery.

Meanwhile, a warm autumn and the winter weather have had a negative affect on feed block sales. Juxtaposing this, the report claimed that the recovery of cattle numbers in America has meant the US has performed well in respect to block feed sales. It stated: “Despite the various challenges, including continued depressed livestock and farmgate milk prices being received by our UK farming customers, the overall performance of the division continues to be in line with expectations.”

Following the recent acquisition of Green (Agriculture) Co and Reid & Robertson, the retail section of the business has started the year on a positive note.

The food division is also trading in line with expectations, while the engineering sector has had a slower-than-expected start. However, the group predicted that the latter division will still trade in line with expectations.

The trading statement said the group’s financial position remained strong with net debt at £31.9 million at 28 November 2015. This compared to £30.4m at 29 November 2014 and £24.4m as at 28 August 2015.

Subject to shareholder approval, the proposed final dividend of 1.85 pence per share will be paid on Friday 15 January 2016 to shareholders who were on the register at close of business on 18 December 2015.

“As highlighted in our November results last year, we face a number of headwinds in the markets in which we operate,” continued Davies.

“However, our geographic diversity, investment across our asset base, together with the acquisitions we have made, will continue to set us apart and ensure the group remains in a robust position over the medium to long term. Additionally, our strong balance sheet ensures we remain in a good position to take advantage of any potential acquisition opportunities.

“The company expects to issue its interim results for the 26-week period ending 27 February 2016 on 11 April 2016.”

The above information relates to the 18-week period ending 2 January 2016.

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