AGM and Interim Management Statement
13 January 2015
Carr's (CRM.L), the Agriculture, Food and Engineering Group, is issuing its first interim management statement for the year ending 29 August 2015 to coincide with its Annual General Meeting being held in Carlisle today at 11:30am.
This statement relates to the 19 week period which ended on 10 January 2015.
Carr's continues to trade in line with the Board's expectations for the full year.
The overall performance of the division is as forecast for the period. However, the UK performance has been impacted by the mild autumn, the slow start to the winter and a decline in farm incomes related to the fall in the farm gate milk price, which underlines why geographical and operational diversity are key to Carr's continued success.
Sales volumes of animal feed in the UK are comparable to the same period last year, while the cold weather in the northern USA in November and December, coupled with an increase in market share, has resulted in an overall increase in worldwide feed block sales volumes for the period.
The mild start to the UK winter has had an adverse impact on fuel sales in the period; however, the retail business performed well with sales ahead of the same period last year. The new Annan Country Store opened in September 2014 has been well received by both the farming and local communities.
AminoMax®, the patented rumen bypass protein for dairy cattle, continues to perform well in both the USA and the UK, with volumes up significantly on last year.
Investment in our facilities has continued and, in addition to enlarging a number of retail Country Stores, the AminoMax® manufacturing operation at Watertown, New York State is being expanded and is on track for completion in mid-spring, as planned. In addition, the redevelopment project at the manufacturing plant in Silver Springs, Nevada is progressing with completion expected summer 2015.
The Food division is trading ahead of last year's performance and is in line with expectations.
The Kirkcaldy mill is continuing to deliver the operational and commercial benefits that were demonstrated in the results for the year ended 30 August 2014. Flour sales volumes are higher than last year but, as a result of lower wheat prices, revenue is lower. The quality of flour, food safety and service levels are benefiting the business. Against a backdrop of ongoing volatility in wheat markets, Carr's continues to benefit from long-term established relationships with our customers, and remains positive about the performance of the division for the remainder of the financial year.
Overall, the Engineering division is performing in line with expectations. MSM has had a strong start to the year, having won a new contract for the production of a significant number of master slave manipulators for installation in Sellafield, with delivery due in 2016. Bendalls continues to work to near capacity delivering the large contract for the supply of 33 pressure vessels for the BP Shah Deniz gas pipeline in Azerbaijan, scheduled to complete towards the end of this financial year. While the falling oil price could cause a reduction in activity in the oil sector, it is expected that there will continue to be an increase in activity within the UK nuclear industry, which will benefit the Engineering division.
In December 2014, Wälischmiller completed a major contract which required innovative design and remote handling capabilities for a complex decommissioning project at a nuclear plant in France. Political sanctions on Russia are likely to impact the timing of the award of new contracts.
Chirton Engineering, our precision machining business, is integrated within the Group and is developing synergies with our other engineering businesses. A move to its new premises in spring 2015 will provide an enhanced production facility, increased capacity and an improved working environment.
The Group's financial position remains strong. Net debt as at 29 November 2014 was £30.4m, compared to £24.6m as at 30 August 2014 and £28.2m in the prior year. The cash outflow since the year end is due to the seasonal working capital increases in the agriculture businesses.
Undrawn banking facilities at 29 November 2014 amounted to £17.7m.
Subject to shareholder approval at today's AGM, the proposed dividend of 17.0 pence per share will be paid on 16 January 2015 to shareholders on the register at close of business on 19 December 2014.
Tim Davies, Chief Executive, commented:
"We are encouraged by Carr's performance to date in the current financial year. Whilst the sectors in which Carr's operates are experiencing challenging times due to a variety of external factors, the Group's geographical spread, investment in assets, and on-going commitment to innovation continue to support the Group's development. We remain confident in the long term success of the Group and the Board's expectations for the full year remain unchanged."
The company expects to issue its Interim Results for the 26 week period ending 28 February 2015 on 13 April 2015.
|Carr's Group plc
Tim Davies (Chief Executive Officer)
Neil Austin (Group Finance Director)
|Tel: +44 (0) 1228 554 600
|Tel: +44 (0) 20 7250 1446
About Carr's Milling:
Carr's Milling Industries (CRM.L) is an international leader in the provision of essential industrial services focused on the Agriculture, Food and Engineering sectors. The Group offers a range of services including the manufacturing and supply of flour, remote handling equipment, farm machinery, feed blocks for livestock, and a UK network of rural stores, with a facility footprint spanning the UK, Europe and North America, supplying 31 countries around the world. The Group is listed on the London Stock Exchange. www.carrsgroup.com