Disposal of Food Division and Return of Capital

05 September 2016

Carr's, the Agriculture, Food and Engineering Group, announces the disposal of Carr's Flour Mills Ltd, its Food division, to Whitworths Holdings Limited ("Whitworths"), a leading flour milling business, for a gross consideration of £36.0m and net consideration of £24.9m after adjustments for working capital and net debt in the business at completion (the "Disposal").

The Disposal will support our ambition to achieve growth and development in line with the Group's strategic goal of being an international company at the forefront of innovation and technology across both of its remaining businesses of Agriculture and Engineering.


  • Disposal of Carr's Flour Mills Ltd to Whitworths Holdings Limited for a gross consideration of £36.0m; net proceeds received amount to £24.9m
  • Returning £16.0m to shareholders in the form of a Special Dividend of 17.54 pence per share
  • Remaining £8.9m provides balance sheet strength and the opportunity to expand the Group's continuing businesses, both by acquisition and organic growth
  • Ongoing focus of the business is on high value markets within Agriculture and Engineering

Tim Davies, Chief Executive of Carr's commented: "The sale of Carr's Flour Mills Ltd represents an exciting stage in Carr's strategic development. At a time of increasing competition and volatility in the flour market, consolidation is essential and inevitable. This acquisition by Whitworths presents a great opportunity for the Food division to continue building on the strong foundations laid over many years. On behalf of the Carr's Board, I would like to thank everyone who has contributed to the division's success. 

"We will continue to focus on our strategy of delivering growth in our UK agriculture business, the development of our international feed supplement businesses and building our specialist engineering division in niche markets across the globe. Carr's continues to benefit from both operational and geographic diversity and a strong balance sheet and we look forward to an exciting future focussed on delivering growth in our higher margin products and services within the Agriculture and Engineering divisions."

Martin George, Chairman of Whitworths Holdings Limited, commented: "The Whitworths Board is delighted with the announcement of the acquisition of Carr's Flour Mills Ltd from Carr's Group plc by Whitworths Holdings Limited on 3 September 2016.

"Carr's Flour Mills Ltd shares a similar history to Whitworths in that it is a long standing business which has received material investment in recent years. The business is a great fit geographically and will give us access to the South East, North of England and Scottish markets that would otherwise not be available and means we have national reach.

 "I would like to welcome the employees who join us from Carr's Flour Mills Ltd."

A conference call for analysts and investors will be held at 8.00am BST, today, 5 September 2016. For dial in details, please contact Powerscourt at [email protected].



Carr's Group plc
Tim Davies (Chief Executive)
Neil Austin (Group Finance Director)
Tel: +44 (0) 1228 554 600
Nick Dibden
Sophie Moate
Nick Brown
T: +44 (0) 20 7250 1446
E:[email protected]


About Carr's Group plc:

Carr's is an international leader in manufacturing value added products and solutions with market leading brands and robust market positions in the Agriculture and Engineering sectors. The Group offers a range of services including the manufacturing and supply of feed blocks for livestock, farm machinery, a UK network of rural stores and robotic and remote handling equipment, with a facility footprint spanning the UK, Europe and North America, supplying customers in 35 countries around the world.

For further information, please visits: www.carrsgroup.com 

About Whitworths Holdings Limited:

Whitworths is a 100% family owned business which includes the flour milling company of Whitworth Brothers Ltd.   Whitworth Brothers Ltd produce flour from four sites with food safety and brand protection at the heart of its culture.

For further information please visit our website:  www.whitworthbros.ltd.uk


Background and reasons for the Disposal

Following an approach from Whitworths to acquire Carr's Food division, the Board undertook a review of the Group's three divisions. In both the Agriculture and Engineering divisions, the Group is recognised as an international leader in manufacturing value added products and solutions with market leading brands and robust market positions. In order to drive future growth and accelerate the financial returns of the Group, it was decided that it was in the best interests of shareholders to proceed with the Disposal and the Group's focus and investment will now be centred on growing its Agriculture and Engineering divisions.

The combination of Carr's Food division with that of Whitworths will build on the progress and improved efficiencies made by Carr's following the investment in the mill at Kirkcaldy in 2013. This capital spend resulted in the mill operating at world class standards and with the highest quality of assets. Whitworths, with its now national footprint, will be extremely well placed to develop the business, building on this investment. Whitworths is committed to the future of the food business and will retain the mills and the heritage of flour milling created by Carr's.

Information on the disposed business

Carr's Food division is a leading supplier of quality flour to bakeries, food manufacturers and multiples across the UK. The division operates from three strategically-located sites at Silloth in Cumbria, at Kirkcaldy in Fife and at Maldon in Essex. In the year ended 29 August 2015, the division generated revenues of £80.3m and a profit before tax (PBT) of £2.4m (after £0.8m of central costs allocated to the Food division) representing approximately 19.5% of the total Group revenue and approximately 13.9% of the total Group PBT of Carr's in 2015.

Use of proceeds from the Disposal and future growth opportunities

The disposal of the Food division is for a gross consideration of £36.0m on a cash and debt free basis. The purchase price is subject to adjustment based on actual working capital at the date of sale compared to the agreed average working capital. Adjusting for the carrying value of net debt amounting to £7.9m and allowing for an estimated working capital adjustment of £3.2m, the Group will receive £24.9m in cash. The gross assets that are the subject of the Disposal, were £44.1m at 29 August 2015.

It is the Board's intention to return £16.0m to shareholders in the form of a Special Dividend (further details of which are set out below) while retaining the balance of £8.9m to strengthen the Group's balance sheet and to enable it to pursue opportunities to expand the Group in its ongoing divisions of Agriculture and Engineering, both by acquisition and by organic growth through investment.

Whilst the Disposal will result in a reduction to reported Group revenues and earnings in the year ending 2 September 2017 and beyond, the Board believes that taking into account the £16.0m being returned to shareholders and the potential investment in growth opportunities utilising the £8.9m cash retained from the Disposal, the transaction will contribute to an increase in shareholder value over the short to medium term.

Agriculture division

Over recent years the Group has invested in growing its international animal supplements business, in its current markets of the USA, UK and Europe and strengthening and expanding its brand proposition e.g. Crystalyx®, SmartLic®, Feed in a Drum® and Horslyx®.

The business continues to develop international opportunities in new markets for its world leading feedblock technology. Long term research and development over twenty years supports this ambition with further recent investment made in research and development projects in both New Zealand and South America. Both of these markets are prime targets for the international expansion of the Group's feedblock business.

Engineering division

The Engineering division is benefitting from the resurgence in nuclear decommissioning both in the UK and internationally. The budget for UK decommissioning is £3 billion per annum and both the remote handling and UK manufacturing businesses have secured contracts with Sellafield, including the ten year specialist vessels and tanks contract valued at up to £48 million recently won by the UK manufacturing business.

It is the Group's strategic objective to grow and develop the Engineering division both in international nuclear markets and adjacent high value engineering markets such as oil and gas, defence and aerospace.

Special Dividend

It is the Board's intention to return £16.0m of the proceeds from the Disposal to shareholders by means of a special dividend. The special dividend of 17.54p per share will be payable on 7 October 2016 to shareholders on the register at 16 September 2016.