Carr's Group PLC - Trading Update

Agriculture

 

In UK Agriculture, the unseasonably mild and dry weather persisted through to the end of April, which reduced demand for feed and fuel. However, the impact of this on the business has been partially offset by high levels of farm activity due to good growing conditions, together with ongoing cost management activities, good procurement, and strong positions on raw materials.  Volumes in our new low moisture feed block plant in Shelbyville, Tennessee, continued to grow as we expand our geographic reach across eastern and south eastern states of the USA.

 

The integration of Animax, our manufacturer of market-leading trace element supplements for livestock, which was acquired by the Group in September 2018, continues to make good progress. Additionally, in July 2019 we acquired Cumbria based Paul Chuter Agricultural Services Ltd, a regional supplier of all-terrain vehicles, which has increased the range of specialist machinery available to our core farming customers. The business has been integrated into our country store at Cockermouth, Cumbria, to maximise footfall and levels of customer service.

 

Engineering

 

The Engineering business has continued to develop in the period, particularly in UK Manufacturing where order books have strengthened. Order books in Remote Handling are lower, as previously reported, but the level of global opportunities, particularly in Europe and Japan, is increasing which provides confidence in the medium term. 

 

Our USA Engineering business has a very strong order book position and opportunity pipeline following a number of contract wins previously announced. Work has now started on the development of our passive cooling technology following the award of funding from the US Department of Energy. This technology can be retrofitted to existing nuclear power plants in order to improve safety.

 

On 1 July we were pleased to announce the acquisition of NW Total Engineered Solutions Ltd.

 

Dividend

 

The Board announces that a second interim dividend of 1.125 pence per share (2018: 1.075 pence per share) will be paid on 4 October 2019 to shareholders on the register at close of business on 30 August 2019. The ex-dividend date will be 29 August 2019.

 

Outlook

 

As we have previously stated, significant uncertainty remains associated with Brexit and the UK's future relationship with the EU, and we continue to closely monitor the position. Our diversified Agriculture business and international footprint provide some protection from the impact of an adverse outcome to Brexit negotiations.

 

In Engineering, order books continue to strengthen across the business, which provides increased confidence in the medium term. The progress made by our Remote Handling business in the USA represents a significant development for the Group and brings further opportunities to the division. The Board is also greatly encouraged by the acquisition of NW Total and the enhanced range of specialist services it will bring to the Group, in particular across nuclear markets.

 

The Board continues to expect trading for the current full year to be in line with its expectations.

 

Tim Davies, Chief Executive, commented:

 

"We are pleased to report that the Group continues to trade in line with the Board's expectations for the full year, despite being impacted in the short-term by challenging weather conditions. We've made notable progress with the integration of Animax, as we expand international sales and invest in new product development. Brexit uncertainty remains a concern and we continue to closely monitor developments.

 

Our Engineering business continues to perform well, with a strong order book and further international growth. Earlier this month we announced the acquisition of NW Total, which enhances the range of specialist products and technical services we offer, particularly in nuclear markets.

 

As we continue to invest in our businesses, both organically and through strategic acquisitions, and expand our international footprint, we remain confident the Group is well positioned for sustained growth."

 

The Company expects to issue its preliminary results for the year ending 31 August 2019 on Monday 11 November 2019.