Farmers’ demand for feed and fuel boosts Carr’s
CARR’S, the agriculture, food and engineering group, said that the strong growth experienced last year had continued in the first quarter of its new financial year.
The firm announced ahead of its annual meeting today that trading in the 18 weeks to January 1 was ahead of expectations, with its agricultural business putting in a particularly strong performance.
The Carlisle-based business said that its UK feed block business, Caltech, benefited from the launch of its Crystalyx brand in New Zealand and the integration of the Scotmin business acquired in June 2010.
Feed sales also benefited from greater market penetration in Europe – particularly France – and from weather conditions as snow-covered ground made grazing for cattle implausible.
Moreover, the company said that its acquisition of the AC Burn business in June 2010 and Forsyths of Wooler in September 2010 contributed to progress from its retail business in the North of England and Scotland, where it now operates from 19 stores.
The weather also contributed towards higher sales in its fuels business, where sales were “well ahead” of expectations. A new Lancaster depot which opened in September and a number of account wins also contributed to a period of record sales for the division.
Meanwhile, demand for fertiliser remained strong as a result of higher cereal prices.
However, the company also said that the food market remains challenging due to overcapacity in the UK flour market and higher wheat prices.
Its engineering division has also improved profitability, largely as a result of a stronger performance from its specialist steel fabrication business, Bendalls.
The firm’s net debt to November 27 was £32.8m, compared with £25.2m a year earlier. However, the company said that this was due to the fact that it had higher stock levels in order to meet demand.
“The working capital need was further increased as the result of a rise in the price of fertiliser raw materials and wheat costs in the food division doubling since June 2010,” it said.
At today’s meeting, shareholders are being asked to approve a final dividend of 12p per share, which will take total dividends paid out for the year to 24p – an increase of 4.3% on last year.
