Agriculture group braced for full-year hit from contract delay and US cattle price slump
Cumbria-based agricultural and engineering group Carr’s has enjoyed 15.3% hike in half-year revenue to £176.8m, but a delay in a manufacturing contract and falling cattle prices in the US are likely to affect its full-year performance.
Interim results for the six months ended March 4 show a “robust half-year performance”, with the medium term outlook remaining positive, the Carlisle company said.
Pre-tax profits have risen 4.8% to £8.9m. However, after exceptional items they are down 2.6% to £8.3m.
Carr’s reported a strong showing in UK Agriculture, outperforming the market and continuing to grow market share with greater confidence in UK agriculture expected to continue into H2.
The company has also experience a rebound in UK machinery sales, which are up 43.4% on H1 2016, and retail business performed well, benefiting from store improvement programme.
Meanwhile there has been significant pressure from falling cattle prices impacting USA feed block sales and the full-year performance in engineering is likely to be impacted by a contract delay in its UK manufacturing division.
Its remote handling business is performing ahead of expectations and bolstered by a strong order book, demonstrating the potential in this market.
The integration of Carr’s STABER acquisition is progressing well, with plans to extend premises in Markdorf, Germany.
Chief executive Tim Davies said: “While still at an early stage, we are seeing initial signs of improving confidence among our core UK farming customers resulting in a strong first-half performance in our UK Agriculture business, which we expect to continue in the second half.
“However, our USA feed block business continues to be impacted by the fall in cattle prices.
“Our Engineering business has been affected by a delay to a significant UK Manufacturing contract, which will impact our full year performance, but we have a strong pipeline in UK manufacturing and our remote handling business is performing ahead of expectations.
“We remain committed to delivering organic revenue growth, supported by value enhancing acquisitions and, further to the trading update released on 30 March, the Board’s expectations for the full year remain unchanged.”
