City round-up: Carr’s Group; GB Group

Cumbrian agricultural and engineering business, Carr’s Group, has seen turnover and adjusted pre-tax profits increase for the year ended September 3, 2022.

The group issued an unaudited trading update this morning which it said focused on continuing operations in Speciality Agriculture and Engineering, following the disposal of the Agricultural Supplies division after the year end. The Agricultural Supplies division has been classified as a discontinued operation.

Total revenues were 3.3% ahead at £124.2m while adjusted profit before tax of £11.2m was an eight per cent improvement. The statutory pre-tax profit was £7.6m, compared with £7.5m the previous year.

On completion of the audit, the board intends to propose a final dividend of 2.85p per share which, together with the two interim dividends, would make a total dividend of 5.20p per share for the full year, up four per cent on the prior year.

The group issued a current year outlook, which revealed that trading in the early part of the current financial year was strong, but became more challenging in November and December 2022, with lower volumes of feed blocks sold in both the USA and UK markets and very competitive pricing for tenders in the Engineering division.

At this stage of the year, it said the board remains of the view that trading for the full year will be in line with its expectations and will provide a further update at the half year.

The group also confirmed previously announced board changes includingTim Jones joining as non-executive chair, Peter Page becomes chief executive and relinquishes the role of executive chair, David White joins the board as chief financial officer, and Neil Austin stands down as chief financial officer and from the board. The group also announces that Martin Rowland will join the board as a non-executive director, effective March 6, 2023.

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GB Group chief executive Chris Clark

Chester-based identity verification specialist, GB Group, outlined macroeconomic challenges in a trading update issued today.

At its interim results in late November 2022, it reported on the trends that had been impacting its end markets for identity services, most notably the challenging conditions for cryptocurrency and its internet economy customers.

These challenging conditions have continued into the second half of the year and given the relative concentration of these customers in the North America business this is the region where GBG is seeing the most pronounced impact. It has also seen some incremental lengthening of sales cycles, also in North America, as a result of the macro-economic uncertainty and this has delayed some expected customer contracts.

As a result, the board now expects GBG to report revenue for the year ending 31 March 2023 of approximately £279m (FY22: pro forma revenue of £273.8m).

Excluding £4.2m revenue from US stimulus customers in the comparative period, the full effect (c. £15m) of the year-on-year decline in revenues from cryptocurrency customers and the FY23 impact of the deferred revenue haircut (£1.2m), this would equate to organic pro forma constant currency growth of approximately four per cent for the financial year, almost evenly split between the first half and second half of the year.

Adjusted operating profit is anticipated to be approximately £60m, representing a margin of 21.5%. Gains on foreign exchange included within adjusted operating profit are expected to be approximately £3m.

The group said: “As we approach our new financial year and as we move through these headwinds, the board’s current expectation is that organic constant currency revenue growth is likely to improve gradually through the period from current levels towards high single-digits in the latter part of the year.

“Strong control of cost is anticipated to sustain FY24 adjusted operating profit margins at around current levels, without compromising ongoing investment in the business which will support achieving our medium term guidance for growth and profitability.”

Chief executive, Chris Clark, said: “The difficult macroeconomic environment has been well publicised and it is disappointing to have seen the impact on certain parts of our business. However, GBG continues to achieve growth and maintain strong operating margins and cash generation. GBG’s services remain crucial for customers to operate safely and efficiently in an ever more digital world and the board remains confident in the long term opportunities.”

GBG will publish a full year pre-close trading statement in April 2023.