Carr’s Group sees value in agriculture as it prepares for engineering division sale

Cumbrian agricultural and engineering business, Carr’s Group, has reported higher annual revenues, but a fall into pre-tax loss, in annual results for the year to August 31, 2024.

In April it announced it was exploring options for the sale of its engineering division and a future focus on agriculture, saying that continuing with two divisions is an inefficient operating model.

Today it confirmed that the sale process of the engineering division “is ongoing and progressing positively”.

Like for like (statutory and adjusted) figures for the year, including the engineering division, revealed revenues of £148m, up from £144.1m in the previous year.

However, the group made a £6.1m pre-tax loss, compared with a £1.5m pre-tax profit in 2023. This included £6m of restructuring costs and historical pension liabilities.

Net cash stood at £4.5m, up from £4.2m a year ago.

The full year dividend remains static at 5.2p per share.

Annual figures with the engineering division stripped out reveal turnover of £75.7m, down from £81.8m the year before, and a pre-tax loss of £6.5m, against an £800,000 pre-tax profit.

In future, the group said it will manufacture and sell research-proven supplements for extensive grazing markets globally and deliver future value through improving operating margins through existing operations, delivering profitable growth in a core existing business and expand into new and growing extensive grazing markets.

It said a gradual recovery from economic and climatic factors is evident in its existing core markets. In the UK volume increased progressively to 12% growth from FY23 as input prices fell from recent highs, while in the US it has experienced gradually improving conditions, particularly in northern states. It said positive momentum has continued into FY25.

Looking ahead, the group said the immediate prospects for the agriculture division have been enhanced by the arrival of a new leadership team and remedial actions taken on under-performing businesses during FY24.

The long term outlook for the division remains attractive with a focus now on its range of existing products, further development of that portfolio and entrance into new geographies. Any benefit from reduced drought areas and the US beef cycle turning will further complement these opportunities.

It said management is confident that the sale of the engineering division will drive optimal shareholder value and expects strong trading in recent years to continue up to sale completion.

Chief executive, David White, said: “I am confident that the transformative changes initiated during the year, including the process to realise value for the engineering division and the refreshed agriculture strategy, will deliver value for shareholders in both the immediate and long term.

“Our focus is now on our core agriculture businesses, where our product portfolio provides a foundation from which to grow our share in existing and new markets.”

Non-executive chairman, Tim Jones, said: “With the process to realise value for the engineering division proceeding well, the group remains committed to optimising value for our shareholders in the short and longer term.

“We are now fully focused on leveraging our market-leading products, increasing efficiencies across our operations, advancing our positive impact on the environment and delivering exceptional value to our customers across the agriculture division.”