Carr’s sells flour mills for £36m

CARR’S, the listed Cumbrian agriculture, food and engineering group, has sold its food division for £36m.

It has sold Carr’s Flour Mills to flour milling business Whitworths Holdings, based in Northamptonshire, for £36m gross, or £24.9m after adjustments for working capital and net debt.

Carr’s is based in Carlisle, which bore the brunt of the ferocious floods caused by Storm Desmond at the end of last year. Trade in the food division was hit as a major flour customer of its Cumbrian flour mill was flooded.

The company, which will return £16m to shareholders through a special dividend of 17.54p a share, said the remaining £8.9m from the disposal will provide balance sheet strength.

It will also use the cash to focus on the growth and international development of its remaining  agriculture and engineering businesses – with acquisitions a future possibility.

Tim Davies, chief executive of Carr’s said: “The sale of Carr’s Flour Mills Ltd represents an exciting stage in Carr’s strategic development.  

“At a time of increasing competition and volatility in the flour market, consolidation is essential and inevitable.  

“This acquisition by Whitworths presents a great opportunity for the food division to continue building on the strong foundations laid over many years.”

Davies added that the company will continue to focus on delivering growth in the UK agriculture business, the development of its international feed supplement businesses and on building its specialist engineering division in niche markets across the globe.

“Carr’s continues to benefit from both operational and geographic diversity and a strong balance sheet and we look forward to an exciting future focussed on delivering growth in our higher margin products and services within the Agriculture and Engineering divisions,” he said.

Hill Dickinson, led by Matt Noon and Jonathan Brown, provided legal advice to Carr’s on the disposal.