Carr's Group profits tumble as agriculture woes persist
Updated : 09:22
Shares in Carr's gained on Thursday after the agriculture and engineering group maintained its dividend and reported a record engineering order book despite full-year profits dropping by a third.
The company reported an adjusted pre-tax profit of just £7.5m for the year to 2 September, down 33.2% on the previous year.
In August, the company pointed to full-year adjusted profits of £8m, down from earlier guidance of £10m, owing the struggles in the specialty agriculture arm. The profit warning came as chief executive Peter Page stood down, who has now been replaced by chief financial officer David White.
Adjusted results included a £3.8m write-down of goodwill and other intangible assets arising primarily as a result of discount rate movements, as well as £1.2m of restructuring and other non-recurring cash costs. Without these, statutory pre-tax profit slumped 80.1% to £1.5m.
Adjusted operating profits in the engineering division were stable year-on-year at £5.3m, with the order book rising to a record £60m from £41m previously.
But trading volumes in the agriculture unit were impacted by drought conditions in parts of the USA and continuing high farm input costs in the UK suppressing demand. Adjusted operating profits in agriculture fell to £5.6m from £9.2m.
Group revenues were up 15.3% year-on-year at £143.2m, while the engineering order book rose 47% year-on-year to £60m, reflecting favourable long term macro trends supporting the nuclear sector, power, defence and medical segments.
The company declared a final dividend of 2.85p per share, which took the full-year payout to 5.2p, unchanged on last year.
"We expect challenging trading conditions in Speciality Agriculture to continue through the current financial year but are focused on managing current performance and positioning the division for growth on market recovery," said White.
"The Engineering order book levels will help deliver year on year growth during FY24 and beyond, with operational leverage in that division providing attractive returns."