Carr's trading in line despite market challenges

Agriculture, food and engineering company Carr’s Group posted a trading update for the 20 weeks to 19 July on Tuesday, confirming trading remained in line with the board’s expectations for the financial year to 3 September.

The AIM-traded firm said that in agriculture, feed blocks have performed well year-to-date, driven primarily by excellent volume growth and market share gains.

Feedblock sales volumes in the UK are slightly down in the year-to-date, due to the ongoing challenges in the UK agriculture sector.

Sales of feed were down less than 1%, although the business gained market share as national feed sales declined by around 4.4% over the same period.

During the period, Carr’s Billington acquired 100% of Phoenix Feeds.

The company said machinery sales are down year-to-date, as are national machinery sales driven by a reduction in farm incomes and a lack of confidence in the short-term prospects for farming.

Carr’s Country Store network has performed well, it said, with retail sales up on last year and exceeding management expectations.

In the food division, Carr’s said it is performing well with underlying volumes 1.6% ahead of last year.

The company’s engineering division was struggling, however, as the UK manufacturing business continued to feel the impact from the oil and gas sector, although it was benefitting from the ongoing resurgence in the UK nuclear sector.

“The group continues to operate in difficult and challenging markets and this has inevitably been exacerbated by the uncertainty triggered by the result of the recent EU referendum,” said Carr’s chief executive Tim Davies.

“However, the board remains confident that it is well-placed to respond to these challenges, and to take advantage of any opportunities that may arise from the changing markets.”

Davies said the company is continuing to benefit from the broad diversity of its product offering and geographic spread, with a significant proportion of profits generated outside the UK.

“The group is focused on generating organic growth, reviewing acquisition opportunities and driving innovation through research and development.

“The board remains confident of meeting its full year financial expectations,” Davies added.

Carr’s board announced a second interim dividend of 0.95p per share will be paid on 7 October, a 2.7% increase.

It is due to post preliminary results for the year to 3 September on 14 November.