Bad weather boosts Carr's Milling finances

North agriculture and engineering group Carr’s Milling Industries has delivered a positive trading statement

Tim Davies, chief executive of Carr's Milling
Tim Davies, chief executive of Carr's Milling

North agriculture and engineering group Carr’s Milling Industries has delivered a positive trading statement, having benefited from adverse weather and overseas expansion.

The Carlisle company released its second interim management statement for the year ending August 31, in which it said it was continuing the strong growth in activity it had achieved in the first half.

The cold weather that persisted until Easter and beyond, causing havoc for farmers, stimulated sales of compound feed, feed blocks, animal health products and fuel, and in the US the combination of droughts and a harsh winter also increased the market for the firm’s feed blocks.

Also within the agriculture division, the group said its UK retail network was continuing to work well, although sales of farm machinery fell, reflecting pressures on farm incomes.

In the food division, Carr’s said its milling business had started to improve, thanks to poor UK harvests and reliance on overseas wheat, processed at its plants.

The statement released to the London Stock Exchange said: “As with the agriculture division, weather-related factors have had a beneficial impact; the exceptionally poor UK harvest of 2012 has led to a significantly greater dependence on overseas wheat and the port-side location of two of our three mills (Kirkcaldy and Silloth) continues to give Carr’s cost-effective access to overseas wheat.”

Across Carr’s engineering division, demand for remote handling equipment in the nuclear and petrochemicals industries had contributed to building revenues, and Bendalls’ multi-million-dollar contract with Hyundai, to supply pressure supply vessels to a BP oil project west of the Shetland Islands, is expected to be substantially completed by the end of August.

The company last month announced its continued expansion in the US, when its wholly-owned US subsidiary, AFS Inc, bought Western Feed Supplements, a low-moisture cattle feed block business on America’s West Coast for �600,000. It already has operations in South Dakota and Oklahoma.

The investments reflect Carr’s growing international reputation for developing proprietary products that improve the yield and health of beef and dairy cattle.

At June 1, its net debt was £28.4m, up £25.9m from £2.5m last September 1, a rise it attributed to the capital expenditure it had made in its three divisions of engineering, agriculture and food.

A second interim dividend of 7.75p will be paid to shareholders in October, up from 7.25p paid in 2012.

The statement said: “The board is confident that Carr’s will deliver strong earnings growth in line with the company’s expectations.”

The board is confident that Carr’s will deliver strong earnings growth in line with the company’s expectations

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