LONDON (ShareCast) - (Sharecast News) - Agriculture and engineering group Carr's said on Tuesday that it was trading in line with the board's expectations for the year, as it urged more clarity over the UK's future trading relationship with the EU.
In an update for the 18 weeks to 5 January, Carr's said its agriculture division has kicked the year off on the front foot despite the mild autumn, which has subdued demand for oil and certain animal health products and supplements, with trading across the business as expected.

Carr's said sales volumes of feed blocks in the USA have started the year strongly following the recovery of cattle prices. Meanwhile, in the UK and Europe, feed block volumes are in line with the board's expectations.

The company's engineering business began the year in line with its expectations, with the order book remaining strong and the remote handling business continuing to perform well.

The US branch of the division has made a good start to the new year as it benefited from a strong order book, which was further underpinned by two significant MSIP contracts won over the summer.

As at 1 December 2018, net debt stood £23.9m, up from £15.4m at 1 September 2018, mainly due to the acquisition of Animax and usual seasonal working capital movements.

Chief executive Tim Davies said: "We remain confident that the investments made in acquisitions, research and product innovation leave the group well positioned for future growth.

"Whilst some clarity has been provided over the government's future policy on farming support, Brexit uncertainty remains for our customers and certain supply chains within which we operate. Further clarity over the UK's future trading relationship with the EU would bring greater confidence and stability back to our customers and marketplace although the group remains confident that it is well placed in the medium term."

Shore Capital analyst Akhil Patel said Carr's is in good position, benefiting from the investment made in prior years and ongoing investment today.

"Brexit uncertainty continues to remain for its customers and certain supply chains and it would be welcoming news if there is further clarity over the UK's future which would bring greater confidence and stability back into customers and the market. However, we continue to believe the improved engineering backdrop provides a significant opportunity for the group."

Shore rates the stock at 'buy'.

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