Carr's Group confident after year of transition
By Josh White
Date: Thursday 12 Dec 2024
(Sharecast News) - Carr's Group reported a 2.7% improvement in like-for-like revenue in its full-year results on Thursday, to £148m, driven by an 18.8% rise in the engineering division offset by a 6% decline in the agriculture division.
The London-listed company said its adjusted operating profit for the 12 months ended 31 August grew 11.5% to £8.9m, while adjusted profit before tax rose 13.7% to £8.5m.
However, the group recorded a statutory operating loss of £5.8m due to exceptional adjusting items totaling £14.6 million, including restructuring costs and asset impairments.
For continuing operations, which exclude the engineering division and the Afgritech agriculture business, revenue fell 7.5% to £75.7m, while adjusted operating profit declined 23.8% to £2.2m.
Adjusted earnings per share grew modestly by 4% to 2.6p, but a statutory loss before tax of £6.5m was reported.
The board said the agriculture division faced mixed trading conditions across its markets.
In the UK, volumes grew 12% as input prices normalised, but profits were impacted by energy costs and the restructuring of Animax, which posted a £0.8m loss.
The US meanwhile saw an improved performance in northern states supported a 50% increase in adjusted operating profit to £2.7m, despite revenue declining by 18% due to site closures.
Carr's said the agriculture division also benefited from stable contributions from joint ventures in the US and Germany.
The company meanwhile undertook decisive measures to address underperforming operations.
Its Nevada-based NGS plant was closed, alongside the Afgritech business in New York and a loss-making New Zealand unit, while a turnaround plan for Animax was underway.
Those actions contributed to a £6m cash cost in restructuring expenses and a £3m non-cash impairment charge.
The simplification of non-core activities, including investment property disposals and pension scheme de-risking, was expected to reduce central costs significantly in the 2025 financial year.
Carr's reported a net cash position of £4.5m for the total group, with continuing operations generating £8m in net cash by the year-end.
The company proposed a final dividend of 2.85p per share, maintaining total dividends for the year at 5.2p, consistent with 2023.
Looking ahead, Carr's said its agriculture division was positioned for future growth, supported by the arrival of a new leadership team and opportunities in extensive grazing markets.
Its management anticipated enhanced profitability from existing operations, product development, and geographic expansion.
Improved climatic conditions and the anticipated upturn in the US beef cycle could further support growth.
"I am confident that the transformative changes initiated during the year, including the process to realise value for the engineering division and the refreshed agriculture strategy, will deliver value for shareholders in both the immediate and long-term," said chief executive officer David White.
"Our focus is now on our core agriculture businesses, where our product portfolio provides a foundation from which to grow our share in existing and new markets."
At 1013 GMT, shares in Carr's Group were up 3.69% at 120.28p.
Reporting by Josh White for Sharecast.com.
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