AGM/Interim Management Statem

RNS Number : 2196Z

Carr's Milling Industries PLC

11 January 2011

 



IMMEDIATE RELEASE

11 January 2011

CARR'S MILLING INDUSTRIES PLC

("Carr's" or "the Group")

Annual General Meeting/Interim Management Statement

Carr's (CRM.L), the agriculture, food and engineering group, announces its first Interim Management Statement for the 53 weeks to 3 September 2011, as required by the UK Listing Authority's Disclosure and Transparency Rules. 

The Statement relates to the 18 week period ended 1 January 2011 and is being issued to coincide with Carr's Annual General Meeting being held in Carlisle at 11.30 am today.

Overview

The strong trading performance for the first quarter of the current year, indicated in the annual results announcement on 8 November 2010, has continued and is ahead of management expectations.  The growth in sales and profit achieved during the period also reflects the successful integration of the acquisitions made during 2010.  The markets in which the Group operates remain stable and the Board remains confident in prospects for the full year.

Highlights

·     Trading to 1 January 2011 is ahead of management expectations

·     Strong performance from Agriculture businesses, particularly feed blocks, fertilisers and fuels

·     Businesses acquired in 2010 have been integrated and are making a good contribution to Group profit

·     Engineering division trading ahead of last year

·     Food division sales volumes are ahead of last year and trading in line with budget

·     Cash outflow is higher than budget due to the working capital requirements associated with higher than normal seasonal activity,  but remains comfortably within bank facilities

Agriculture Trading

As expected, the UK feed block business, Caltech, has benefited from the launch of the Crystalyx brand in New Zealand and the integration of the Scotmin business acquired in June 2010.  Sales and profit have increased following a successful autumn sales promotion and, from late November onwards, from snow covered ground.  Sales from our joint venture company in Germany continued to grow and benefited from entry into new European markets, notably France.

Compound feed volumes were slightly ahead compared to the same period last year and the business has managed the significant volatility in raw material costs by implementing price increases to offset higher input costs.

The acquisitions of A C Burn in June 2010 and Forsyths of Wooler in September 2010 contributed to progress from the retail business in the North of England and Scotland where the total number of stores is currently 19. 

Oil prices have continued to be volatile during the period.  Despite this, sales of fuels were well ahead of expectation through a high level of customer service, resulting in many new accounts being won, the opening of our Lancaster depot in September and the early onset of cold winter weather which resulted in record sales through to the end of December.

Agriculture Manufacturing

Demand for fertiliser during the period has been strong as a result of cereal prices remaining high with farmers buying in anticipation of input costs rising further.  This has resulted in a substantial increase in sales and profit for the period, although a proportion of this represents trading that would normally fall into the second half of the year.

In the USA, feed block sales and profitability improved in line with the rise in beef prices and marketing initiatives.

Food                                                          

The UK flour market remains challenging with industry over-capacity and wheat prices that have more than doubled since June 2010.  Despite this, volumes are ahead of last year and margins have been broadly maintained through disciplined wheat purchasing policies.

Engineering

Profit for the period improved significantly with a stronger performance from Bendalls, the specialist steel fabrication business, resulting from continued growth in its order book and the absence of loss-making contracts which impacted the first six months last year.

In addition, Wälischmiller continues to operate at a high activity level with significant contracts to be completed in 2011.  The order book is strong and growing with recent orders won in Japan and Russia.

Indebtedness

Net debt traditionally increases in the winter months in line with the seasonal working capital needs of the Agriculture businesses.

The seasonal element of sales for the period was exceptionally high compared to the same period in 2009, reflecting high inventory levels to meet demand, particularly for fuels, feed and fertiliser.  The working capital need was further increased as the result of a rise in the price of fertiliser raw materials and wheat costs in the food division doubling since June 2010.

At 27 November 2010, net debt was £32.8 million, which compares to £25.2m at 28 November 2009 and £15.5 million at 28 August 2010. 

Dividend

Following last year's decision to improve cash flow to Shareholders by paying three dividends a year, the proposed final dividend of 12 pence per share, which was announced on 8 November 2010, will be paid on 21 January 2011 to Shareholders on the register at close of business on 24 December 2010 (if approved by shareholders at the AGM today).  This will make a total dividend of 24 pence per share, an increase of 4.3% on the total for last year of 23 pence.

Enquiries:

Carr's Milling Industries PLC Chris Holmes (Chief Executive) Ron Wood (Finance Director)	01228-554 600
Bankside Consultants Limited Simon Bloomfield	020-7367 8888

 

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