Trading Statement

Carr's Milling Industries PLC
14 February 2007




Wednesday 14 February 2007


                         CARR'S MILLING INDUSTRIES PLC

                               Trading Statement

Carr's, the Cumbria-based Agriculture, Food and Engineering group, proposes to
announce its results for the 26 weeks to 3 March 2007 on 23 April 2007. The
Board expects these results to report a reduction in Group profit before tax
compared to last year.

Food and certain parts of our Agriculture Division are experiencing
market-related difficult times, but the low moisture feed block businesses,
particularly in the USA, and Engineering are trading well.

Since the AGM on 9 January 2007, the UK market has resisted a flour price
increase predicated on a massive increase in wheat prices, combined with higher
energy costs. With little change envisaged in the foreseeable future, we
therefore expect a significant deterioration in our flour margins. We continue
to action cost reductions, where possible without jeopardising the high quality
flours produced at our three mills.

In Agriculture, the higher cost of raw materials (in particular, wheat) and
energy for our compound feed business is not fully offset by increases in sales
prices, culminating in lower margins. The farm gate milk price received by our
dairy farming customers remains unsustainably low, with no certainty of a change
in the coming months, exaccerbated by delays in receipt of the Single Farm
Payment. Accordingly, we anticipate, at this early stage of the peak selling
season, that farmers will hold off fertiliser purchases and therefore our sales
will be down year-on-year, with lower margins. Feed block revenue in the US and
the UK is ahead of budget and of last year. The new feed block plant to
manufacture Crystalyx in Germany, with our joint venture partner, is expanding
its market and trading ahead of expectations. The other joint venture feed
companies established in 2006, Bibby Agriculture in Wales and Afgritech in
England, have traded well. Indeed, the results from the new plant at Langwathby
(Cumbria), to produce by-pass protein for ruminant animals, is opening new
markets and the outlook is encouraging. The acquisition of Johnstone Fuels,
based in SW Scotland, was completed in January 2007 and complements our Wallace
Oils business, which operates in NW England and SW Scotland.

The Engineering Division is trading slightly ahead of budget. Bendalls'
fabrication for the SeaGen next generation tidal energy device is complete. Its
installation in Strangford Lough is expected later this year.

In January 2007, at the time of the AGM, the Board recognised that a ninth
successive annual increase in adjusted Group profit before tax would be
challenging but feasible. Events in the market place over the past five weeks
have now caused the Board to reconsider this view and a reduction in Group
profit before tax compared to market expectations for the year to 1 September
2007 is now expected.

Enquiries:

Carr's Milling Industries plc                              01228-554 600
Chris Holmes (Chief Executive Officer)
Ron Wood (Finance Director)

Bankside Consultants Limited
Charles Ponsonby                                           020-7367 8851
                                           [e-mail]




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