TIDMCARR
RNS Number : 5247E
Carr's Group PLC
19 July 2016
19 July 2016
Carr's Group plc
"Carr's" or the "Group"
Trading Update
TRADING REMAINS IN LINE WITH THE BOARD'S EXPECTATIONS
Carr's (CARR.L), the Agriculture, Food and Engineering Group, is
issuing a trading update for the year ending 3 September 2016. This
update relates to the 20 week period ended 19 July 2016.
Overall trading for the Group continues to be in line with the
Board's expectations for the financial year ending 3 September
2016.
Agriculture
Feedblocks have performed very well year to date, driven
primarily by excellent volume growth in the USA resulting from
continued market growth and market share gains. Feedblock sales
volumes in the UK are slightly down year to date, due to the
ongoing and widely-reported challenges in the UK agriculture
market. Feed sales were down less than 1% year to date, however the
business gained market share as national feed sales declined by
c.4.4% over the same period.
On 1 June 2016, Carrs Billington Agriculture (Sales) Ltd (Carrs
Billington) acquired 100% of the share capital of Phoenix Feeds Ltd
(Phoenix Feeds). The Lancashire-based business is a leading
provider of dairy feed and technical nutrition advice to farmers in
the North West of England. Phoenix Feeds has an excellent fit with
Carrs Billington, and the acquisition is in line with our stated
strategy of strengthening our presence in our current geography and
leading in dairy nutrition.
Machinery sales are down year to date, as are national machinery
sales driven by a reduction in farm incomes and a lack of
confidence in the short term prospects for farming. There is no
expectation that this will change in the near term and will likely
continue through the next financial year.
The Country Store network has performed well, with retail sales
up on last year and exceeding management's expectations. The
improved performance can be attributed to the product offering and
geographic reach of the Country Stores throughout South Scotland
and Northern England. The oil distribution business has also
performed well, with sales volume growth in the period.
Food
The Food division has performed well, with underlying volumes
1.6%(1) ahead of last year. While there has been significant
volatility in the wheat market in the period, Carr's approach to
risk management, which seeks to match sales contracts with raw
materials commitments, serves to minimise the impact of that
volatility. The insurance claim relating to the previously
announced December 2015 flooding is ongoing, but there is no change
to the expectation that this will be successful and the flooding
therefore having little to no financial impact on the business.
______________ (1) After adjusting for volumes attributable to
the customer affected by flooding, which are covered by
insurance.
Engineering
The UK Manufacturing business is continuing to feel the impact
from the downturn in the oil and gas sector, but is benefitting
from the ongoing resurgence in the UK nuclear sector. As previously
reported a number of the nuclear contracts in this financial year
were weighted to Q3 and Q4, and some customer-triggered short-term
delays have resulted in reduced activity of the business in the
period.
Carr's UK manufacturing business has been awarded The Sellafield
Vessels and Tanks Category Management Framework contract, won
through an open European Tendering process and valued at GBP48m at
time of tender. The framework agreement secures an exclusive
position to deliver the design and manufacture of Sellafield's
highest complexity vessels for the next 10 years. This is a
significant milestone for the Engineering Division, is the largest
ever contract secured by the business and underpins the growth and
development of our Engineering division over the medium term.
The Remote Handling business is to deliver its second robot,
Sally, to Sellafield by the year end, with assembly underway. This
is the second in the series and has been designed to assist in the
removal of high-level toxic nuclear waste on the site. As stated at
the interim results in April, a product development programme is
underway, to ensure that our remote handling technology remains at
the forefront of the sector.
It is currently anticipated that the performance of the
Engineering division will be behind the Board's expectations for
the 2016 financial year, due to the aforementioned contract delays.
However, the overall impact of this will be offset with results
above expectations elsewhere in the Group and the longer term
prospects for the division have been notably strengthened with the
new Sellafield contract award.
Dividend
The Board announces that a second interim dividend of 0.95 pence
per share (2015: 0.925 pence per share), an increase of 2.7%, will
be paid on 7 October 2016 to shareholders on the register on 16
September 2016. The ex-dividend date will be 15 September 2016.
Tim Davies, Chief Executive, commented:
"The Group continues to operate in difficult and challenging
markets and this has inevitably been exacerbated by the uncertainty
triggered by the result of the recent EU referendum. However, the
Board remains confident that it is well-placed to respond to these
challenges, and to take advantage of any opportunities that may
arise from the changing markets.
"Carr's continues to benefit from the broad diversity of its
product offering and geographic spread with a significant
proportion of profits generated outside of the UK. The Group is
focused on generating organic growth, reviewing acquisition
opportunities and driving innovation through research and
development. The Board remains confident of meeting its full year
financial expectations."
The Group expects to issue Preliminary Results for the year
ending 3 September 2016 on 14 November 2016.
END
Enquiries:
Carr's Group plc Tel: +44 (0) 1228 554
600
Tim Davies (Chief Executive)
Neil Austin (Group Finance
Director)
Powerscourt Tel: +44 (0) 20 7250
1446
Nick Dibden
Sophie Moate
Nick Brown
About Carr's Group plc:
Carr's Group (CARR.L) is an international leader in the
provision of essential industrial services focused on the
Agriculture, Food and Engineering sectors. The Group offers a range
of services including the distribution of animal feed, fertiliser
and farm machinery, and the manufacturing and supply of flour,
robotic and remote handling equipment, feed blocks for livestock,
and a UK network of rural stores with a facility footprint spanning
the UK, Europe and USA, supplying customers in 35 countries around
the world.
For further information, please visits: www.carrsgroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
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