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Carr's on course

Diversified strategy is working well
July 12, 2012

Carr's Milling Industries' strategy of building three diversified business streams is paying off. The engineering and agriculture businesses are performing well, more than compensating for weak trading conditions in food. With analysts edging forecasts up for the full year, we remain buyers.

IC TIP: Buy at 870p

Strong performance in the 18 week period to 7 July means results for the year so far are ahead of budget, prompting analysts from Investec to edge full year forecasts up by 2 per cent. Engineering has been particularly strong, benefiting from good performance by the Walischmiller remote handling and robotics business in Germany and good sales into the UK nuclear industry for UK businesses Bendalls and Carrs MSM. Agriculture has benefited from cold weather in the UK in April and May and an expanded range of products as well as good performance in the US.

Flour milling has been tough due to weak end markets and rising input costs, but the company is committing to a £17m investment in a new flour mill at Kirkcaldy which Investec believes will add to profits in 2014.