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Carr's Milling is flourishing

RESULTS: Extra demand for animal feed, driven by poor weather conditions, has meant a big boost for Carr's Milling
April 16, 2013

Adverse weather conditions during the past six months have been positive for food producer, agricultural supplier and engineering specialist Carr's Milling Industries (CRM). Extra demand for specialist animal feed, as a supplement amidst poor grazing conditions, meant an extra £1.1m of weather-related gains. Accordingly, operating profit grew 31 per cent year on year to £8.8m, with no let-up in the pressure on feed supplies forecast this year.

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Carr's conglomerate structure encompasses food production at flour mills in Scotland, agriculture, and engineering. The engineering business benefited from demand in the nuclear and petrochemical industries for specialist fabrication equipment and sales there rose over £6m to £13.6m, with profits up 39 per cent at £2.19m. That was in contrast to a weak food market as overcapacity kept profit margins there low - the food division grew sales 8 per cent to £44.7m but profit reached just £448,000. Agriculture saw sales and profits grow 18 per cent per cent and 21 per cent, respectively, to £173m and £6.27m. Chairman Chris Holmes said Carr's is benefiting from efforts to increase market share in agricultural products by not pricing out higher-yielding farmers from the feed market.

Broker Investec Securities expects full-year pre-tax profit of £15.6m, giving EPS of 126.3p (from £13.1m and 98.2p in 2012).

CARR'S MILLING INDUSTRIES (CRM)

ORD PRICE:1,178pMARKET VALUE:£98.8m
TOUCH:1,169-1,195p12-MONTH HIGH:1,178pLOW: 788p
DIVIDEND YIELD:2.5%PE RATIO:9
NET ASSET VALUE:753p*NET DEBT:25%

Half-year to 2 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20121967.4454.07.25
201323110.180.87.75
% change+18+36+50+7

Ex-div: 24 Apr

Payment: 17 May

*Includes intangible assets of £5.9m, or 66p a share