Excellent growing conditions in its core UK and Irish farming markets helped Origin Enterprises (OGN) bump up full-year adjusted operating profit by 15 per cent to €79.5m (£62.1m) in its core agri-services division. Admittedly, year-on-year comparisons for all agri-businesses often reflect the vagaries of weather rather than operational performance. But Origin's profit surge has also been driven by a demand swing towards its higher-margin agronomy services segment, which resulted in a 70 basis point increase in the operating margin to 5.6 per cent. This is a sure indicator that management's focus on 'value added' business is starting to reap rewards.
As ever, Origin had to contend with regional variations, including a faltering environment in Poland's agricultural export markets. Overall, however, demand for farm inputs recovered strongly through the year. Even Agroscope, Origin's new Ukrainian subsidiary acquired in January, delivered a "robust performance", despite the country's ongoing security problems. And a step-up in operating cash flows - up 52 per cent to €75.3m - enabled Origin to reduce net debt by €17.6m to €11.9m, while funding a significant hike in the full-year payout.
Broker Investec Securities envisages EPS of 59.2¢ for 2015, thanks to adjusted pre-tax profits of €85m.
| ORIGIN ENTERPRISES (OGN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 790¢ | MARKET VALUE: | €989m | |
| TOUCH: | 770-810¢ | 12-MONTH HIGH: | 883¢ | LOW: 645¢ |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 179¢* | NET DEBT: | 5% | |
| Year to 31 Jul | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 1.08 | 44.5 | 27.1 | 9 |
| 2011 | 1.26 | 62.5 | 36.8 | 11 |
| 2012 | 1.34 | 53.2 | 31.9 | 15 |
| 2013 | 1.42 | 81.4 | 52.8 | 17.25 |
| 2014 | 1.42 | 73.9 | 48.9 | 20 |
| % change | - | -9 | -7 | +16 |
Ex-div: 27 Nov Payment: 12 Dec *Includes intangible assets of €151m, or 121¢ a share £1=€1.28 | ||||
