Irish agri-services, crop and feed company Origin Enterprises (OGN) is trying to cultivate some green shoots after a tough year. A challenging period for farmers, particularly in the UK, dented its higher-margin sales of agronomy services, which cover anything from crop production to soil management. Stripping out the beneficial currency-translation effect of the weak euro and the impact of last year's Ukranian acquisition of Agroscope, group revenues fell by €34.6m (£25.37m) or 2 per cent.
While this business produced "solid progress", the farming sector in the Ukraine is understandably feeling the pressure of political and economic uncertainty following Russia's partial annexation of the country. This has hit the Ukranian hryvnia and in turn farm earnings translated back into euros.
But performance in Poland was better, with agronomy revenues rising. In fact, the company is doubling down in eastern Europe with two Romanian acquisitions and one Polish purchase, all of which should be completed by year-end.
In the home Irish market the abolition of milk quotas supported demand for grass production, while in the UK the company has committed €25m to support research and development within its local subsidiary Agrii. It also realised a €12m net gain from the sale of its stake in Valeo foods, which offset restructuring costs in the UK.
Analysts at Davy expect pre-tax profits of €83.9m in the year to July 2016, leading to EPS of 57¢, up from €77.7m and 52.9¢ in FY2015.
| ORIGIN ENTERPRISES (OGN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 715¢ | MARKET VALUE: | €895m | |
| TOUCH: | 690-740¢ | 12-MONTH HIGH: | 901¢ | LOW: 705¢ |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 226¢* | NET CASH: | €59.5m | |
| Year to 31 Jul | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.26 | 62.5 | 36.8 | 11.0 |
| 2012 | 1.34 | 53.2 | 31.9 | 15.0 |
| 2013 | 1.42 | 81.4 | 52.8 | 17.3 |
| 2014 | 1.42 | 73.9 | 48.9 | 20.0 |
| 2015 | 1.46 | 86.4 | 61.7 | 21.0 |
| % change | +3 | +17 | +26 | +5 |
Ex-div: 3 Dec Payment: 18 Dec *Includes intangible assets of €161m, or 129¢ a share | ||||
