Behind the impact of a number of disposals and acquisitions, as well as some €15.5m (£12.5m) of exceptional charges, Origin Enterprise's (OGN) full-year results point to encouraging progress at its exciting farm services business. Indeed, after factoring out losses from disposals and initially loss-making farm-services acquisitions, underlying EPS rose 11 per cent to 45.2¢ on continuing operations which, along with strong cash flow, supported the substantial dividend increase.
Origin's farm services business, which provides advisory "agronomy" services and sells farm inputs, has been built up through a series of acquisitions and now accounts for 84 per cent of operating profit following a 5.6 per cent increase in profit to €69.7m. Both like-for-like revenue and profit increased by around 7 per cent. Encouragingly, strong growth in on-farm advice more than offset lower input sales volumes.
Conditions were tough, though, for Origin's marine oil and protein joint venture and 32 per cent-owned Irish branded food associate, Valeo. Profits from these interests dropped 11.6 per cent to €13.1m and the group had to contribute €6.4m to rationalisation costs at Valeo.
Post results, Goodbody Stockbrokers expects to raise full-year EPS forecasts to about 48.75¢ (from 45.2¢ in 2012).
| Origin Enterprises (OGN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 425¢ | MARKET VALUE: | €565m | |
| TOUCH: | 415-435¢ | 12-MONTH HIGH: | 425¢ | LOW: 313¢ |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 182¢* | NET DEBT: | 28% | |
| Year to 31 Jul | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 1.50 | 56.2 | 33.6 | nil |
| 2009 | 1.51 | -75.7 | -42.7 | 8.0 |
| 2010 | 1.08 | 44.50 | 27.1 | 9.0 |
| 2011 | 1.26 | 62.5 | 36.8 | 11.0 |
| 2012 | 1.34 | 53.2 | 31.9 | 15.0 |
| % change | +7 | -15 | -13 | +36 |
Ex-div: 12 Dec Payment: 7 Jan *Includes intangible assets of €143m, or 107¢ a share £1:€1.24 | ||||
