The pressures on UK farmers from low milk and livestock prices aren't easing, and this continues to dent the top line at Carr's Group (CARR). The company sells feed and equipment to the farming industry through its agricultural division. Management acknowledges that the "challenging" UK market is likely to affect the division for the rest of this year and next. But chief executive Tim Davies says the size of the US beef herd is well and truly in recovery mode and the 11.7 per cent rise in year-on year feed sales volumes here - against a record number for the previous year - went some way towards mitigating the UK's woes.
The engineering division, which only accounts for roughly 7 per cent of revenues but is the highest-margin segment, made a slow start to the year as the company refocused its business development on the nuclear industry. But to that end Carr's has benefited from some contract wins at the Sellafield nuclear plant. This work will replace an oil and gas contract it fulfilled, Mr Davies said, and provides a pipeline of work through 2017.
House broker Investec expects adjusted pre-tax profits of £17.5m in the financial year to August 2016, leading to EPS of 13.5p, compared with £17.5m and 13.2p in FY2015.
| CARR'S GROUP (CARR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £133m | |
| TOUCH: | 146-149p | 12-MONTH HIGH: | 178p | LOW: 142p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 106p | NET DEBT: | 25% | |
| Half-year to 27 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p)** |
|---|---|---|---|---|
| 2015* | 209 | 10.6 | 8.5 | 0.93 |
| 2016 | 189 | 10.5 | 8.9 | 0.95 |
| % change | -9 | -1 | +5 | +3 |
Ex-div: 21 Apr Payment: 13 May *Restated **Adjusted to account for 10-for-one share split in January 2015 | ||||
