Carr's (CARR) saw its shares fall sharply after a profit warning at the end of March, but the group's first-half results indicate good trading despite challenging end-markets. The group's somewhat jarring diversification - it splits revenues between an agriculture and an engineering division, providing everything from livestock feed to engineering equipment for the energy sector - has proven to be a boon, with revenues up 15 per cent (see table).
The group took a number of steps to limit the impact from the previously announced contract delay in the UK manufacturing business. Cost cuts and new work won have only made up some of this shortfall, but the setback did not prevent segmental revenue growing 16 per cent to £16.3m.
Agriculture continued to struggle in the US as a consequences of low cattle prices, but the UK business has continued to perform well. The division grew operating profit 5 per cent to £7.3m, ahead of the board's expectations. The group continued its strategy of supplementing organic growth with acquisitions, buying engineering business Staber GmbH for €7.9m (£6.7m) and Phoenix Feeds for £1.7m during the period.
Analysts at Edison forecast adjusted profit before tax of £11.8m in the year to August 2017, giving EPS of 8.9p, rising to £14.7m and 11.1p in FY2018 (from £14m and 10.6p in FY2016).
CARR'S (CARR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 137p | MARKET VALUE: | £125.2m | |
| TOUCH: | 134-137p | 12-MONTH HIGH: | 157p | LOW: 107p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 98p* | NET DEBT: | 11% | |
| Half-year to 4 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016** | 153 | 8.5 | 6.60 | 0.95 |
| 2017 | 177 | 8.3 | 6.40 | 0.95 |
| % change | +15 | -3 | -3 | |
Ex-div: 20 Apr Payment: 12 May *Includes intangible assets of £17.3m, or 19p a share **The 2016 half year ended on 27 Feb, results restated | ||||
