Despite grappling with weather and Brexit-related challenges, Carr’s (CARR) beat market expectations in 2019, driven by growth in its restructured engineering division – adjusted operating profit here jumped by almost a third to £5.3m. UK services and manufacturing revenue increased by a quarter to £23m, and the June acquisition of NW Total should provide a further boost, particularly in nuclear defence.
Agriculture sales – which accounted for the bulk of group revenue – dipped by 0.6 per cent. Yet cost and manufacturing efficiencies and the addition of Animax, a manufacturer of trace element supplements for livestock, lifted adjusted operating profit for that division by 2 per cent to £14m. With unseasonably mild and dry UK weather, improved grazing conditions meant domestic feed block volumes dropped by 16 per cent. However, in the US, the largest feed block market, supplement volumes including joint ventures decreased by 2.5 per cent, as consistently wet weather produced enough forage to feed livestock. Following a period of drought, Carr’s sees medium-term opportunity in a wetter US climate – more land available for livestock grazing should fuel demand for supplementary feed blocks.
House broker Investec forecasts adjusted pre-tax profit of £18.6m and EPS of 14.7p in 2020, rising to £19.2m and 15.2p in 2021.
| CARR'S GROUP (CARR) | ||||
| ORD PRICE: | 143p | MARKET VALUE: | £131m | |
| TOUCH: | 141-150p | 12-MONTH HIGH: | 176p | LOW: 128p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 124p* | NET DEBT: | 18% | |
| Year to 1 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 331 | 13.7 | 10.0 | 3.7 |
| 2016 | 315 | 14.1 | 10.7 | 3.8 |
| 2017 | 346 | 10.0 | 7.7 | 4.0 |
| 2018 | 403 | 15.5 | 13.0 | 4.5 |
| 2019** | 404 | 16.3 | 13.1 | 4.75 |
| % change | - | +5 | +1 | +6 |
| Ex-div: | 28 Nov | |||
| Payment: | 10 Jan | |||
| *Includes intangible assets of £42.2m, or 46p a share **Year to 31 Aug | ||||
