For the half-year to February, Carr’s (CARR) characterised its performance as “resilient” in “challenging markets”. The group had already warned on profits in a mid-March trading update – citing a continually difficult agricultural backdrop and a delay to engineering contracts in Asia. It was somewhat reassuring to see that it had not lowered guidance any further within the official results – and to learn that it has not yet endured any material overall impact from the Covid-19 crisis.
That said, significant uncertainty remains in relation to the pandemic. To that point, Carr’s highlighted a strong balance sheet, with net debt (excluding leases) of £25.4m, constituting 1.2 times adjusted cash profits, plus undrawn facilities of £22.4m. It added that its cash forecasting had been thoroughly stress-tested. However, the group – like many others – has opted to defer its interim dividend payment.
During the six months under review, trading for Carr’s larger agricultural business was slower than the prior year. This came amid challenging conditions, which continued to dampen farm incomes, as well as unseasonal weather affecting both the UK and the US. Revenue dipped by 5.5 per cent for the division, landing at £175m. Adjusted operating profits slid by 15.5 per cent to £9m. As outlined last month, engineering also had a “slow start”, because of contract phasing.
Broker Shore Capital has left its forecasts unchanged – and continues to expect adjusted diluted EPS of 10.8p in 2020.
| CARR'S (CARR) | ||||
| ORD PRICE: | 105p | MARKET VALUE: | £ 97m | |
| TOUCH: | 103-105p | 12-MONTH HIGH: | 166p | LOW: 84p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 124p | NET DEBT*: | 31% | |
| Half-year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 206 | 10.3 | 8.3 | 1.13 |
| 2019 | 200 | 10.5 | 9.3 | nil |
| % change | -3 | +2 | +12 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes £15.2m in lease liabilities | ||||
