Interim Results
Carr's Milling Industries PLC
20 April 2004
CARR'S MILLING INDUSTRIES PLC - INTERIM ANNOUNCEMENT
Carr's, the Cumbria-based agriculture, food and engineering business, announces
results for the half year ended 28 February 2004 which are ahead of both budget
and the corresponding period of the previous year in addition to the Directors'
belief that Carr's remains on track for further progress.
•Turnover increased by 4.9% to £71.70m
•The pre-tax profit of £2.87m represented increases of 21.5% (reported)
and 7.0% (underlying), whilst EPS of 22.6p represented increases of 29.1%
(reported) and 11.3% (underlying)
•Net assets per share totalled 287.8p (2003: 270.2p), up 6.5%
•Considering the overall performance in the half year and the Group's
healthy financial position, the interim dividend per share is increased by
12.5% to 4.5p
•In Agriculture, as usual the most important Division in terms of both
turnover and profit, sales of animal feed increased and the resultant gain
was partially offset by the under recovery of unprecedented raw material
cost increases, notably in grain, in the UK and the cessation of the US
Government's Drought Assistance Programme in the US, whilst fertiliser
benefited from last year's rationalisation and higher sales volumes
•Flour registered very poor margins as a result of delays in passing on to
customers increases in the UK price of wheat, which rose 60% in eight
months, peaking in January 2004
•Engineering reduced its loss despite a substantial reduction in turnover,
reflecting in both cases the closure of Keytor in March 2003
With regard to outlook, David Newton, Chairman, stated: ' Sales in the US of our
low moisture feed blocks, 'Feed in a Drum' and 'Smartlic', have started to
increase, suggesting that the subsidised feed stock on farms is now depleted.
Continued growth of our 'Crystalyx' speciality blocks in both the UK and
Continental Europe, combined with growth in retail sales through our
agricultural branches, should, with the benefits of the fertiliser
reorganisation last year, positively impact the second half of this year. The
flour price increases will now have a favourable effect on our food business
results. With little change in the Engineering Division, the Board continues to
believe that Carr's should make further progress in the current year.'
Enquiries:
Carr's Milling Industries PLC 01228-554 600
Chris Holmes (Chief Executive Officer)
Ron Wood (Finance Director)
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
CHAIRMAN'S INTERIM STATEMENT
At the AGM on 6 January 2004, I stated that trading in the four months to end
December 2003 was ahead of both budget and the corresponding period of the
previous year. That remained the position following the six months to 28
February 2004. The Directors believe that Carr's remains on track for further
progress.
FINANCIAL REVIEW
Group turnover for the half year ended 28 February 2004 increased by 4.9% to
£71.70m (2003: £68.35m). Group operating profit increased by 17.3% to £3.16m
(2003 : £2.70m), profit before tax by 21.5% to £2.87m (2003 : £2.36m), and
earnings per share by 29.1% to 22.6p (2003 : 17.5p).
After removing the impact of last year's £0.32m one-off charge in respect of the
reorganisation costs in the Engineering Division, the Group operating profit
advanced by 4.8% to £3.16m (2003: £3.02m), whilst profit before tax was 7.0%
higher at £2.87m (2003: £2.68m). On the same basis, earnings per share improved
by 11.3% to 22.6p (2003: 20.3p).
Period end equity shareholders' funds increased by 6.5% to £23.24m from £21.82m
at 1 March 2003, representing net assets per share of 287.8p (2003: 270.2p). Net
debt reduced to £7.21m (2003: £8.45m), giving gearing of 31.0% (2003: 38.7%).
Net interest payable decreased to £0.29m (2003: £0.33m) and was covered 10.9
times (2003: 9.1 times) by underlying profit before interest and tax.
As usual, Agriculture was the most important of the three Divisions in terms of
both turnover and profit.
The increased pre-tax profit was achieved despite increases, over the comparable
period in 2003, of £0.3m and £0.1m in pension costs and insurance premia,
respectively.
INTERIM DIVIDEND
Considering the overall performance in the half year and the Group's healthy
financial position, the Board has declared an increased interim dividend per
share of 4.5p, up 12.5% on 2003's 4.0p, to be paid on 25 May 2004 to
shareholders on the register at close of business on 30 April 2004, with an
ex-dividend date of 28 April 2004.
BUSINESS REVIEW
Agriculture
Feed
The composition of the Group's animal feed business is set out below, including
the location and product of each site:
Operation Product Location
Carrs Billington Agriculture Compound feed Carlisle, Cumbria
(in association with Edward Billington Penrith, Cumbria
& Sons Limited) Stone, Staffordshire
Caltech Low moisture feed block Silloth, Cumbria
Animal Feed Supplement Low moisture feed block Belle Fourche, South
Dakota, USA
Poteau, Oklahoma, USA
Sales of compound animal feed and blended feed volumes increased in the first
six months. However, the full benefit of these increased volumes was not
achieved due to the under recovery of unprecedented raw material cost increases,
notably in grain.
In the UK markets, 'Crystalyx' continued to grow sales of its equine brands and
also benefited from the introduction of 'Easy Breather', a product formulated
and produced especially for calves.
In 2003, Animal Feed Supplement had benefited from the introduction of the US
Government's Drought Assistance Programme last year, which subsidised feed
supplement products for ranchers in certain states, thereby achieving a record
sales increase for these products in the US of 29% as compared to 2002. It would
appear a large amount of that subsidised feed was held in stock by ranchers and
therefore reduced demand this year; consequently, the sales volume and profit
has not been as great as expected. The result has been further reduced by
adverse currency movements.
Fertiliser
Carr's Fertilisers has three manufacturing and blending sites, at Invergordon
(Easter Ross), Montrose (Angus) and Silloth (Cumbria), producing a wide range of
fertilisers.
Following the rationalisation of the fertiliser business last year, the expected
financial benefits have been achieved. Sales volumes were higher than last year
and good progress is being made in the speciality brands range.
Retail
Carr's Retail comprises 15 branches, from Milnathort (Fife) in the North to Leek
(Staffordshire) in the South, selling farm supplies.
Benefits from the opening of the new larger branch at Cockermouth (Cumbria) and
further improvements from new products being added to the portfolio gave further
increases in volumes and profits.
Machinery
Carr's Machinery distributes new and used agricultural and ground care machinery
from six of the retail branches, in the north of England and south west of
Scotland. These branches have modern workshops that test equipment and provide a
comprehensive stock of spare parts.
As expected, following high sales in the last two years, both sales and profits
are lower.
Food
Carr's principal food company is Carr's Flour Mills, a cereals processing
company with a mill at Silloth, using the latest in milling technology to meet
the quality and specialist requirements of bakers, food manufacturers and
retailers.
The performance of Carr's Flour Mills during the half year was affected by the
upheaval in world grain markets. Reduced crop yields across Europe resulted in
world wheat stocks declining to a 20 year low. Consequently, UK wheat prices
rose by 60% in eight months, peaking in January 2004. Inevitably, there were
delays in passing on these increases to our customers, so margins were very
poor. The bright spot so far this year is that sales agreements for Carr's
Breadmaker Flour have been signed with three major multiple retailers.
Engineering
Engineering comprises Bendalls and R Hind, both of which are based in Carlisle.
Bendalls, whose specialism is precision welding, designs and manufactures
process plant and equipment for the petrochemical, oil and gas, nuclear power,
pharmaceutical, process and water industries. R Hind provides vehicle body
building and accident repairs for cars and commercial vehicles.
Engineering reduced its loss despite a substantial reduction in turnover,
reflecting in both cases the closure of Keytor in March 2003. Bendalls'
involvement in renewable energy continues, albeit at a slower pace than
anticipated. The successful closure of an equity funding round, by its strategic
partner, supports the launch of a programme to develop a successor to the
world's first offshore tidal turbine. R Hind benefited from operating from one
site, as against three in 2003.
OUTLOOK
Sales in the US of our low moisture feed blocks, 'Feed in a Drum' and
'Smartlic', have started to increase, suggesting that the subsidised feed stock
on farms is now depleted. Continued growth of our 'Crystalyx' speciality blocks
in both the UK and Continental Europe, combined with growth in retail sales
through our agricultural branches, should, with the benefits of the fertiliser
reorganisation last year, positively impact the second half of this year. The
flour price increases will now have a favourable effect on our food business
results. With little change in the Engineering Division, the Board continues to
believe that Carr's should make further progress in the current year.
David Newton 20 April 2004
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the half year ended 28 February 2004
Half Year Ended Year Ended
28 February 1 March 30 August
2004 2003 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Group turnover - continuing operations 71,699 68,353 148,688
--------- -------- ----------
Group operating profit - continuing operations 2,495 2,228 4,011
Share of operating profit in associate - continuing
operations 666 467 718
--------- -------- ----------
Total operating profit: group and share of associate 3,161 2,695 4,729
--------- -------- ----------
Profit on ordinary activities before interest and
taxation 3,161 2,695 4,729
Interest receivable
Group 48 88 162
Interest payable
Group (313) (377) (746)
Associate (26) (43) (79)
--------- -------- ----------
Profit on ordinary activities before taxation 2,870 2,363 4,066
Taxation (918) (763) (1,277)
--------- -------- ----------
Profit on ordinary activities after taxation 1,952 1,600 2,789
Minority interests - equity (124) (185) (329)
--------- -------- ----------
Profit for the period 1,828 1,415 2,460
Dividends (363) (324) (930)
--------- -------- ----------
Retained profit 1,465 1,091 1,530
--------- -------- ----------
Earnings per ordinary share
Basic 22.6p 17.5p 30.5p
Diluted 22.6p 17.5p 30.5p
Alternative basis 22.6p 20.3p 34.7p
Dividend per share 4.5p 4.0p 11.5p
STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES
for the half year ended 28 February 2004
Half Year Ended Year Ended
28 February 1 March 30 August
2004 2003 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Profit for the period 1,828 1,415 2,460
Currency translation differences on
foreign currency net investments (467) (1) (16)
--------- -------- ----------
Total recognised gains and losses
relating to the period 1,361 1,414 2,444
--------- -------- ----------
CONSOLIDATED BALANCE SHEET
at 28 February 2004
at at at
28 February 1 March 30 August
2004 2003 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Fixed assets
Intangible assets 210 80 63
Tangible assets 19,531 19,039 19,723
Investments
Investment in associate 1,909 1,130 1,461
Loan to associate 1,225 1,225 1,225
Other investments 253 153 153
--------- -------- ----------
23,128 21,627 22,625
Current assets
Assets held for resale - 80 -
Stocks 13,925 12,736 9,123
Debtors 27,740 27,340 18,694
Cash at bank and in hand 1,650 1,332 1,472
--------- -------- ----------
43,315 41,488 29,289
Creditors
Amounts falling due within one year (36,622) (34,911) (22,845)
--------- -------- ----------
Net current assets 6,693 6,577 6,444
Total assets less current liabilities 29,821 28,204 29,069
Creditors
Amounts falling due after more than
one year (4,089) (4,107) (4,265)
Provision for liabilities and charges (1,099) (1,129) (1,266)
Deferred income (274) (308) (303)
--------- -------- ----------
Net assets 24,359 22,660 23,235
--------- -------- ----------
Capital and reserves
Called-up share capital 2,018 2,018 2,018
Share premium account 4,752 4,752 4,752
Revaluation reserve 1,678 1,952 1,742
Profit and loss account 14,789 13,093 13,727
--------- -------- ----------
Equity shareholders' funds 23,237 21,815 22,239
Minority interests - equity 1,122 845 996
--------- -------- ----------
24,359 22,660 23,235
--------- -------- ----------
CONSOLIDATED CASH FLOW STATEMENT
for the half year ended 28 February 2004
Half Year Ended Year Ended
28 February 1 March 30 August
2004 2003 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Net cash inflow/(outflow) from
operating activities 1,432 (342) 5,504
--------- -------- ----------
Returns on investments and servicing of
finance
Interest received 51 86 153
Interest paid (273) (296) (638)
Interest paid on finance leases (42) (56) (101)
--------- -------- ----------
Net cash outflow from returns on
investments
and servicing of finance (264) (266) (586)
--------- -------- ----------
Taxation (594) (537) (1,303)
--------- -------- ----------
Capital expenditure and financial
investment
Purchase of tangible fixed assets (1,153) (875) (2,829)
Purchase of intangible fixed assets (160) - -
Sale of tangible fixed assets 235 137 679
Grants received - 160 189
Purchase of investments (100) - (2)
Sale of investments - - 2
--------- -------- ----------
(1,178) (578) (1,961)
--------- -------- ----------
Equity dividends paid (606) (524) (847)
--------- -------- ----------
Cash (outflow)/inflow before financing (1,210) (2,247) 807
--------- -------- ----------
Financing (746) 253 (1,486)
--------- -------- ----------
Decrease in net cash (1,956) (1,994) (679)
--------- -------- ----------
NOTES
1 The tax charges for the half year ended 28 February 2004 and 1 March 2003 are
based on the estimated tax charge for the applicable year. The overseas
estimated tax charge for the half year ended 28 February 2004 is £249,000 (2003
interim : £465,000; year ended 2003 : £465,000) The share of the associate's
estimated tax charge for the half year ended 28 February 2004 is £192,000 (2003
interim : £62,000; year ended 2003 : £54,000 credit).
2 The equity dividend for the half year ended 28 February 2004 is 4.5p per share
(2003 interim : 4.0p per share; year ended 2003 : 11.5p per share)
3 The calculation of basic earnings per share is based on profits attributable
to shareholders of £1,828,000 (2003 interim : £1,415,000; year ended 2003 :
£2,460,000) and on 8,073,599 (2003 interim : 8,058,554; year ended 2003 :
8,066,072) shares, being the weighted average number of shares in issue during
the period. The calculation of diluted earnings per share is based on profits
attributable to shareholders of £1,828,000 (2003 interim : £1,415,000; year
ended 2003 : £2,460,000) and the weighted average number of shares in issue to
assume conversion of all dilutive potential ordinary shares. The weighted
average number of shares is increased to 8,085,417 shares (2003 interim :
8,061,861; year ended 2003 : 8,079,179).
No exceptional gains and losses are reported in the half year ended 28 February
2004. Exceptional gains and losses in the half year ended 1 March 2003 and the
year ended 30 August 2003 do not relate to the ongoing profitability of the
Group and an alternative earnings per share is presented as follows:
Half year ended Half year ended Year ended
28 February 2004 1 March 2003 30 August 2003
Earnings Earnings Earnings
Earnings per share Earnings per share Earnings per share
£'000 p £'000 p £'000 p
Earnings/earni
ngs per share 1,828 22.6 1,415 17.5 2,460 30.5
Exceptional
items
Reorganisation
costs in
Agricultural
Division - - - - 261 3.2
Reorganisation
costs in
Engineering
Division - - 320 4.0 243 3.1
Taxation
arising on
exceptional
items - - (96) (1.2) (166) (2.1)
-------- ------ --------- ------ ------- -------
Earnings/earni
ngs per share
- alternative 1,828 22.6 1,639 20.3 2,798 34.7
-------- ------ --------- ------ ------- -------
4 Cash flow from operating activities
Half year ended Year ended
28 February 2004 1 March 2003 30 August 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Group operating profit 2,495 2,228 4,011
Depreciation charge 1,138 1,106 2,271
Profit on sale of tangible
fixed assets (74) (25) (166)
Goodwill amortisation 13 16 35
Grants amortisation (29) (31) (65)
(Increase) in stocks (4,802) (3,679) (66)
(Increase)/decrease in
debtors (8,748) (8,707) 119
Increase/(decrease) in
creditors 11,606 8,750 (802)
(Decrease)/increase in
provisions (167) - 167
---------- ---------- ----------
Net cash inflow/(outflow)
from operating activities 1,432 (342) 5,504
---------- ---------- ----------
5 Analysis of net debt
Half year ended Year ended
28 February 2004 1 March 2003 30 August 2003
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Cash at bank and in hand 1,650 1,332 1,472
Bank overdrafts (3,879) (2,875) (1,704)
Loans: amounts falling due
within one year (1,366) (2,367) (1,368)
Loans: amounts falling due
after more than one year (2,335) (3,135) (2,735)
Finance leases: amounts
falling due within one year (402) (431) (555)
Finance leases: amounts
falling due after more than
one year (880) (972) (725)
---------- ---------- ----------
(7,212) (8,448) (5,615)
---------- ---------- ----------
6 The figures and financial information for the year ended 30 August
2003 do not constitute the statutory financial statements for that year. Those
financial statements have been reported on by the auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified. This interim
statement for the half year ended 28 February 2004 was approved by a duly
appointed and authorised committee of the Board of Directors on 21 April 2004.
The interim statement has neither been audited nor reviewed by the auditors.
This interim statement has been prepared in accordance with the accounting
policies set out in the Group's Report and Accounts for the year ended 30
August 2003.
7 This interim report is being sent by post to all registered shareholders.
Copies are also available to the public from the Company's registered office:
Old Croft, Stanwix, Carlisle, CA3 9BA.
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 1st October 2024
COMPANIES COVERED:
Latest directors dealings
- 1 hour ago Income & Growth VCT
- 1 hour ago Keywords Studios
- 1 hour ago Big Technologies
- 1 hour ago TT Electronics
- 1 hour ago Diaceutics