Trading Statement

RNS Number : 9299H

Origin Enterprises Plc

07 June 2011

 



Origin Enterprises plc

Trading Update

7 June 2011 - Origin Enterprises plc the Agri-Services group, ('Origin' or 'the Group'), issues this Trading Update for the nine months to 30 April 2011.

Overview

Origin reports an excellent performance in line with the Group's expectations for the 2011 financial year-to-date.  Following a very positive first half, the Group performed strongly in the seasonally important third quarter of the financial year reflecting the favourable operating environment for farming.

Business review

Agri-Services

Revenues for the third quarter increased by 4.3 per cent to €370.3 million.  The division achieved revenues of €939.3 million for the nine months compared with €816.6 million in the corresponding period last year, an increase of 15.0 per cent.  The components of the increase year-on-year for the quarter and year-to-date are outlined in the table below.

Revenue                                                                                  Attributable to:

	FY10	FY11	Increase	Acquisitions	Disposals	Currency	Underlying
	€m	€m		%	%	%	%
Quarter 3	355.0	370.3	4.3%	14.0	(26.7)	1.4	15.6
Year-to-date	816.6	939.3	15.0%	6.1	(11.6)	2.8	17.7

A marked recovery in profitability across the majority of primary enterprises has supported positive demand for the Group's integrated agronomy service offering and prescription farm-inputs portfolio.

On-farm integrated agronomy services operating under Masstock in the United Kingdom and Dalgety Agra Polska ('Dalgety') in Poland, performed strongly during the third quarter underpinned by increased autumn 2010 plantings and the benefit of a positive output price environment. 

Primary producers are currently managing through significant weather challenges as near drought conditions across much of the United Kingdom and Northern Europe impact crop yields and grass growth.  Masstock and Dalgety have been successfully responding to these challenges on behalf of their customers through the delivery of active crop management programmes designed to maximise returns.

In March 2011, the Group acquired United Agri Products Limited ('UAP') and the acquisition was cleared by the Office of Fair Trading on 3 June 2011.  Based in the United Kingdom, UAP significantly builds upon the Group's core position in the provision of integrated crop production systems to primary food producers which strongly complements the Masstock offering.  UAP along with Rigby Taylor Limited, an amenity services business, also acquired in March 2011, delivered an excellent performance in the period to 30 April 2011.  Reflecting the seasonality of these businesses their annual profits are predominantly earned in the second half of the financial year.

Business-to-business agri-inputs delivered a very satisfactory performance underpinned by positive volume development in the period.  The Group's fertiliser operations in the United Kingdom benefited from strong buying interest against the background of stable nutrition pricing and the favourable outlook for output prices.

In Ireland, fertiliser volumes were marginally lower than the comparable period last year as near perfect grass growing conditions led to reduced fertiliser application.  Feed ingredients volumes also trended lower compared with last year reflecting a combination of favourable weather, quality fodder availability and customers adopting a more cautious approach to volume commitments against the background of current high priced feed raw materials.

Associates and joint venture

The Group's strategic interests in Consumer Foods and Marine Proteins and Oils performed well during the period.

-     Valeo Foods Group Limited ('Valeo')

Nothwithstanding the very challenging environment for consumers Valeo continues to record sustained month-on-month performances.  Successful channel expansion together with new product development and targeted promotional support activity ensures that Valeo's categories remain fully aligned with consumers' current spending patterns.  The integration of Origin Foods and Batchelors is progressing very satisfactorily.

-     Welcon Invest As ('Welcon')

Welcon performed in line with the strong comparative period last year benefiting from positive finished product price development during the quarter.  Demand for fishmeal and fish oil is expected to remain strong for the remainder of the financial year whilst raw material intake will be lower, reflecting reduced quotas in line with the current year fisheries management policy.

Outlook

The outlook for the final quarter of the Group's financial year to 31 July 2011 remains positive and the Group is comfortable with consensus market estimates of ten per cent growth in adjusted fully diluted EPS to c.41 cent per share.

ENDS

Enquiries:

Origin Enterprises plc

Brendan Fitzgerald, Chief Financial Officer                                Tel:       [phone]

Murray Consultants

Joe Murray                                                                               Tel:       [phone]

                                                                                                Mobile: [phone]

About Origin Enterprises plc

Origin Enterprises plc is a focused Agri-Services group providing on-farm integrated agronomy advice and the supply of agri-inputs.  The Group also has strategic investments in consumer foods and marine proteins and oils.  The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom and Poland has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients.  The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges. 

ESM ticker symbol: OIZ

AIM ticker symbol: OGN

Website: www.originenterprises.com

 

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