Trading Statement

Carr's Milling Industries PLC 14 February 2007 Wednesday 14 February 2007 CARR'S MILLING INDUSTRIES PLC Trading Statement Carr's, the Cumbria-based Agriculture, Food and Engineering group, proposes to announce its results for the 26 weeks to 3 March 2007 on 23 April 2007. The Board expects these results to report a reduction in Group profit before tax compared to last year. Food and certain parts of our Agriculture Division are experiencing market-related difficult times, but the low moisture feed block businesses, particularly in the USA, and Engineering are trading well. Since the AGM on 9 January 2007, the UK market has resisted a flour price increase predicated on a massive increase in wheat prices, combined with higher energy costs. With little change envisaged in the foreseeable future, we therefore expect a significant deterioration in our flour margins. We continue to action cost reductions, where possible without jeopardising the high quality flours produced at our three mills. In Agriculture, the higher cost of raw materials (in particular, wheat) and energy for our compound feed business is not fully offset by increases in sales prices, culminating in lower margins. The farm gate milk price received by our dairy farming customers remains unsustainably low, with no certainty of a change in the coming months, exaccerbated by delays in receipt of the Single Farm Payment. Accordingly, we anticipate, at this early stage of the peak selling season, that farmers will hold off fertiliser purchases and therefore our sales will be down year-on-year, with lower margins. Feed block revenue in the US and the UK is ahead of budget and of last year. The new feed block plant to manufacture Crystalyx in Germany, with our joint venture partner, is expanding its market and trading ahead of expectations. The other joint venture feed companies established in 2006, Bibby Agriculture in Wales and Afgritech in England, have traded well. Indeed, the results from the new plant at Langwathby (Cumbria), to produce by-pass protein for ruminant animals, is opening new markets and the outlook is encouraging. The acquisition of Johnstone Fuels, based in SW Scotland, was completed in January 2007 and complements our Wallace Oils business, which operates in NW England and SW Scotland. The Engineering Division is trading slightly ahead of budget. Bendalls' fabrication for the SeaGen next generation tidal energy device is complete. Its installation in Strangford Lough is expected later this year. In January 2007, at the time of the AGM, the Board recognised that a ninth successive annual increase in adjusted Group profit before tax would be challenging but feasible. Events in the market place over the past five weeks have now caused the Board to reconsider this view and a reduction in Group profit before tax compared to market expectations for the year to 1 September 2007 is now expected. Enquiries: Carr's Milling Industries plc 01228-554 600 Chris Holmes (Chief Executive Officer) Ron Wood (Finance Director) Bankside Consultants Limited Charles Ponsonby 020-7367 8851 charles.ponsonby@bankside.com This information is provided by RNS The company news service from the London Stock Exchange
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