7th Jan 2020 09:10
(Alliance News) - Carr's Group PLC said Tuesday its group performance in the 18 week period to last Saturday was in line with management expectations but its Agriculture unit struggled.
The farm supplies firm said its Agriculture performance in the same period was behind board expectations, due to the "mild weather". The company said the Agriculture markets have "remained challenging".
"In the UK, lower cattle prices, downward pressure on milk prices and rising input costs have contributed to pressure on farm incomes which, combined with continuing Brexit uncertainty, has resulted in reduced levels of farmer confidence," the Carr's explained.
The Carlisle-based firm said the "unseasonably mild and dry weather" added further pressure to the unit, resulting in less spend by farms on feed and animal supplements.
In the US, the Agriculture unit had to deal with reduced cattle prices and a delayed start to winter feeding, resulting in lower demand. Carr's noted market conditions have begun to improve.
"Following a period of sustained drought most USA states now have sufficient moisture to sustain grass growth, which is positive in the medium term for our USA feed block business," the company added.
Turning to the Engineering unit, Carr's said it experienced a "slow start" to the year - due to contract phasing - but it expects its full year performance to be slightly ahead of board expectations on the back of its strong pipeline.
Chief Executive Tim Davies added: "Despite a challenging start to the year in our Agriculture division, due to a number of weather and market factors, we are confident in the medium-term prospects for Agriculture. These near-term challenges in Agriculture are expected to be offset by a stronger than expected performance in our Engineering business, where the order books remain strong, in addition to lower central costs. Our investments in people, acquisitions and research, alongside our expanding international footprint, leave us well positioned for sustained growth."
Carr's said it ended the period in a strong financial position, with net debt at November 30 of GBP29.7 million, up from GBP23.8 million at the end of August. The company also noted shareholders will vote on Tuesday.
The company will report it results for the 26-week period ending February 29 on April 15.
Shares in Carr's Group were down 4.5% in London on Tuesday morning at 148.00 pence each.
By Paul McGowan; [email protected]
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