19th Jul 2016 07:33
LONDON (Alliance News) - Agriculture, food and engineering company Carr's Group PLC on Tuesday said overall trading continues to be in line with the board's expectations in the year so far.
Within the agriculture business, Carr's said feedblocks performed "very well" in the 20 weeks to July 19, driven primarily by "excellent" volume growth in the US, although feedblock sales volumes in the UK were down slightly due to challenges in the agriculture market. This also contributed to a "less than 1%" fall in feed sales, although the business gained market share in the UK.
Also within agriculture, machinery sales declined in the year-to-date due to a reduction in farm incomes and lack of confidence in the short-term prospects for farming, Carr's said, adding that it doesn't expect this to change in the near term and will likely continue in the next financial year as well.
The Country Store network, however, performed well with retail sales up year-on-year and above management expectations. This was thanks to the product offering and geographic reach of the Country Stores throughout south Scotland and northern England, Carr's said.
The oil distribution business also achieved sales volume growth in the period.
Meanwhile in the food division, underlying volume was ahead by 1.6% on the prior year, Carr's said, adding that the company's approach to risk management enabled it to minimise the impact of the significant volatility which it saw in the wheat market.
Within the engineering division, the UK manufacturing business continued to suffer from the downturn in the oil and gas sector, but did benefit from the ongoing resurgence in the nuclear sector, Carr's said, while the remote handling business is on track to deliver its second robot, Sally, to nuclear fuel reprocessing site Sellafield by the year-end.
Sally has been designed to assist in the removal of high-level toxic nuclear waste at the site. Carr's won a contract with Sellafield worth GBP48 million earlier this year, under which it will design and manufacture Sellafield's highest complexity vessels for the next 10 years.
Carr's did say, however, that the overall performance of the engineering division will be behind the board's expectations for the full year, due to previously-mentioned contract delays. This should be offset by better-than-expected results elsewhere in the group though, Carr's said, adding that the long-term prospects of the engineering division have been notably strengthened with the new Sellafield contract.
"The group continues to operate in difficult and challenging markets and this has inevitably been exacerbated by the uncertainty triggered by the result of the recent EU referendum. However, the board remains confident that it is well-placed to respond to these challenges, and to take advantage of any opportunities that may arise from the changing markets," Chief Executive Tim Davies said in a statement.
"Carr's continues to benefit from the broad diversity of its product offering and geographic spread with a significant proportion of profits generated outside of the UK. The group is focused on generating organic growth, reviewing acquisition opportunities and driving innovation through research and development. The board remains confident of meeting its full-year financial expectations," he added.
Carr's will release its results for the year ending September 3 on November 14.
Shares in Carr's were down 1.8% to 139.00 pence early Tuesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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