Interim Results and CEO Succession

7 May 2025

CARR'S GROUP PLC

(''Carr's", the ''Company'', or the ''Group'')

INTERIM RESULTS AND CEO SUCCESSION

Strong, profitable growth in continuing operations

Significant progress towards pure-play specialist agriculture transformation,

with clear growth strategy and focus on delivering value

Carr's Group plc (CARR.L), announces its unaudited interim results for the six months ended 28 February 2025 ("H1 2025", "H1 FY25", or the "Period").

Financial Highlights:

· Agriculture Continuing Operations

· H1 FY25 revenues increased by 7.0% on prior year to £50.6m (H1 2024 restated: £47.3m)

· H1 FY25 adjusted operating profit increased by 33.4% to £7.0m (H1 2024 restated: £5.3m)

· UK low moisture block tonnage increased by 13% year on year whilst US volumes grew by 3% despite continued difficult market conditions

· Central costs

· Central costs, on an adjusted basis, of £1.1m (H1 2024: £1.6m)

· Ongoing cost reduction measures continue following Engineering disposals

· Adjusting items

· Continuing Operations: net £1.8m income of adjusting items (pre-tax) comprising:

§ £2.9m of gain on disposal of investment / non-core properties and related assets

§ £0.9m of restructuring costs

§ £0.2m costs relating to pension scheme buy-in

· Discontinued Operations: net costs of £0.7m relating to closure and sale of discontinued activities

· Net cash / debt

· Half year-end net cash of £15.7m (H2 2024: Net cash £8.0m) - prior to payment of final dividend for FY24

· Dividends

· Interim dividend of 1.2p per share (H1 2024: 2.35p) to be paid on 20 June 2025 to all shareholders on the register at close of business on 16 May 2025, irrespective of any later decision to participate in the Tender Offer

· Future dividend quantum distributed will increase at least in line with earnings through semi-annual payments reflecting the anticipated reduced shares in issue following the Tender Offer

Strategic highlights:

· Engineering Disposal:

· Completed the disposal of the larger part of the Engineering Division for £75m enterprise value on 22 April 2025

· Ongoing process to realise value for the remaining Chirton Engineering business

· Group Simplification:

· Completed the sale of 8 investment / non-core properties for £7m to date in FY25

· Completed the de-risking of its defined benefit pension scheme through a policy buy-in in January 2025

· Ongoing focus on central cost reduction through the rightsizing of central functions:

§ H1 adjusted central costs £1.1m vs H1 FY24: £1.6m

§ Engineering disposal allows further savings to be implemented

· Strategic transformation of Agriculture Division

· Focussed growth strategy as a global specialist in feed supplements for pasture-based livestock announced in December 2024

· Good progress made across each strategic driver of value creation:

§ Improve operating margin across current portfolio:

· Agriculture H1 adjusted operating margin of 13.9% vs 11.2% in prior period

§ Deliver profitable growth in core businesses:

· Volume of core low moisture block product sold in H1 up 6.7% on prior year

§ Expansion into new extensive grazing-based growth geographies:

· Opportunities in growing, counter seasonal, southern hemisphere geographies being actively assessed

· Structural under-performance and non-core activities addressed:

§ Non-core and loss making Afgritech business closed and sold in October 2024

§ Loss making New Zealand operations closed and third-party distributor appointed

§ Consultation over closure of loss-making Animax site in progress with outsourced production of boluses being developed

· Return of capital:

· A Tender Offer process to return up to £70m to shareholders will be initiated in the second half of May 2025 and is expected to conclude in early July (subject to shareholder approval)

· Board Change:

· As a result of the transformation into a pure-play Agriculture business, Group CEO David White will step down with effect from 30 June 2025, at which point Josh Hoopes, currently CEO Global Agriculture, will be appointed CEO for the business

Outlook

With dependence on agriculture markets across the northern hemisphere, in the short to medium term the performance of the Group will be more seasonal than prior to the disposal of the Engineering Division. Whilst we anticipate the positive trading momentum from the first half will continue, the second half of the year typically experiences lower seasonal trade across our markets which will moderate overall performance. In addition, completion of the main Engineering disposal will enable further reductions in central costs.

Trading conditions in the US, particularly in the southern states, remain challenging, largely due to climatic factors, with the anticipated recovery in US herd size likely to be later than the previously anticipated second half of 2025, impacting expected performance in FY26. Across all our markets, our strategic priority remains to deliver increased market share and margin enhancements through disciplined commercial execution.

David White, Chief Executive Officer of Carr's Group said:

"Today's interim results clearly demonstrate the benefits of our strategic transformation to a specialist agriculture manufacturer. During the period the Group has achieved significant milestones through the sale of the bulk of the Engineering Division, the development of a clear and refocused Agriculture strategy, with substantial progress made in corporate simplification through pension de-risking, sale of excess properties and ongoing central cost reduction.

I would like to thank current and former colleagues in the Engineering Division and Group functions for their hard work and dedication in delivering a successful realisation of value for the Engineering Division. With the planned return of capital to shareholders expected to complete in early July, the time is right to transition leadership to our CEO Global Agriculture, Josh Hoopes. As such I shall step down as Group CEO on 30 June 2025, at which point Josh will be appointed as CEO for the business. The Board has full confidence that under Josh's leadership and through execution of our refocused strategy the business can achieve significant profitable growth and drive shareholder returns. I wish him and the team every success as they pursue exciting opportunities that lie ahead."

Tim Jones, Chairman of Carr's Group said:

"The Company's transition into a pure-play specialist manufacturer of research proven, value-added livestock supplements is almost complete. I would like to thank David White for his role in expertly leading this transformation with clarity and pace. David's help in assembling and enabling the team of agriculture specialists to take the Company forward and in strengthening and de-risking our balance sheet - as our Interim results illustrate - perfectly positions us for the next phase of our strategy. Under Josh Hoopes' ongoing leadership we have every confidence in the delivery of that strategy and of the value that it can create.''

About Carr's Group plc:

Carr's is a pure-play specialist Agriculture manufacturer and provider of research proven, value-added livestock supplements such as feed licks, blocks, bagged minerals and boluses.

The business operates manufacturing sites across three different countries, selling expert-developed products under five globally respected and market leading brands to over 20 countries worldwide.

Interim Management Report

Strategic transformation as a pure-play specialist agriculture manufacturer

Following the decision to focus future growth on the Group's Agriculture strategy and to seek to realise value for the Engineering Division the Group announced the completion of the sale of the bulk of the Engineering Division to US Group, Cadre Holdings, Inc. on 22 April 2025. A process to realise value for the remaining Engineering business, Chirton Engineering, is progressing to plan.

The Group intends returning up to £70m proceeds of sale of the Engineering Division to shareholders through a tender offer process to be instigated shortly that will, subject to shareholder approval, be complete in early July.

The actions above, combined with the corporate simplification activities referred to below, leave the Group well positioned to pursue future growth through implementation of the focussed Agriculture strategy announced with our FY24 results in December 2024.

Following the successful transition of the Group to a single division focussed on Global Agriculture it is a suitable time for the business to be led by a management team with wide experience in the Agriculture sector, exclusively focussed on delivering the Group's Agriculture strategy. As such, on 30 June 2025, David White will step down as Group CEO and Josh Hoopes, who joined the Group as CEO Global Agriculture in March 2024, will become CEO of the business.

Renewed Agriculture Strategy

The Group will establish itself as a global leader in feed supplements for cattle, horses, sheep and goats. The Group's mission is to drive sustainable global food security through enhancements to pasture grazing productivity, enabled by research-based products that optimise livestock performance and profitability for farmers.

The Group's strategic framework is built upon three core strengths:

1. Global specialist in livestock supplements

2. Strategically located operations with local sales execution

3. Patented, research backed product portfolio

This strategic focus will deliver superior operating margin and return on capital employed. Value creation in the short to medium term will be achieved by:

1. Improving operating margins across the retained strategic portfolio

2. Delivering commercial growth through these core businesses

3. Expanding into new extensive grazing-based growth markets

Focus will be on delivering value to our customers and shareholders through our specialised, research-backed and trusted product portfolio of low moisture blocks, complemented by strategic distribution of other supplements like minerals and boluses. These will initially be supplied through our own production sites at Silloth and Ayr in the UK, Belle Fourche and Poteau in the US and through our joint venture partners in Germany and the US.

Opportunities for entry into key southern hemisphere growth markets are being actively explored, positioning the Group for sustained global expansion.

The early implementation of this strategy has seen the Group exit Afgritech, its loss-making US dairy feed business in October 2024, close its operations in New Zealand (moving to a third-party distribution model for that market) and enter consultation over the closure of its Animax production site in Suffolk, with subsequent option of outsourced bolus production.

Corporate Simplification

Key to delivery of a focussed and value generating Group is the simplification and right-sizing of Group operations following the disposal of both the Engineering Division in FY25 and the Agricultural Supplies Division in FY23.

In the current financial period, the Group has completed the purchase of a 'buy-in insurance policy' to de-risk its defined benefit pension scheme. This matches liabilities under the scheme with insured assets and provides Scheme members with security over their benefits.

Additionally, in the current financial year the Group has completed the disposal of a further eight investment / unused properties for consideration of £7m. These properties included the Group's former Head Office premises in Carlisle.

The disposal of the Engineering Division and the appropriate integration of the businesses comprising the Group going forward allow the continued reduction of Group central costs. Driving further cost efficiencies remains a key focus for the Board.

Engineering Disposal

Agreement for the disposal of the bulk of the Engineering Division to Cadre Holdings, Inc. for an enterprise value of £75m was announced on 16 January 2025. Following receipt of certain regulatory approvals and customer consents the sale completed on 22 April 2025.

Following settlement of relevant debt and transaction costs the Group received net cash consideration on completion of £68.6m with a further £1.5m due on settlement of related RDEC tax claims.

The Group is continuing the process to realise value for the remaining component of the Engineering Division, Chirton Engineering. This process is continuing satisfactorily.

Interim results

Continuing Operations

During the six months ended 28 February 2025 revenue from Continuing Operations increased 7.0% to £50.6m (H1 2024 restated: £47.3m) reflecting growth across both our operations in UK and US.

Adjusted operating profit of £5.9m represents an increase of 62.6% from the prior year (H1 2024 restated: £3.6m). Statutory operating profit of £7.7m represents an increase of 366.6% from £1.6m in the prior period.

Profit for the period from Continuing Operations of £6.1m (6.5pps) represents an increase of 246.6% on the prior period £1.8m (1.9pps)

Group

Profit for the period of £7.1m (7.5pps) represents a 150.3% increase on the prior year £2.8m (3.0pps)

Operational review

Continuing operations

*at constant exchange rate US revenue grew by 1.5%

UK Agriculture

UK Agriculture comprises the Group's Crystalyx® operations in Silloth, its Scotmin operations in Ayr and the Animax operations near Bury St Edmunds.

Following management integration across the three UK sites last year the business has benefited from more unified and strategic decision making on commercial and operational matters. Crystalyx® has performed particularly well with 13% volume growth, and given its strategic focus will form the driver of future market share gains and value creation. In our product portfolio Crystalyx® will be supported by the Scotmin product range and by a range of boluses similar to those currently produced in our Animax site. In March 2025 we entered consultation over the closure of the Animax site and anticipate switching to third party bolus production over the coming months. 

US Agriculture

US Agriculture represents the Group's New Generation Supplements ("NGS") feed blocks business.

Overall volume increased by 3% in the first half of the year however this net movement comprises a strong performance in the northern US from our Belle Fourche, South Dakota plant, offset by the combined impact of challenging market conditions experienced by our southern, Poteau, Oklahoma plant, and the impact of the closure of our Silver Springs, Nevada plant in December 2023 - which contributed to prior year volume and revenue. Revenue and EBIT were negatively impacted by currency movements of c2.1%.

A recovery plan for our Poteau plant is under development to deliver operational and commercial improvement.

Joint Ventures

The Group continues to target growth through its participation in joint ventures in selected geographies. In the first half the contribution from our joint ventures in Germany (1) and the US (2) was flat at £1.4m. We are yet to see the positive impact of installation of a second production line at the Gold Bar facility in the US and are working with our JV partner to realise the anticipated growth. EBIT contribution was negatively impact by currency movements of c2.5%.

Central

The reduction of central costs continues to be a focus. With progress having been made in the first half further reductions are planned as a direct consequence of the disposal of the Engineering Division and integration across the remaining Group. Net costs on an adjusted basis in the period reduced by 31% from £1.6m to £1.1m.

Balance sheet and cash flow

Cash generated from operating activities in continuing operations in the first half was £4.6m (H1 2024: £5.4m).

Excluding leases, the Group's continuing operations had net cash of £15.7m as at 28 February 2025. This was before both the finalisation of pension scheme de-risking which required payment into an escrow account of £4.5m cash and the sale of a property in the US realising $2.2m cash.

On 22 April 2025 the Group received £68.6m cash on settlement of the sale of the bulk of the Engineering Division. A further £1.5m will be received on settlement of certain RDEC tax claims.

The Group will instigate the return of up to £70m cash to shareholders through a tender offer process. The process is expected to be complete (subject to shareholder approval) by early July.

An interim dividend of 1.2 pence per ordinary share will be paid on 20 June 2025 to shareholders on the register on 16 May 2025. This dividend reflects the Group excluding those Engineering entities sold on 22 April 2025 whose contribution to current year trading is reflected in the return of capital via the tender offer. The ex-dividend date will be 15 May 2025.

Outlook

With dependence on agriculture markets across the northern hemisphere, in the short to medium term the performance of the Group will be more seasonal than prior to the disposal of the Engineering Division. Whilst we anticipate the positive trading momentum from the first half will continue, the second half of the year typically experiences lower seasonal trade across our markets which will moderate overall performance. In addition, completion of the main Engineering disposal will enable further reductions in central costs.

Trading conditions in the US, particularly in the southern states, remain challenging, largely due to climatic factors, with the anticipated recovery in US herd size likely to be later than the previously anticipated second half of 2025, impacting expected performance in FY26. Across all our markets, our strategic priority remains to deliver increased market share and margin enhancements through disciplined commercial execution.

Principal risks and uncertainties

The Group has a process in place to identify and assess the impact of risks on its business, which is reviewed and updated regularly. The principal risks and uncertainties for the remainder of the financial year, other than those impacted directly by the disposal of the Engineering Division are not considered to have changed materially from those included on pages 28 to 31 of the FY24 Annual Report and Accounts (available on the Company's website at www.carrsgroup-ir.com).

CONDENSED CONSOLIDATED INCOME STATEMENT

For the 6 months ended 28 February 2025

[1] Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting items are disclosed in note 8. An alternative performance measures glossary can be found in note 21.

2 Restated to provide comparable information for continuing and discontinued operations following the classification of the Engineering businesses and Afgritech LLC as disposal groups in the FY24 Annual Report and Accounts. Further details of results from discontinued operations and net assets relating to the disposal groups can be found in note 9.

3 See note 19 for an explanation of the prior period restatements to the period ended 29 February 2024.

 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 6 months ended 28 February 2025

[1] Restated to provide comparable information for continuing and discontinued operations following the classification of the Engineering businesses and Afgritech LLC as disposal groups in the FY24 Annual Report and Accounts. Further details of results from discontinued operations and net assets relating to the disposal groups can be found in note 9.

CONDENSED CONSOLIDATED BALANCE SHEET

As at 28 February 2025

[1] See note 19 for an explanation of the prior period restatements to the period ended 29 February 2024.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the 6 months ended 28 February 2025

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the 6 months ended 28 February 2025

Statement of Directors' responsibilities

The Directors confirm that these condensed consolidated interim financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

· an indication of important events that have occurred during the first six months of the year and their impact on the condensed set of interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

· material related party transactions in the first six months of the year and any material changes in the related party transactions described in the last Annual Report.

The Directors are listed in the FY24 Annual Report and Accounts with the exception of the following changes in the period: Shelagh Hancock stepped down from the Board on 31 December 2024, and former Executive Director of Transformation Martin Rowland was re-appointed Non-Executive Director on 13 November 2024. A list of current Directors is maintained on the website: www.carrsgroup.com

On behalf of the Board

Tim Jones David White

Chair Chief Executive Officer

7 May 2025 7 May 2025

Unaudited notes to condensed interim financial information

1. General information

The Group operates two divisions: Agriculture and Engineering. The Engineering Division was classified as a disposal group at year end 2024 and is disclosed as a discontinued operation throughout the condensed consolidated interim financial statements. The Company is a public limited company, which is listed on the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is Warwick Mill Business Centre, Warwick Bridge, Carlisle, Cumbria CA4 8RR.

These condensed interim financial statements were approved for issue on 7 May 2025.

The comparative figures for the financial year ended 31 August 2024 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

2. Basis of preparation

These condensed interim financial statements for the six months ended 28 February 2025 have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The annual financial statements of the Group for the year ending 31 August 2025 will be prepared in accordance with UK-adopted International Accounting Standards and the requirements of the Companies Act 2006. As required by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, this condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 August 2024 which were prepared in accordance with UK-adopted International Accounting Standards and the requirements of the Companies Act 2006 applicable to companies reporting under those standards.

The Group is expected to have a sufficient level of financial resources to operate for a period of at least 12 months from the signing date of these condensed consolidated interim financial statements. These financial resources are available through a combination of operating cash flows, cash generated from the sale of the Engineering Division and bank facilities. The Group's banking facilities remain in place until December 2026 but have been reduced following completion of the sale of the Engineering Division.

Detailed cash forecasts continue to be updated regularly for a period of at least 12 months from the reporting period end. These forecasts are sensitised for various worst case scenarios including reduction in customer demand and reliance on key customers; and supply chain constraints and delays impacting operations. The results of this stress testing showed that, due to the stability of the core Agriculture business, the Group would be able to withstand the impact of these severe but plausible downside scenarios occurring over the period of the forecasts.

In addition, several other mitigating measures remain available and within the control of the Directors that were not included in the scenarios. These include withholding discretionary capital expenditure and reducing or cancelling future dividend payments.

Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the signing date of these condensed consolidated interim financial statements. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim financial statements.

3. Accounting policies and prior period restatements

The accounting policies adopted are consistent with those of the previous financial year except for:

Taxation

Income taxes are accrued based on management's estimate of the weighted average annual income tax rate expected for the full financial year based on enacted or substantively enacted tax rates as at 28 February 2025. Our effective tax rate in respect of continuing operations as a percentage of adjusted tax to adjusted profit before tax excluding results from joint ventures was 24.2% (H1 2024: restated 22.0%). Joint ventures are excluded as they are reported net of tax.

3. Accounting policies and prior period restatements (continued)

Prior period restatements

The results and financial position of the Group for the period ended 29 February 2024 have been restated to reflect the impact of the prior period restatements recognised in the Annual Report and Accounts for the year ended 31 August 2024. Further details of these restatements can be found in note 19.

4. Significant judgements and estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 August 2024, with the exception of changes in estimates that are required in determining the provision for income taxes as explained in note 3. 

5. Financial risk management

The Group's activities expose it to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk.

The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 August 2024.

6. Operating segment information

The Group's chief operating decision-maker ('CODM') has been identified as the Executive Directors. Management has determined the operating segments based on internal financial information reviewed by the CODM for the purposes of allocating resources and assessing performance.

The CODM considers the business from a product/services perspective. Reportable operating segments of continuing operations have been identified as Agriculture. The previously reported operating segment of Engineering was classified as a disposal group at year end 2024 and is disclosed as a discontinued operation in the segmental reporting tables below. Disclosures for the period ended 29 February 2024 have been restated to aid comparability. Central comprises the central business activities of the Group's head office, which earns no external revenues. Disclosures for the period ended 29 February 2024 have also been restated to reflect the impact of the prior period restatements recognised in the Annual Report and Accounts for the year ended 31 August 2024. Further details can be found in note 19.

Performance is assessed using adjusted operating profit. For internal purposes the CODM assesses operating profit before material adjusting items (note 8) consistent with the presentation in the financial statements. The CODM believes this measure provides a better reflection of the Group's underlying performance. Sales between segments are carried out at arm's length. 

The following tables present revenue, profit, asset and liability information regarding the Group's operating segments for the six months ended 28 February 2025 and the comparative periods.

6. Operating segment information (continued)

6 months ended 28 February 2025

[1]  Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting items are disclosed in note 8.

2 Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-current assets and before share of post-tax results of joint ventures.

3 There were no inter segment revenues in the period ended 28 February 2025.

6. Operating segment information (continued)

The segmental information for the six months ended 29 February 2024 has been restated to present continuing operations and discontinued operations separately. This is to aid comparability with the segmental information presented for the current period and for the year ended 31 August 2024. Disclosures in respect of the period ended 29 February 2024 have also been restated in respect of the prior year adjustments identified in the FY24 Annual Report and Accounts. Further details of the prior period restatements can be found in note 19.

6 months ended 29 February 2024 (restated)

[1]  Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting items are disclosed in note 8.

2 Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-current assets and before share of post-tax results of joint ventures.

3 There were no inter segment revenues in the period ended 29 February 2024.

6. Operating segment information (continued)

Year ended 31 August 2024

[1]  Adjusted results are consistent with how business performance is measured internally and is presented to aid comparability of performance. Adjusting items are disclosed in note 8.

2 Earnings before interest, tax, depreciation, amortisation, profit/(loss) on the disposal of non-current assets and before share of post-tax results of joint ventures.

7. Disaggregation of revenue

The following table presents the Group's reported revenue disaggregated based on the timing of revenue recognition.

8. Adjusting items