Carrs Group Regulatory News (CARR)

19 Jul 2005 15:07

Carr's Milling Industries PLC19 July 2005 CARR'S MILLING INDUSTRIES PLC Acquisition of Animal Feed Business / Trading Update / Preliminary Announcement Date Acquisition Carr's the Cumbria-based agriculture, food and engineering group, announces thatits 49% owned animal feed manufacturing associate company, Carrs BillingtonAgriculture (Operations) Limited ("CBAO"), has acquired certain fixed assets(mainly freehold land and buildings, plant and machinery), plus useable stocksand trade debtors, of W&J Pye Limited (in administration) of Lancaster. Pye ownsfour compound feed mills in the North West of England (at Blackburn, Lancaster,Langwathby and Shrewsbury) and one blended feed mill (at Lancaster). Sales willbe effected through Carr's 51% owned subsidiary company, Carrs BillingtonAgriculture (Sales) Limited ("CBAS"). The consideration for the fixed assets, stock and debtors is approximately £16.0million and is payable in cash, financed out of CBAO's and CBAS' new bankfacilities. Reflecting the considerable overcapacity in the compound and blended animal feedindustry , a process of rationalisation will be undertaken. In the remainder of the current financial year, the acquisition will beloss-making for the Group and generate an exceptional rationalisation charge. Inthe first full year of operation, however, the acquisition is expected to beearnings enhancing to the Group. Trading Update Carr's announces that its existing businesses remain on track to meet marketexpectations. As was indicated was likely in the Interim Announcement of 19 April 2005, ourfood business, comprising three flour mills, is performing well. Deliveries tothe McVities biscuit factory in Carlisle, interrupted by the floods of 8 January2005, resumed in April and are now at an increased level. The Meneba UKbusiness, with its two flour mills, acquired in November 2004, has been fullyintegrated with Carr's Flour Mills, more than doubling previous volumes, and isperforming above expectations. Also as we predicted, Agriculture is doing less well than last year . Compoundand blended feed volumes are lower than last year and margins continue to beunder pressure due to intense competition and over-capacity in the market place.Low moisture feed block turnover is growing in the UK and steady in the USA. Engineering is on track to make its first trading profit since 1999. Bendall'smove to a more efficient factory, at Kingstown Industrial Estate, Carlisle,following the sale of the London Road, Carlisle site at an exceptional profit of£4.0m in October 2004, is expected to be completed by the end of July 2005.Carrs MSM is trading above expectations and is expanding its market. Preliminary Announcement Date Carr's 2005 Preliminary Announcement is expected to be made in the latter partof November. Enquiries: Carr's Milling Industries PLC 01228-554 600Chris Holmes (Chief Executive Officer)Ron Wood (Finance Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock Exchange