Carrs Group Regulatory News (CARR)

21 Nov 2005 07:01

Carr's Milling Industries PLC21 November 2005 CARR'S MILLING INDUSTRIES PLC - PRELIMINARY ANNOUNCEMENT Carr's the Cumbria-based agriculture, food and engineering group, announces ayear of major expansion and a seventh successive annual increase in adjustedearnings per share in the 53 weeks ended 3 September 2005. Financial Highlights •Turnover increased by 23.4% to £192.1m. •Disregarding an exceptional net gain of £2.88m, operating profit increased by 26.9% to £7.33m, pre-tax profit was 19.8% ahead at £6.14m and earnings per share advanced by 19.5% to 47.7p. •The exceptional net gain of £2.88m comprised a gain of £4.11m on the disposal of the Bendall's site in Carlisle and charges of £0.35m and £0.89m for the post-acquisition rationalisation of the acquired Meneba (UK) and W & J Pye businesses. •The reported figures were a pre-tax profit of £9.02m (2004: £5.13m) and earnings per share of 87.5p (2004: 39.9p). •Net assets per share increased by 21.1% to 360.5p. •Dividends per share of 16.0p, up 18.5%, are proposed, including a final dividend per share of 11.0p, up 22.2%. Commercial Highlights •The major expansion principally comprised the acquisition of Meneba (UK) in November 2004, more than doubling the size of Carr's flour business, and in mid July 2005 the acquisition by Carr's associate company, Carrs Billington Agriculture (Operations), of certain assets of W&J Pye (in Administration), nearly doubling volumes of compound and blended animal feed. •Agriculture achieved an operating profit of £5.17m before reorganisation costs (2004: £5.73m) on a turnover of £132.6m (2004: £124.4m). The profit reduction occurred entirely in the associate. Animal feed suffered from overcapacity in the North of England (since reduced by Carr's actions), but fertiliser and retail performed well. The UK agriculture market is currently very challenging, but the Pye integration has been successfully completed. •Food increased its operating profit substantially to £2.22m before reorganisation costs (2004: £0.27m) on turnover more than doubled at £48.0m (2004: £22.0m). All three mills performed well, the integration proceeded successfully, and a strong market presence in the northern part of the UK has been established. Food is currently trading strongly in a market which continues to be satisfactory. •Engineering made a profit of £0.28m (2004: loss of £0.01m) on turnover up 23.0% at £11.5m (2004: £9.3m) and is on an upward trend. Richard Inglewood, Chairman, stated "The Board believes that, in the year ending2 September 2006, the expanded business will make further good progess." Lunchtime Presentation: Today, Monday 21 November, from 13:00 to 14.00, Carr's will be presenting tobrokers' analysts, over a sandwich lunch, at the offices of BanksideConsultants, 1 Frederick's Place, London EC2R 8AE. Those wishing to attend areasked to notify Bankside Consultants. Enquiries: Carr's Milling Industries plc 01228-554 600Chris Holmes (Chief Executive Officer)Ron Wood (Finance Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 charles.ponsonby@bankside.com CHAIRMAN'S STATEMENT In my first Chairman's Statement, it is a particular pleasure to convey furthergood news. The period ended 3 September 2005 was one of major expansion for theGroup. In November 2004, the acquisition of Meneba (UK) more than doubled thesize of Carr's flour business, and in July 2005 the acquisition by our associatecompany, Carrs Billington Agriculture (Operations), of certain assets of W&J Pye(in Administration) nearly doubled volumes of compound and blended animal feed.In addition, Crystalyx Products, a feed block joint venture, was established inGermany and a Carlisle-based fuel oil distributor, Wallace Oils, was acquired. The year also witnessed a seventh successive annual increase in adjustedearnings per share. Prospects for further progress remain good. FINANCIAL REVIEW The figures in this paragraph take no account of exceptional items. In the 53weeks (2004: 52 weeks), on turnover up 23.4% at £192.1m (2004: £155.7m), totaloperating profit increased by 26.9% to £7.33m (2004: £5.78m), whilst pre-taxprofit was 19.8% ahead at £6.14m (2004: £5.13m). Adjusted earnings per shareadvanced by 19.5% to 47.7p (2004: 39.9p). Exceptional items comprise a gain of £4.11m on the disposal of the Bendall'ssite and charges of £0.35m and £0.89m for the post-acquisition rationalisationof the acquired Meneba and Pye businesses respectively, a net gain of £2.88m.The net cash inflow to the Group from these exceptional items was £0.54m. After exceptional items, the reported figures were a pre-tax profit of £9.02m(2004: £5.13m) and earnings per share of 87.5p (2004: 39.9p). Period end equity shareholders' funds increased by 23.2% to £29.61m (2004:£24.04m), representing net assets per share of 360.5p (2004: 297.7p). Net debtof £14.92m compared with £5.76m at 28 August 2004, giving gearing of 50.4% and24.0%, respectively. This reflects the £8.75m of cash required to fund theMeneba acquisition and the £1.32m initial cash consideration for the Wallaceacquisition. Net interest payable of £1.19m (2004: £0.65m) was covered 6.2 times(2004: 8.9 times) by total operating profit before exceptional items. DIVIDENDS A final dividend per share of 11.0p (2004: 9.0p), up 22.2%, is proposed, payableon 19 January 2006 to shareholders on the register at close of business on 16December 2005, with an ex-dividend date of 14 December 2005. Together with the interim dividend per share of 5.0p (2004: 4.5p), totaldividends per share are 18.5% higher at 16.0p (2004:13.5p), covered 3.0 times(2004: 3.0 times) by adjusted earnings per share. The AGM will be held at 11.30 a.m. on Monday 9 January 2006 at the Crown Hotel,Wetheral, Carlisle. BOARD Sadly, David Newton resigned from the Board, because of illness, at the time ofthe Interim Announcement in April 2005, having been non-executive Chairman sinceApril 1996. David made a major contribution to the Group's growth during histime on the Board, for which we are all grateful. We wish him every good fortunein his retirement. In September 2005, I was appointed his successor, having been a non-executivedirector since September 2004. At the same time, Alistair Wannop was appointed a non-executive Director,bringing the number of non-executive Directors to three. Alistair is a majorfigure in Cumbrian agriculture and brings to the Board expertise in bothagriculture and food. BUSINESS OVERVIEW This has been a significant period for Carr's, which included major acquisitionsstrengthening our position in both the food and agriculture markets. It is atestament to the underlying strength of our business that it continued toperform well during this busy period. We are especially pleased with theperformance of our food business which, despite flooding at a major customer'spremises in Carlisle in January 2005 and a serious fire at another customer onemonth later, successfully integrated the Meneba business, with its two mills atKirkcaldy (Fife) and Maldon (Essex). In July 2005, the Pye acquisition, comprising four compound feed mills and oneblended feed mill, enabled a certain amount of rationalisation in animal feedproduction which was commercially necessary. The integration of this businesswith Carrs Billington Agriculture (Operations) has been successful and weanticipate benefits to be forthcoming in 2006. Another major event late in the period was the disposal of the site from whichBendalls Engineering operated and its relocation to a newly built factoryelsewhere in Carlisle, together with the purchase of new equipment. The movetook place during June and July 2005 and was completed with minimal disruptionto our production timetable and our customers. In September, post the period end, we formed a joint venture company withWynnstay Group PLC and Welsh Feed Producers Limited to market and sell animalfeed, fertilisers and other farm requirements in Wales. Carrs interest in thejoint venture is 50%. AGRICULTURE Feed Operating profit of £5.2 million before reorganisation costs of £0.89 million(2004: £5.7 million) was achieved on a turnover of £132.7 million (2004: £124.4million). The Group's animal feed business comprises (in association with EdwardBillington & Sons Limited) the UK manufacture of animal feeds by CarrsBillington Agriculture at Carlisle (Cumbria), Langwathby (Cumbria), Lancaster(Lancashire) and Stone (Staffordshire) and the blending of animal feeds atAskrigg (North Yorkshire), Kirkbride (Cumbria) and Lancaster. The market for ruminant animal feeds was difficult last year, with severemanufacturing over-capacity in the north of England, resulting in margins beingunder constant pressure. This resulted in reduced profits of our own feedbusiness and that of our associate company, Carrs Billington Agriculture(Operations). Our share of the associate company result was also affected byreorganisation costs amounting to £0.89 million. In testing trading conditions, it is important that we adhere to our strategyand seize opportunities that secure our trading position. Accordingly on 15 July2005, our associate company acquired certain trade and assets of W & J PyeLimited (in Administration) and immediately initiated a consultation processwith the management to restructure the business. Following consultation, it wasagreed to cease production at the acquired Blackburn and Shrewsbury feed millsin addition to our feed mill at Penrith. The retained business was transferredto our newly acquired feed mills in Lancaster and Langwathby and also to ourexisting feed mills at Carlisle and Stone. On 1 October 2005, subsequent to the period end, we formed a joint venturecompany, Bibby Agriculture Limited, with Carrs Billington Agriculture (Sales)being a 50% shareholder, and Wynnstay Group PLC and Welsh Feed Producers Limitedeach having a 25% shareholding. Bibby Agriculture Limited will market animalfeed, fertiliser and other farm requirements in Wales with the feed suppliedfrom the three shareholders' mills. In the USA our two low-moisture animal feed block plants, at Belle Fourche,South Dakota and Poteau, Oklahoma, manufacture Smartlic and Feed in a Drum.During the period, they traded with large cost increases in the base rawmaterial, molasses. During the period, we also commenced marketing our range ofequine products, Horslyx, which is successfully sold in the UK, to the USAmarket, resulting in high initial promotional costs. Consequently, the resultsare lower than last year. However, the raw material cost increases are nowrecovered and, with lower marketing costs associated with Horslyx, we expectprofit growth in the current year. In the UK, the growth of our speciality equine and calf products continued. InFebruary 2005, Horslyx Mini Licks, a treat for horses, was launched. Sales ofCrystalyx continue to benefit from the adjacent molasses terminal facility tothe plant at Silloth in Cumbria. In December 2005, we will commission a new low-moisture animal feed plant tomanufacture Crystalyx in Oldenburg, Germany with our 50% joint venture partner,Agravis, one of Germany's largest agricultural companies. We look forward togrowing new markets in continental Europe. Fertiliser The fertiliser business performed well, with sales volumes of specialityfertilisers increasing and those of traditional fertiliser similar to last year.The investment programme to upgrade the production facilities at our threeblending sites - Invergordon (Easter Ross), Montrose (Angus) and Silloth(Cumbria) - following the restructuring in 2003 was completed during the period,giving higher capacity to meet seasonal demand. The commitment to developing fertiliser products and services appropriate tofarming needs, post-CAP Reform, is reflected in increasing sales of our uniquerange of environmentally protective fertiliser, New Choice. Through suchdevelopments, Carr's is well placed to provide farmers with a whole-farm,integrated approach to nutrient management covering all aspects of the soil/plant/ animal cycle. Retail Again, we enjoyed a strong performance from our existing 14 retail agriculturalbranches, operating from Milnathort in Kinross to Leek in Staffordshire, withsales growth of 7%. We gained five branches from the Pye acquisition which willhelp achieve our aim of continued growth in retail. Our branches sell a wideproduct range to farmers with our ultimate aim of providing a one stop shopsupplying everything from combine harvesters, tractors, feed, fertiliser, grassseed and wellington boots, through to animal health products and minerals. Oil Pursuing our aim of growing the business and expanding our portfolio, WallaceOils was acquired in April 2005. Wallace Oils operates from three depots inCumbria and south west Scotland and supplies oils and lubricants to a broadcustomer base. Cross-selling opportunities are presented with both CarrsBillington Agriculture (Sales) and Carrs retail branches. The full impact ofthis acquisition will be seen in the current year. Machinery Carrs Machinery distributes new and used agricultural and ground care machineryfrom branches in Annan (Dumfriesshire), Carlisle and Penrith (Cumbria), Hexhamand Morpeth (Northumberland) and Barnard Castle (County Durham). These brancheshave modern workshops and provide a comprehensive store of spare parts. Our sales expectations were again beaten, albeit at a lower level of sales andprofit than the previous year. FOOD Operating profit from the enlarged Food Division was £2.2 million beforereorganisation costs of £0.4 million (2004: £0.3 million) on a turnover of £48.0million (2004: £22.0 million). Carr's principal food businesses are Carr's Flour Mills, with a flour mill atSilloth, and, since November 2004, the two flour mills acquired, Hutchisons atKirkcaldy (Fife) and Greens at Maldon (Essex). The Silloth mill experienced athree month loss of flour sales as a result of the flooding at McVitie's biscuitfactory in Carlisle on 8 January 2005. The impact of the loss of trade waspartly compensated by our insurance programme. In addition, a serious fire at acustomer's plant bakery, also in Carlisle, in February resulted in a total lossof flour sales. The bakery is not expected to re-open. Notwithstanding these events, the Silloth mill performed well, as did theacquired mills. The integration of the enlarged flour business has gone well andthe business has a strong market presence in the northern area of the UK and hasincreased its market in the supply of speciality mixes. The results of theacquisition in the nine months have been earnings enhancing, notwithstandingreorganisation costs of £0.35 million, and are ahead of expectations. The benefits next year of a full year's trading of Greens and Hutchisons,combined with the implemented cost savings, should outweigh the severe increasesin energy costs. The Carrs Breadmaker flour brand range continues to sell well, with listings inthree major multiple retailers. ENGINEERING Operating profit from the Engineering Division was £0.3 million (compared to asmall loss in 2004) on a turnover of £11.5 million (2004: £9.3 million). Engineering comprises Bendalls and R Hind, both of which operate fromindependent sites on the Kingstown Industrial Estate, Carlisle, and Carrs MSM,which is based in Swindon in Wiltshire. Bendalls designs and manufacturesspecialist steel fabrications for the global petrochemical, nuclear, renewableenergy and process industries. R Hind provides vehicle body building andaccident repairs for cars and commercial vehicles. Carrs MSM designs andmanufactures master slave manipulators, which are key components for manyindustries but notably the nuclear industry. In the period, the Engineering division returned to profit. Bendalls performed well and enjoyed a steady flow of work throughout the period.The high quality of fabrication work for the nuclear and the oil industries wonmany new contracts, not least a contract to supply pressure vessels to BP forthe Caspian Sea offshore oil development. The sale of the London Road site in Carlisle and relocation of the division tothe new purpose built 5,000 square metres factory on the Kingstown IndustrialEstate, Carlisle should give Bendalls the opportunity of winning contracts fromwhich its previous premises would have excluded it from tendering. The gain onthe disposal in October of the site was £4.1m and the net cash retained byBendalls was £1.3m after incurring the cost of equipping the new factory andrelocating. Bendalls involvement in renewable energy is ongoing, with the tidal energyproject, "SeaGen", expected to be commissioned and connected to the nationalgrid in the second half of 2006. The project has suffered from delays in releaseof government funding resulting in late completion of front end designactivities. Carrs MSM had a good year and entered the current year with a strong order book. R Hind improved over the previous year and should make steady progress thisyear. OUTLOOK Agriculture Prospects for Agriculture will benefit from the successful integration of thecompound and blended feed operations of Carrs Billington Agriculture with thoseof the Pye acquisition. Additionally, we are confident that the strategy we havefollowed will provide real benefits. However, the UK Agriculture business willhave to contend with challenging market conditions made more difficult by theuncertainty and damage to farmers' cash flow directly caused by changes in thesupport regime. Food Flour is trading strongly in a market which continues to be satisfactory. Flourwill benefit from the successful integration of the Carr's Flour Milling andMeneba operations and from the effect of a full-year's ownership of the latter. Engineering Engineering, much the Group's smallest activity, is on an upward trend, but itscontinuing success is likely to be influenced significantly by the extent ofBendalls success in winning nuclear decommissioning work from British NuclearFuels Limited, for which prospects are good. Overall The Board believes that, in the period ending 2 September 2006, the expandedbusiness will make further good progress. Richard InglewoodChairman 21 November 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the 53 week period ended 3 September 2005 3 September 28 August 2005 2004 £000 £000TurnoverContinuing operations 158,876 155,749Acquisitions - Meneba UK Holdings Limited 26,299 -- Wallace Oils Holdings Limited 6,949 - ______ ______Group turnover 192,124 155,749 ______ ______ Group operating profitContinuing operations 6,129 5,036Acquisitions - Meneba UK Holdings Limited 782 - - Wallace Oils Holdings Limited (95) - ______ ______Group operating profit 6,816 5,036 Share of operating (loss)/profit in associate (720) 739 ______ ______ Total operating profit: group and share ofassociate 6,096 5,775 Profit on disposal of fixed assets 4,110 - ______ ______ Profit on ordinary activities before interest 10,206 5,775Interest receivable Group 93 116 Interest payable Group (1,185) (691) Associate (98) (73) ______ ______ Profit on ordinary activities before taxation 9,016 5,127 Taxation Group (1,912) (1,498) Associate 287 (135) ______ ______ Profit on ordinary activities after taxation 7,391 3,494 Minority interests - equity (276) (275) ______ ______ Profit for the financial period 7,115 3,219 Dividends (1,313) (1,090) ______ ______ Retained profit for the financial period 5,802 2,129 ______ ______ Earnings per ordinary shareBasic 87.5p 39.9pDiluted 85.9p 39.8pAdjusted 47.7p 39.9pDividend per share 16.0p 13.5p CONSOLIDATED BALANCE SHEET at 3 September 2005 3 September 28 August 2005 2004 £000 £000Fixed assets Intangible assets Goodwill and others 534 184Negative goodwill (539) - ______ ______ (5) 184 Tangible assets 30,232 20,474 Investments Share of net assets in associate 1,461 1,992Investment in joint venture 172 -Loan to associate 1,225 1,225Other investments 255 253 ______ ______ 33,340 24,128 Current assetsStocks 12,947 10,387Debtors 34,977 19,943Cash at bank and in hand 3,149 1,091 ______ ______ 51,073 31,421 CreditorsAmounts falling due within one year (43,230) (25,265) ______ ______ Net current assets 7,843 6,156 Total assets less current liabilities 41,183 30,284 CreditorsAmounts falling due after more than one year (8,501) (3,779)Provision for liabilities and charges (1,226) (951)Deferred income (185) (244) _____ _____ 31,271 25,310 ______ ______ Capital and reservesCalled-up share capital 2,053 2,018Share premium account 4,977 4,752Revaluation reserve 1,632 1,663Profit and loss account 20,952 15,605 ______ ______ Equity shareholders' funds 29,614 24,038Minority interests - equity 1,657 1,272 ______ ______ 31,271 25,310 ______ ______ CONSOLIDATED CASH FLOW STATEMENT for the 53 week period ended 3 September 2005 3 September 28 August 2005 2004 £000 £000 Net cash inflow from operating activities 6,644 6,256 ______ ______ Returns on investments and servicing of financeInterest received 95 120Interest paid (1,061) (563)Interest paid on finance leases (134) (88) ______ ______ Net cash outflow from returns on investments andservicing of finance (1,100) (531) ______ ______ Taxation (1,855) (1,330) ______ ______ Capital expenditure and financial investmentPurchase of tangible fixed assets (3,396) (2,997)Purchase of intangible fixed assets - (160)Sale of tangible fixed assets 3,114 295Purchase of investments (2) (100) ______ ______ Net cash outflow from capital expenditure andfinancial investments (284) (2,962) ______ ______ Acquisitions and disposalsPurchase of subsidiary undertakings (6,957) -Net cash acquired in subsidiaries 2,071 -Loan repaid (5,370) -Investment in joint venture (172) - ______ ______Net cash outflow from acquisitions and disposals (10,428) - _____ ______ Equity dividends paid (1,137) (969) ______ ______ Cash (outflow)/inflow before financing (8,160) 464 ______ ______ Financing 11,749 (1,311) ______ ______ Increase/(decrease) in net cash 3,589 (847) ______ ______ NOTES 1. Segmental analysis Turnover Operating profit 2005 2004 2005 2004 £'000 £'000 £'000 £'000Business analysisAgriculture group 132,662 124,443 5,002 4,991 associate - - (720) 739Food 48,004 21,990 1,866 268Engineering (before exceptional item) 11,458 9,316 282 (14)Central - - (334) (209) ______ ______ ______ ______ 192,124 155,749 6,096 5,775 ______ ______ ______ ______ 2. Turnover, cost of sales and other operating income and net operating expenses 2005 2005 2004 2004 £'000 £'000 £'000 £'000 Turnover 192,124 155,749Cost of sales (161,532) (132,464) ______ ______Gross profit 30,592 23,285 Net operating expensesDistribution costs (13,196) (9,446)Administrative expenses- Normal (10,230) (8,803)- Exceptional (Note 3) (350) - ______ ______ (23,776) (18,249) ______ ______Group operating profit 6,816 5,036 Share of (loss)/profit in associate- Normal 165 739- Exceptional (Note 3) (885) - ______ ______ (720) 739 ______ ______Total operating profit: group and shareof associate 6,096 5,775 Exceptional items (as above) 1,235 - ______ ______Total operating profit: group and shareof associate (before exceptional items) 7,331 5,775 ______ ______ The total figures include the following amounts relating to acquisitions: costof sales £27,431,000 (2004: £nil), gross profit of £5,817,000 (2004: £nil) andnet operating expenses of £5,130,000 (2004: £nil). 3. Exceptional items 2005 2005 2004 2004 Tax Tax Amount Credit Amount Credit £'000 £'000 £'000 £'000 Cost of reorganising Food Division (350) 105 - -Cost of reorganising associate (885) 258 - - ______ ______ ______ ______Total exceptional operating expenses (1,235) 363 - -Profit on disposal of fixed assets 4,110 - - - ______ ______ ______ ______ Total exceptional items 2,875 363 - - ______ ______ ______ ______ 4. Taxation 2005 2004 £'000 £'000United Kingdom Current period at 30% (2004: 30%) 1,797 1,428Prior period 24 (47)Foreign TaxCurrent period 270 287Prior period - (2) ______ ______ Group current tax 2,091 1,666 AssociateCurrent period (119) 143 ______ ______Total current tax 1,972 1,809 Deferred taxOrigination and reversal of timing differencesGroup (179) (168)Associate (168) (8) ______ ______Tax on profit on ordinary activities 1,625 1,633 ______ ______ 5. Dividends 2005 2004 £'000 £'000 Equity:Ordinary - Interim paid of 5.0p per share (2004: 4.5p) 410 363 - Final proposed of 11.0p per share (2004: 9.0p) 903 727 ______ ______ 1,313 1,090 ______ ______ 6. Earnings per share The calculation of basic earnings per share is based on profit attributable toshareholders of £7,115,000 (2004: £3,219,000) and on 8,127,328 shares (2004:8,073,599 shares), being the weighted average number of shares in issue duringthe period. The calculation of diluted earnings per share is based on the profit for thefinancial year of £7,115,000 (2004: £3,219,000) and on 8,285,919 shares (2004:8,086,150 shares) being the weighted average number of shares in issue duringthe year plus the weighted average number of ordinary shares that would beissued on the conversion of all the dilutive potential ordinary shares. The calculation of earnings per share on the adjusted basis (includingacquisitions) is based on the profit for the financial year of £7,115,000adjusting for exceptional items of £2,875,000 and related tax credit of £363,000to give a profit for the financial year of £3,877,000 (2004: £3,219,000). 2005 2004 Earnings Earnings Earnings Per share Earnings Per share £'000 Pence £'000 Pence Earnings per share - basic 7,115 87.5 3,219 39.9 Exceptional items:Cost of reorganising FoodDivision 350 4.3 - -Cost of reorganising associate 885 10.9 - -Profit on disposal of fixedassets (4,110) (50.5) - -Taxation arising on exceptionalitems (363) (4.5) - - ______ ______ ______ ______Earnings per share - adjusted 3,877 47.7 3,219 39.9 ______ ______ ______ ______ 7. Cash flow from operating activitiesContinuing operations 2005 2004 £'000 £'000 Group operating profit 6,816 5,036Depreciation charge 3,261 2,367Profit on disposal of fixed assets (125) (108)Amortisation of intangible assets (9) 38Grants amortisation (50) (59)Release of finance costs in accordance with FRS4 6 -Increase in stocks (1,009) (1,264)Increase in debtors (6,603) (1,447)Increase in creditors 4,357 1,860Decrease in provisions - (167) ______ ______ Net cash inflow from continuing operating activities 6,644 6,256 ______ ______ 8. Reconciliation of net cash flow to movement in net debt 2005 2004 £'000 £'000 Increase/(decrease) in cash in the period 3,589 (847)Cash (inflow)/outflow from debt and lease financing (11,489) 1,312 ______ ______ (7,900) 465Loans and finance leases acquired with subsidiaries (647) -New finance leases (597) (609)Release of finance costs under FRS4 (6) -Exchange adjustments (7) 1 ______ ______ (9,157) (143)Net debt at 28 August 2004 (5,758) (5,615) ______ ______ Net debt at 3 September 2005 (14,915) (5,758) ______ ______ 9. The board of directors approved the preliminary announcement on 18 November2005. 10. The accounts for the preliminary results for the period ended 3 September2005 are unaudited. The financial information set out in this announcement doesnot constitute the statutory accounts for the periods ended 3 September 2005 and28 August 2004. The financial information for the year ended 28 August 2004 isderived from the statutory accounts for that year which have been delivered tothe Registrar of Companies. The auditors reported on those accounts; theirreport was unqualified and did not contain a statement under either Section 237(2) or Section 237 (3) of the Companies Act 1985. The statutory accounts for theperiod ended 3 September 2005 will be finalised on the basis of the financialinformation presented by the directors in this preliminary announcement and willbe delivered to the Registrar of Companies following the Company's AnnualGeneral Meeting. 11. The Company intends to post the Report & Accounts to shareholders by 16December 2005. Further copies will be available upon request from the CompanySecretary, Carr's Milling Industries PLC, Old Croft, Stanwix, Carlisle, Cumbria,CA3 9BA or alternatively on the Company's website: www.carrs-milling.com This information is provided by RNS The company news service from the London Stock Exchange