Carrs Group Regulatory News (CARR)

6 Apr 2009 07:00



Monday 6 April 2009

CARR'S MILLING INDUSTRIES PLC - INTERIM ANNOUNCEMENT 

"Carr's performed well"

Carr's (CRM.L), the fully-listed agriculture, food and engineering group, announces an increased profit for the 26 weeks to 28 February 2009 relative to the 26 weeks to 1 March 2008, which was a strong period. 

Financial Highlights

Revenue up 8% to £174.5m (2008: £161.9m)

Pre-tax profit up 2% to £5.3m (2008: £5.2m)

Fully-diluted earnings per share down 15% at 37.2p (2008: 44.0p), reflecting an increased minority interest and the increase in the issued share capital

Interim dividend per share unchanged at 6.0p 

Commercial Highlights 

Agriculture increased its operating profit* by 9% to £4.4m on revenue up 10% at £130.2m and also reported a post-tax profit in associate and JVs down 23% at £0.8m. Animal feed, agricultural retailing and fuel distribution all did well

Food increased its operating profit* by 45% to £1.6m on revenue up 2% at £40.5m. Volumes and profit increased in all three mills and the result was in line with budget 

Engineering achieved an operating profit of £0.5m, up 3%, on revenue up 14% at £3.8m 

* before retirement benefit charge

Richard Inglewood, Chairman, stated "Carr's performed well in the 26 weeks to 28 February 2009. Pre-tax profit increased by 2% to £5.3m (2008: £5.2m), reflecting strong underlying trading in all major areas, with the exception of fertilisers, more than offsetting a £0.4m increase in the pension charge. 

Since the period end, the fertiliser market has become more difficult in terms of both volumes and prices and the Group now anticipates, for fertilisers, a substantial adverse variance to budget for the full year. The remainder of the business is trading satisfactorily. 

Accordingly, for the 52 weeks to 29 August 2009, the Board expects the pre-tax profit to be appreciably lower than last year's underlying figure, reflecting mainly the weakness in fertiliser but also the impact of the increased retirement benefit charge. Further out, the potential for improvement in the three Divisions, particularly fertiliser in Agriculture and the growth prospects for Engineering, give the Board confidence in the future." 

 

Presentation: 

Today, there will be a presentation to brokers' analysts and private client brokers between 13.00 and 14.00 at the offices of Investec, 2 Gresham Street, London EC2V 7QP. Those wishing to attend are asked to contact Charles Ponsonby of Bankside Consultants at charles.ponsonby@bankside.com. 

Enquiries:

Carr's Milling Industries plc Chris Holmes (Chief Executive Officer)	01228-554 600
Ron Wood (Finance Director)
Bankside Consultants Limited Charles Ponsonby	020-7367 8851/07789-202 312

 

  

INTERIM MANAGEMENT REPORT

Carr's performed well in the 26 weeks to 28 February 2009. The unaudited pre-tax profit increased by 2% to £5.3m (2008: £5.2m), reflecting strong underlying trading in all major areas, with the exception of fertilisers, more than offsetting a £0.4m increase in the pension charge. 

Since the period end, the fertiliser market has become more difficult in terms of both volumes and prices and the Group now anticipates, for fertilisers, a substantial adverse variance to budget for the full year. The remainder of the business is trading satisfactorily. 

FINANCIAL REVIEW

Revenue increased by 8% to £174.5m (2008: £161.9m). Pre-tax profit increased by 2% to £5.3m (2008: £5.2m), despite a £0.4m increase in retirement benefit charge, to £0.9m from £0.5m, due to a lower asset value and increased liabilities following the adoption of more recent mortality assumptions at 30 August 2008. This is a non-cash item.

Fully-diluted earnings per share were 15% lower at 37.2p (2008: 44.0p). This is due in part to the increase in the Company's issued share capital following the £2.6m cash placing in September 2008 and in part to the lower profit attributable to equity shareholders.

Total shareholders' equity increased by 28%, to £31.9m from £25.0m at 30 August 2008, due to retained earnings for the period, the cash placing in September 2008 and a £2.1m actuarial gain, net of deferred tax, on the retirement benefit obligation.

February is historically the peak of the Group's borrowing requirements and the net debt at the period end totalled £27.3m as against £26.7m at 1 March 2008 and £17.4m at 30 August 2008. This resulted in gearing of 86%, as against 93% and 70%, respectively. 

Cash flow continues to be affected by high raw material prices, mainly those for fertilisers. The net cash outflow from operations of £6.1m (2008: £7.9m) is a consequence of the Group's increased revenue and higher associated working capital. Working capital at £43.4m is £14.6m higher than at 30 August 2008. This increase reflects the £4.0m increase in inventories resulting from lower than expected sales and an £8.4m reduction in trade and other payables. 

Capital expenditure, whilst relatively modest, was higher at £2.2m (2008: £1.3m), with the principal expenditure on production plant for fertiliser blending and oil distribution facilities. 

Net interest and finance expense was higher at £0.9m (2008: £0.8m) due to the adverse movement since August 2008 in the fair value of the Group's interest rate swaps. Net interest and finance expense was covered 6.1 times (2008: 6.5 times) by Group operating profit of £5.4m (2008: £4.9m). 

INTERIM DIVIDEND

The Board has declared an unchanged interim dividend per share of 6.0p, to be paid on 8 May 2009 to shareholders on the register at close of business on 17 April 2009.

BUSINESS REVIEW

Agriculture

The Group's Agriculture business comprises, in the UK (primarily in the North West of England and South West of Scotland), four related activities - animal feed manufacture, fertiliser blending, agricultural retailing, and fuel distribution - and, in the USA and Germany, animal feed manufacture.

Operating profit (before retirement benefit charge) of £4.4m (2008: £4.0m), up 9%, was achieved on revenue up 10% at £130.2m (2008: £118.8m). The Group's share of post-tax profit in associate and joint ventures was down 23% at £0.8m (2008: £1.0m).

United Kingdom

Compound and blended feed volumes reduced as cheaper home-grown cereals were utilised, following a record harvest. Profit was maintained in line with budget through reduced manufacturing costs and operational efficiencies.

Crystalyx feed block volumes and profit continued to grow, despite the price of the principal raw material, molasses, increasing, due to high demand for the production of bio-diesel. The new product for dairy cattle introduced last September, Optimum, is doing well.

Fertiliser sales suffered from farmers buying early in the previous financial year and from a delay in customer ordering due to volatility in raw material prices. This led to a very substantial reduction in volumes and to a substantial shortfall against budgeted volumes. To date, this lower level of sales has persisted in the second half of the financial year. 

Revenue and profit from the Group's 15 retail branches (six of which also sell farm machinery) were ahead of last year.

The Group's fuel business did well, benefiting from the colder winter, and continued to grow its market share and profit.

Overseas

In the USA, Animal Feed Supplement, Inc., whose plants are located in South Dakota and Oklahoma, experienced reduced volumes for its Smartlic and Feed in a Drum low moisture feed blocks, but increased its margin and its profit on translation from US$ to Sterling.

In Germany, the Crystalyx Products joint venture to manufacture low moisture feed blocks had to contend with a very low German farm-gate milk price and a strong Euro, which acted as a hindrance to exports, but still produced a satisfactory result.

Food

Operating profit (before retirement benefit charge) of £1.6m (2008: £1.1m), up 45%, was achieved on revenue up 2% at £40.5m (2008: £39.7m).

The improved result reflects the poor start to the comparative period, prior to the price increase of November 2007. In the period under review, volumes and profit increased in all three mills, and the result was in line with budget. The operating margin (before retirement benefit charge), however, although improved, remained modest at 4.0% (2008: 2.8%).

Engineering

An operating profit (before retirement benefit charge) of £0.5m (2008: £0.5m) was achieved on revenue up 14% at £3.8m (2008: £3.3m).

Bendalls, the steel fabrication business, benefited from completion of some large contracts for the oil & gas industry in South America and from the completion of 36 pressure vessels for Total's Lyndsey Oil Refinery in North Lincolnshire, but continued to suffer delays by contractors, due to funding and design changes, on certain other contracts. Carrs MSM, the manufacturer of master slave manipulators for research centres and nuclear plants, traded steadily.

On 1 March 2009, the Group acquired the trade and assets of the remote handling technology, robotics and radiation protection equipment business of Hans Wälischmiller GmbH, based in Markdorf, Southern Germany, for €5.5m in cash, of which €2.7m is deferred consideration. This business complements Swindon-based Carrs MSM, which supplies remote handling equipment to the nuclear industry and research establishments.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board considers that the principal risk and uncertainty that could have a material impact on the Group's performance over the remainder of the financial year is a greater than expected reduction in fertiliser sales and margins. In addition, the principal risks and uncertainties described on page 15 of the Annual Report and Accounts 2008 still apply. 

OUTLOOK

Market conditions for Fertilisers in the second half of the financial year are expected to remain difficult, resulting in a substantial adverse variance to fertiliser's budget for the full year. Other parts of UK Agriculture are trading satisfactorily. In the USA and Germany, Agriculture continues to trade in line with the Board's expectations. 

Food is expected to make another useful contribution, broadly in line with the second half of last year. 

In Engineering, the UK has experienced some delays to new contracts. Overseas, the recent acquisition of the trade and assets of South Germany-based Hans Wälischmiller GmbH will open new markets for the Division and lead to improved operating efficiency. 

The increase in the retirement benefit charge in the second half of the financial year is estimated at a similar level to the first - £0.4m. 

Accordingly, for the year to 29 August 2009, the Board expects the pre-tax profit to be appreciably lower than last year's underlying figure, reflecting mainly the weakness in fertiliser, but also the impact of the increased retirement benefit charge. Further out, the potential for improvement in the three Divisions, particularly fertiliser in Agriculture and the growth prospects for Engineering, give the Board confidence in the future. 

Richard Inglewood
Chairman						6 April 2009

  UNAUDITED CONSOLIDATED INCOME STATEMENT,

for the 26 weeks ended 28 February 2009

	Notes	26 weeks ended 28 February 2009  £'000 (unaudited)	26 weeks ended 1 March 2008 £'000 (unaudited)	52 weeks ended 30 August 2008 £'000 (audited)
Continuing operations
Revenue	3	174,522	161,866	372,307
Cost of sales		(153,719)	(141,540)	(327,757)
Gross profit		20,803	20,326	44,550
Net operating expenses		(15,431)	(15,382)	(31,675)
Group operating profit		5,372	4,944	12,875
Analysed as:
Operating profit before non-recurring items and amortisation		5,385	4,872	12,814
Non-recurring items and amortisation	7	(13)	72	61
Group operating profit		5,372	4,944	12,875
Interest income		143	291	454
Interest expense		(874)	(971)	(2,026)
Other finance expense	5	(148)	(75)	(35)
Share of post-tax profit in associate and joint ventures		757	980	1,590
Profit before taxation	3	5,250	5,169	12,858
Taxation	3,6	(1,385)	(1,278)	(4,605)
Profit for the period	3	3,865	3,891	8,253
Profit attributable to minority interest		592	204	552
Profit attributable to equity shareholders		3,273	3,687	7,701
		3,865	3,891	8,253
Dividend per share (pence)
Paid	9	17.0	13.5	19.5
Proposed	9	6.0	6.0	17.0
Earnings per share (pence)
Basic	8	37.4	44.6	92.7
Diluted	8	37.2	44.0	91.2

  

UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE,

for the 26 weeks ended 28 February 2009 

	Notes	26 weeks ended 28 February 2009  £'000 (unaudited)	26 weeks ended 1 March 2008 £'000 (unaudited)	52 weeks ended 30 August 2008 £'000 (audited)
Continuing operations
Revenue	3	174,522	161,866	372,307
Cost of sales		(153,719)	(141,540)	(327,757)
Gross profit		20,803	20,326	44,550
Net operating expenses		(15,431)	(15,382)	(31,675)
Group operating profit		5,372	4,944	12,875
Analysed as:
Operating profit before non-recurring items and amortisation		5,385	4,872	12,814
Non-recurring items and amortisation	7	(13)	72	61
Group operating profit		5,372	4,944	12,875
Interest income		143	291	454
Interest expense		(874)	(971)	(2,026)
Other finance expense	5	(148)	(75)	(35)
Share of post-tax profit in associate and joint ventures		757	980	1,590
Profit before taxation	3	5,250	5,169	12,858
Taxation	3,6	(1,385)	(1,278)	(4,605)
Profit for the period	3	3,865	3,891	8,253
Profit attributable to minority interest		592	204	552
Profit attributable to equity shareholders		3,273	3,687	7,701
		3,865	3,891	8,253
Dividend per share (pence)
Paid	9	17.0	13.5	19.5
Proposed	9	6.0	6.0	17.0
Earnings per share (pence)
Basic	8	37.4	44.6	92.7
Diluted	8	37.2	44.0	91.2

  

UNAUDITED CONSOLIDATED BALANCE SHEET,

as at 28 February 2009 

	Notes	As at 28 February 2009  £'000 (unaudited)	As at 1 March 2008 £'000 (unaudited)	As at 30 August 2008 £'000 (audited)
Assets
Non-current assets
Goodwill		1,381	1,016	1,381
Other intangible assets	13	275	369	294
Property, plant and equipment	13	29,409	28,075	28,596
Investment property		728	746	737
Investment in associate		3,488	3,276	2,870
Interest in joint ventures		1,798	1,427	1,609
Other investments		51	251	51
Financial assets
- Non-current receivables		50	50	50
Deferred tax assets		4,721	3,222	5,318
		41,901	38,432	40,906
Current assets
Inventories		35,007	24,758	31,014
Trade and other receivables		53,002	56,723	50,754
Current tax assets		-	-	65
Financial assets
- Derivative financial instruments		219	1	927
- Cash at bank and in hand		3,158	467	3,896
		91,386	81,949	86,656
Total assets		133,287	120,381	127,562
Liabilities
Current liabilities
Financial liabilities		(28,992)	(20,509)	(15,004)
- Borrowings		(201)	(65)	(22)
- Derivative financial instruments		(44,582)	(46,571)	(52,977)
Trade and other payables		(1,594)	(882)	(2,054)
Current tax liabilities
		(75,369)	(68,027)	(70,057)
Non-current liabilities
Financial liabilities
- Borrowings		(1,455)	(6,687)	(6,325)
- Derivative financial instruments		(27)	(55)	(14)
Retirement benefit obligation	4	(13,322)	(9,306)	(16,558)
Deferred tax liabilities		(4,771)	(3,401)	(4,775)
Other non-current liabilities		(3,214)	(2,049)	(2,237)
		(22,789)	(21,498)	(29,909)
Total liabilities		(98,158)	(89,525)	(99,966)
Net assets		35,129	30,856	27,596
Shareholders' equity
Ordinary shares	10	2,196	2,065	2,094
Share premium	10	7,738	5,099	5,252
Treasury share reserve	10	(101)	(101)	(101)
Equity compensation reserve	10	261	144	206
Foreign exchange reserve	10	540	(371)	107
Other reserve	10	1,524	1,555	1,539
Retained earnings	10	19,757	20,198	15,880
Total shareholders' equity	10	31,915	28,589	24,977
Minority interests in equity	10	3,214	2,267	2,619
Total equity	10	35,129	30,856	27,596

  

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT,

for the 26 weeks ended 28 February 2009 

	Notes	26 weeks ended 28 February 2009  £'000 (unaudited)	26 weeks ended 1 March 2008 £'000 (unaudited)	52 weeks ended 30 August 2008 £'000 (audited)
Cash flows from operating activities
Cash (used in)/generated from operations	11	(6,132)	(7,886)	5,233
Interest received		153	282	447
Interest paid		(880)	(930)	(2,016)
Tax paid		(1,679)	(509)	(647)
Net cash (used in)/generated from operating activities		(8,538)	(9,043)	3,017
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)		-	-	(588)
Investment in joint ventures		-	(294)	(294)
Purchase of intangible assets		(4)	(3)	(4)
Proceeds from sale of property, plant and equipment		140	63	177
Purchase of property, plant and equipment		(1,776)	(877)	(2,141)
Receipt of non-current receivables		-	50	50
Net cash used in investing activities		(1,640)	(1,061)	(2,800)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital	10	2,588	27	209
Net proceeds from issue of new bank loans and other borrowings		1,800	3,295	1,495
Finance lease principal repayments		(442)	(454)	(912)
Repayment of borrowings		(500)	(250)	(1,010)
Increase in other borrowings		2,474	106	1,872
Disposal of interest rate swap		-	111	111
Dividends paid to shareholders		(1,493)	(1,115)	(1,618)
Net cash generated from financing activities		4,427	1,720	147
Effects of exchange rate changes		(302)	78	300
Net (decrease)/increase in cash and cash equivalents		(6,053)	(8,306)	664
Cash and cash equivalents at beginning of the period		66	(598)	(598)
Cash and cash equivalents at end of the period		(5,987)	(8,904)	66
Cash and cash equivalents consists of:
Cash at bank and in hand per the balance sheet	12	3,158	467	3,896
Bank overdrafts included in borrowings	12	(9,145)	(9,371)	(3,830)
		(5,987)	(8,904)	66

  STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors confirm that to the best of their knowledge this condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 (an indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8 (a disclosure of related party transactions and charges therein) of the Disclosure and Transparency Rules.

The Directors of Carr's Milling Industries PLC are listed in the Carr's Milling Industries PLC Annual Report and Accounts 2008. There have been no changes to the Board of Directors in the financial period.

On behalf of the Board

Chris Holmes		Ron Wood
Chief Executive		Finance Director
6 April 2009		6 April 2009

  NOTES TO THE UNAUDITED INTERIM FINANCIAL RESULTS

Basis of preparation

The financial information for the 26 weeks to 28 February 2009 does not constitute statutory accounts for the purposes of section 240 of the Companies Act 1985 and has been neither audited nor reviewed. No statutory accounts for the period have been delivered to the Registrar of Companies.

The financial information in respect of the 52 weeks ended 30 August 2008 has been produced using extracts from the statutory accounts for this period. Consequently, this does not constitute the statutory information for the 52 weeks ended 30 August 2008, which was audited. The statutory accounts for this period have been filed with the Registrar of Companies. The auditors' report on these accounts was unqualified and did not contain a statement under sections 237(2) or (3) of the Companies Act 1985.

The next annual financial statements of the Group, for the 52 weeks to 29 August 2009, will be prepared in accordance with International Financial Reporting Standards as adopted for use in the EU ("IFRS"). This Interim Report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

The Directors approved the Interim Report on 6 April 2009.

The interim financial information has been prepared on the historical cost basis, except for certain assets, which are held at deemed cost, and derivative financial instruments and share-based payments, which are included at fair value.

Accounting policies

The accounting policies used in the preparation of the financial information for the 26 weeks to 28 February 2009 have been consistently applied to all the periods presented and are set out in full in the Group's financial statements for the 52 weeks ended 30 August 2008. A copy of these financial statements is available from the Company's Registered Office at Old Croft, Stanwix, Carlisle, CA3 9BA.

The following interpretations to published standards are effective for the Group for the financial period ending 29 August 2009:

IFRIC 12 'Service Concession Arrangements'

IFRIC 13 'Customer Loyalty Programmes'

IFRIC 14 'IAS 19 - The limit on a defined benefit asset, minimum

funding requirements and their interaction'

The above interpretations to published standards have had no material impact on the results or the financial position of the Group for the 26 weeks to 28 February 2009.

Segmental information

The segment results for the 26 weeks to 28 February 2009 are as follows:

	Agriculture £'000	Food £'000	Engineering £'000	Other £'000	Group £'000
Total gross segment revenue	130,216	40,548	3,939	55	174,758
Inter-segment revenue	(50)	(3)	(183)	-	(236)
Revenue	130,166	40,545	3,756	55	174,522
Operating profit/(loss) before retirement benefit charge	4,375	1,609	507	(212)	6,279
Analysed as:
Before non-recurring items and amortisation	4,375	1,622	507	(212)	6,292
Non-recurring items and amortisation	-	(13)	-	-	(13)
	4,375	1,609	507	(212)	6,279
Retirement benefit charge					(907)
Interest income					143
Interest expense					(874)
Other finance expense					(148)
Share of post-tax profit of associate (Agriculture)					618
Share of post-tax profit of joint ventures (Agriculture)					139
Profit before taxation					5,250
Taxation					(1,385)
Profit for the period					3,865

The segment results for the 26 weeks to 1 March 2008 are as follows:

	Agriculture £'000	Food £'000	Engineering £'000	Other £'000	Group £'000
Total gross segment revenue	118,949	39,680	3,326	70	162,025
Inter-segment revenue	(133)	(2)	(24)	-	(159)
Revenue	118,816	39,678	3,302	70	161,866
Operating profit/(loss) before retirement benefit charge	4,024	1,112	492	(182)	5,446
Analysed as:
Before non-recurring items and amortisation	4,045	1,150	492	(313)	5,374
Non-recurring items and amortisation	(21)	(38)	-	131	72
	4,024	1,112	492	(182)	5,446
Retirement benefit charge					(502)
Interest income					291
Interest expense					(971)
Other finance expense					(75)
Share of post-tax profit of associate (Agriculture)					820
Share of post-tax profit of joint ventures (Agriculture)					160
Profit before taxation					5,169
Taxation					(1,278)
Profit for the period					3,891

The segment results for the 52 weeks to 30 August 2008 are as follows:

	Agriculture £'000	Food £'000	Engineering £'000	Other £'000	Group £'000
Total gross segment revenue	276,158	85,563	10,885	198	372,804
Inter-segment revenue	(331)	(3)	(163)	-	(497)
Revenue	275,827	85,560	10,722	198	372,307
Operating profit/(loss) before retirement benefit charge	11,711	1,956	1,085	(817)	13,935
Analysed as:
Before non-recurring items and amortisation	11,752	2,012	1,060	(950)	13,874
Non-recurring items and amortisation	(41)	(56)	25	133	61
	11,711	1,956	1,085	(817)	13,935
Retirement benefit charge					(1,060)
Interest income					454
Interest expense					(2,026)
Other finance expense					(35)
Share of post-tax profit of associate (Agriculture)					1,273
Share of post-tax profit of joint ventures (Agriculture)					317
Profit before taxation					12,858
Taxation					(4,605)
Profit for the period					8,253

Sales of agricultural products are subject to seasonal fluctuation, with higher demand for animal feed in the first six months of the period, whereas sales demand for fertilisers is historically high in the second six months of the period, particularly in the months of March and April.

Retirement benefit obligation

		£'000
	Deficit in scheme at 31 August 2008	16,558
	Actuarial gain	(2,892)
	Contributions by employer	(1,251)
	Retirement benefit charge	907
	Deficit in scheme at 28 February 2009	13,322

Actuarial gains of £2,892,000 (2008: losses £1,338,000) have been reported in the Statement of Recognised Income and Expense. The turmoil in the financial markets has resulted in a net positive impact on the deficit during the six months to 28 February 2009. The rise in bond yields and lower inflationary expectations have had a positive impact whereas the returns on the assets have been negative, with a loss of £5.3m in the period.

The triennial actuarial valuation at 1 January 2009 will be reported on in the Annual Report & Accounts for the 52 weeks to 29 August 2009.

The Group's associate's defined pension scheme is closed to future service accrual and the valuation for this Scheme has not been updated as any actuarial movements are not considered to be material.

Other finance expense

Other finance expense comprises the movement in the fair value of interest rate derivative instruments. The significant reduction in the Bank of England base rate has further reduced the fair value of the Group's interest rate swap agreements. The charge to the Income Statement for the 26 weeks to 28 February 2009 was £148,000 (26 weeks to 1 March 2008: £75,000, 52 weeks to 30 August 2008: £35,000). Details of the interest rate swap agreements can be found in the Annual Report and Accounts 2008.

6 Taxation

The tax charges for the 26 weeks ended 28 February 2009 and 1 March 2008 are based on the estimated tax charge for the applicable year.

The tax charge for the 52 weeks to 30 August 2008 reflects the increase of £1,317,000 in the deferred tax charge following the withdrawal of Industrial Buildings Allowances.

7 Adjusted operating and pre-tax profit 

	26 weeks ended
	28 February 2009	1 March 2008
	£'000	£'000
Reported group operating profit	5,372	4,944
Non-recurring items and amortisation	13	(72)
Operating profit before non-recurring  items and amortisation	5,385	4,872
Share of operating profit in associate and joint ventures	1,130	1,557
Adjusted operating profit	6,515	6,429
Net finance costs - group	(879)	(755)
Net finance costs - associate and joint ventures	(70)	(116)
Adjusted pre-tax profit	5,566	5,558

8 Earnings per share

The calculation of earnings per ordinary share is based on earnings attributable to shareholders and the weighted average number of ordinary shares in issue during the period.

The adjusted earnings per share figures have been calculated in addition to the earnings per share required by IAS33 - 'Earnings per Share' and is based on earnings excluding the effect of non-recurring items and amortisation of intangible assets. It has been calculated to allow the shareholders to gain an understanding of the underlying performance of the Group. Details of the adjusted earnings per share are set out below:

	26 weeks ended		52 weeks ended
	28 February 2009 £'000	1 March 2008 £'000	30 August 2008 £'000
Earnings	3,273	3,687	7,701
Non-recurring items and intangible asset amortisation:
Amortisation of intangible assets	13	59	118
Net gain on transfer of deferred  ensioners from Group scheme	-	(131)	(379)
Impairment of trade investment	-	-	200
Amortisation of intangible asset and impairment of goodwill recognised in joint ventures, net of tax	-	4	4
Taxation arising on the above non-recurring items and amortisation	(4)	20	62
Withdrawal of Industrial Buildings Allowances	-	-	1,317
Adjusted earnings	3,282	3,639	9,023
Weighted average number of ordinary shares in issue	8,761,759	8,258,994	8,304,877
Potentially dilutive share options	38,496	128,677	137,988
	8,800,255	8,387,671	8,442,865
Basic earnings per share	37.4p	44.6p	92.7p
Diluted earnings per share	37.2p	44.0p	91.2p
Adjusted earnings per share	37.5p	44.1p	108.6p

9 Dividends

	26 weeks ended		52 weeks ended
	28 February 2009 £'000	1 March 2008 £'000	30 August 2008 £'000
Ordinary: Final dividend for the period  ended 30 August 2008 of 17.0p per share (2007: 13.5p)	1,493	1,115	1,115
Ordinary: Interim dividend of 6.0p per share	-	-	503
	1,493	1,115	1,618

The Directors have approved an interim dividend of 6.0p per share (2008: 6.0p per share), which, in line with the requirements of IAS10 - 'Events after the Balance Sheet Date', has not been recognised within these results. This results in an interim dividend of £527,057 (2008: £502,457), which will be paid on 8 May 2009 to shareholders whose names are on the Register of Members at the close of business on 17 April 2009. The ordinary shares will be quoted ex-dividend on 15 April 2009.

10 Changes in shareholders' equity and minority interest

	Attributable to Equity Holders of the Company
	Share Capital £'000	Share Premium Account £'000	Treasury Share Reserve £'000	Equity Compensation Reserve £'000	Foreign Exchange Reserve £'000	Other Reserves £'000	Retained Earnings £'000	Total Share- holders' Equity £'000	Minority Interest £'000	Total £'000
At 31 August 2008	2,094	5,252	(101)	206	107	1,539	15,880	24,977	2,619	27,596
Total recognised income and expense for the period	-	-	-	-	433	-	5,355	5,788	589	6,377
Dividends paid	-	-	-	-	-	-	(1,493)	(1,493)	-	(1,493)
Equity-settled share-based payment transactions, net of tax	-	-	-	55	-	-	-	55	6	61
Allotment of shares	102	2,486	-	-	-	-	-	2,588	-	2,588
Transfer	-	-	-	-	-	(15)	15	-	-	-
At 28 February 2009	2,196	7,738	(101)	261	540	1,524	19,757	31,915	3,214	35,129

On 10 September 2008, £2.6m (net of costs) was raised in a placing of 410,000 new ordinary shares. The issue price was £6.60 per share.

	Attributable to Equity Holders of the Company
	Share Capital £'000	Share Premium Account £'000	Treasury Share Reserve £'000	Equity Compensation Reserve £'000	Foreign Exchange Reserve £'000	Other Reserves £'000	Retained Earnings £'000	Total Share-holders'Equity £'000	Minority Interest £'000	Total £'000
At 2 September 2007	2,064	5,073	(101)	95	(483)	1,570	18,574	26,792	2,062	28,854
Total recognised income and expense for the period	-	-	-	-	112	-	2,724	2,836	199	3,035
Dividends paid	-	-	-	-	-	-	(1,115)	(1,115)	-	(1,115)
Equity-settled share-based payment transactions, net of tax	-	-	-	49	-	-	-	49	6	55
Allotment of shares	1	26	-	-	-	-	-	27	-	27
Transfer	-	-	-	-	-	(15)	15	-	-	-
At 1 March 2008	2,065	5,099	(101)	144	(371)	1,555	20,198	28,589	2,267	30,856

	Attributable to Equity Holders of the Company
	Share Capital £'000	Share Premium Account £'000	Treasury Share Reserve £'000	Equity Compensation Reserve £'000	Foreign Exchange Reserve £'000	Other Reserves £'000	Retained Earnings £'000	Total Shareholders' Equity £'000	Minority Interest £'000	Total £'000
At 2 September 2007	2,064	5,073	(101)	95	(483)	1,570	18,574	26,792	2,062	28,854
Total recognised income and expense for the period	-	-	-	-	590	-	(1,107)	(517)	545	28
Dividends paid	-	-	-	-	-	-	(1,618)	(1,618)	-	(1,618)
Equity-settled share-based payment transactions, net of tax	-	-	-	111	-	-	-	111	12	123
Share options exercised by employees	29	153	-	-	-	-	-	182	-	182
Allotment of shares	1	26	-	-	-	-	-	27	-	27
Transfer	-	-	-	-	-	(31)	31	-	-	-
At 30 August 2008	2,094	5,252	(101)	206	107	1,539	15,880	24,977	2,619	27,596

11 Cash flow (used in)/generated from operations

	26 weeks ended		52 weeks ended
	28 February 2009 £'000	1 March 2008 £'000	30 August 2008 £'000
Net profit	3,865	3,891	8,253
Adjustments for:
Tax	1,385	1,278	4,605
Depreciation on property, plant and equipment	1,730	1,662	3,318
Loss/(profit) on disposal of property, plant  and equipment	6	(9)	(43)
Depreciation on investment property	9	10	19
Intangible asset amortisation	35	78	159
Impairment of trade investment	-	-	200
Net fair value losses/(gains) on derivative financial instruments in operating profit	752	56	(915)
Net fair value loss on share-based Payments	61	55	123
Net foreign exchange differences	(1)	(49)	363
Interest income	(143)	(291)	(454)
Interest expense and borrowing costs	879	974	2,034
Net fair value losses on derivative financial instruments in interest	148	75	35
Share of post-tax profits from associate and joint ventures	(757)	(980)	(1,590)
IAS19 income statement credit in respect of employer contributions	(1,251)	(1,267)	(2,517)
IAS19 income statement charge	907	502	1,060
Actuarial provisions in respect of deferred pension members	-	(1,074)	(1,325)
Payment to Director in lieu of pension	-	-	(1,532)
Changes in working capital (excluding the effects of acquisitions):
Increase in inventories	(3,993)	(9,905)	(15,959)
Increase in receivables	(2,243)	(21,230)	(15,140)
(Decrease)/increase in payables	(7,521)	18,338	24,539
Cash (used in)/generated from continuing operations	(6,132)	(7,886)	5,233

12 Analysis of net debt

	At		At
	28 February 2009 £'000	1 March 2008 £'000	30 August 2008 £'000
Cash and cash equivalents	3,158	467	3,896
Bank overdrafts	(9,145)	(9,371)	(3,830)
Loans and other borrowings: current	(19,072)	(10,455)	(10,421)
Loans and other borrowings: non-current	(539)	(5,901)	(5,408)
Finance leases: current	(775)	(683)	(753)
Finance leases: non-current	(916)	(786)	(917)
	(27,289)	(26,729)	(17,433)

13 Capital expenditure and capital commitments

During the period, the Group incurred capital expenditure on property, plant and equipment of £2,233,000 (2008: £1,276,000) and on intangible assets of £4,000 (2008: £3,000).

During the period, the Group disposed of property, plant and equipment with a net book value of £146,000 (2008: £53,000).Capital commitments contracted, but not provided for, by the Group at the period end amounted to £43,000 (2008: £380,000).

14 Related party transactions

The Group's significant related parties are its associate and joint ventures, as disclosed in the Annual Report and Accounts 2008. There were no material changes to the level of related party transactions during the financial period.

15 Post-balance sheet event

On 1 March 2009, after the period end, the Company completed the acquisition of the trade and assets of the remote handling technology, robotics and radiation protection equipment business of Hans Wälischmiller GmbH (the "Business").

The consideration for the Business is €5.5m in cash, of which €2.7m is deferred. The assets acquired comprise the property (€2.0m), plant and machinery (€0.5m), inventory (€2.0m) and all intellectual property and goodwill (€1.0m) of the Business.€2.0m of the deferred consideration is payable by 31 August 2009 and €0.7m on receipt of progress payments on an order for remote handling technology. The consideration is being satisfied by new bank funding and the Group's existing bank facilities.

The Business complements Swindon-based Carrs MSM, which supplies remote handling equipment to the nuclear industry and research establishments. The Business is based in Markdorf in Southern Germany and has 70 employees. Both the Business and Carrs MSM are suppliers to Sellafield Limited (formerly British Nuclear Group Sellafield Limited).

16  This Interim Report will be sent by post to all registered shareholders. Copies are also available to the public from the Company's registered office: Old Croft, Stanwix, Carlisle, CA3 9BA, or at www.carrs-milling.com 

ENDIR EAKLDESXNEFE