Carrs Group Regulatory News (CARR)

17 Jul 2009 07:00



Friday 17 July 2009

CARR'S MILLING INDUSTRIES PLC 

Interim Management Statement

Carr's (CRM.L), the fully-listed agriculture, food and engineering group, is publishing this second Interim Management Statement of the 52 weeks to 29 August 2009, as required by the UK Listing Authority's Disclosure and Transparency Rules. The Statement relates to trading in the 39 weeks to 30 May 2009 and events in the 19 weeks since the 28 February 2009 half-year end. 

Overview

Carr's remains on-track to achieve market expectations for the full year, which are of an appreciably lower figure than last year's much improved underlying result, as indicated in the Interim Announcement of 6 April 2009. This is despite difficult markets for fertiliser (where trading conditions are as adverse this year as they were favourable last year) and animal feed, compensated for by a strong performance in food, the retailing of agricultural machinery and supplies, and fuel oil distribution.

Agriculture

Revenue and profit from compound and blended feed are well below last year's levels, as a result of substantial reductions in demand, driven principally by lower livestock numbers and cheaper home-grown cereals being utilised as feed, following a record harvest. 

Revenue and profit from Crystalyx feed blocks has been maintained. In the USA, revenue and profit from Animal Feed Supplements' feed block business were broadly maintained in dollar terms, despite a substantial reduction in volumes as livestock numbers decreased because of a weak beef price. 

With fertiliser, the very substantial reduction in demand and consequently volumes reported in the Interim Announcement has continued. As prices started their steep rise in January 2008, peaked in April 2008 and declined significantly from January 2009, revenue for the year to date is down by a smaller percentage than volumes, at 23%. With the price of raw materials, in particular nitrogen and phosphate, declining materially, the cost of some stocks is lower than their net realisable value, resulting in some negative margins in recent weeks. This higher priced stock will be sold by the year end.

The retailing of agricultural machinery and supplies continues to trade strongly, as does fuel oil distribution. 

Food

Lower wheat prices are reflected in reduced milling revenues. However, volumes are running at levels higher than last year which, combined with continued production efficiencies, has resulted in increased profit. 

Engineering 

As reported in the Interim Announcement, 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, south Germany, for Euros 5.5m in cash, of which Euros 2.7m is deferred consideration. This business, which complements Swindon-based Carrs MSM, has been successfully integrated into the Group and is trading well, as is the Division generally.

Indebtedness 

At 30 May 2009, net debt was £23.9m, down £4.4m on the £28.3m a year earlier. This reduction reflects the lower levels of revenue and improved working capital. 

Enquiries:

This Interim Management Statement has been drawn up and presented for the purposes of complying with English law. Any liability arising out of or in connection with this Interim Management Statement will also be determined in accordance with English law.

This Interim Management Statement may contain 'forward-looking statements'. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond the Group's control or which cannot be estimated precisely, such as future market conditions and the behaviour of the market participants. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements.