Carrs Group Regulatory News (CARR)

23 Apr 2007 07:01

Carr's Milling Industries PLC23 April 2007 CARR'S MILLING INDUSTRIES PLC- INTERIM ANNOUNCEMENT trading in line with current market expectations Carr's (CRM.L), the Cumbria-based agriculture, food and engineering group,announces a creditable performance for the 26 weeks to 3 March 2007 in thecontext of adverse external factors affecting the Food and AgricultureDivisions. The Group's pre-tax profit would have improved but for the impact ofhigh wheat prices in the Food Division. FINANCIAL HIGHLIGHTS •Revenue increased by 0.5% to £110.97m. •Pre-tax profit reduced by 10.1% to £3.57m (reported) and by 12.3% to £4.01m (adjusted*). •Basic earnings per share were lower by 11.8% at 30.6p (reported) and by 16.0% at 32.5p (adjusted*). •The interim dividend per share is unchanged at 5.5p. * Adjusted figures exclude the amortisation of intangible assets, but includeshare of operating profit in associate and joint ventures. COMMERCIAL HIGHLIGHTS •Agriculture, much the largest Division, increased its revenue and its profit. In the UK, the Caltech feed block business again traded well; the Carrs Billington Agriculture compound and blended feed business increased sales and market share through service and product innovation; but fertiliser revenue and margins again declined. In the USA, the Animal Feed Supplement feed block business increased sales volumes by 14%. •The Food Division's profit virtually halved following an unsuccessful attempt to pass on to customers the full cost of both the rapid and massive increase in wheat prices and significantly higher energy costs. •Engineering traded solidly, albeit with reduced revenue and with profits similar to the strong comparator period. With regard to prospects, Richard Inglewood, Chairman, stated " Trading in ourmarkets presents many challenges, but in the past the Group has succeeded incombating adverse conditions and achieving growth. Following the tradingstatement on 14 February 2007, the Company is trading in line with the market'sexpectations." Presentation: Today, there will be a presentation to brokers' analysts and private clientinvestment advisers between 13.00 and 14.00, over a sandwich lunch, at theoffices of Bankside Consultants, 1 Frederick's Place, London EC2R 8AE. Thosewishing to attend are asked to notify Charles Ponsonby of Bankside Consultantson 020-7367 8851 /charles.ponsonby@bankside.com Enquiries: Carr's Milling Industries plc 01228-554 600Chris Holmes (Chief ExecutiveOfficer)Ron Wood (Finance Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 CHAIRMAN'S INTERIM STATEMENT The unaudited Group result for the 26 weeks to 3 March 2007 is a creditableperformance in the context of adverse external factors affecting the Food andAgriculture Divisions. Principal amongst these was the massive increase in wheatprices impacting the cost of flour, primarily, and animal feed, but other marketdifficulties continued to affect the UK compound feed and fertiliser businesses,in particular. FINANCIAL REVIEW Although revenue was marginally up at £110.97m (2006: £110.39m), reportedpre-tax profit reduced by 10.1% to £3.57m (2006: £3.97m) and basic earnings pershare was 11.8% lower at 30.6p (2006: 34.7p). The result for the period reflectsa £0.14m increase in pension-related costs to £0.62m (2006: £0.48m). Adjusted Group pre-tax profit reduced by 12.3% to £4.01m (2006: £4.57m), with anadjusted operating margin of 4.1% (2006: 4.8%). Adjusted earnings per share was16.0% lower at 32.5p (2006: 38.7p). Adjusted figures exclude the amortisation ofintangible assets, but include the share of operating profit in associate andjoint ventures. Period end shareholders' equity totalled £21.8m, as against £20.4m at 2September 2006 and £22.1m at 4 March 2006. Net debt totalled £18.1m as against£13.9m and £21.7m, respectively, with gearing of 83%, as against 68% and 98%,respectively. Net finance costs of £0.44m (2006: £0.58m) were covered 7.6 times(2006: 7.3 times) by Group operating profit. INTERIM DIVIDEND The Board has declared an unchanged interim dividend per share of 5.5p, to bepaid on 31 May 2007 to shareholders on the register at close of business on 4May 2007, with an ex-dividend date of 2 May 2007. BUSINESS REVIEW The £0.56m decrease in adjusted Group pre-tax profit reflected the virtualhalving of the Food Division's operating profit. Agriculture, much the largestDivision, increased its profit, if the results of the associate and jointventures are taken into account. Engineering, much the smallest Division,experienced a similar level of profit to the strong comparator period last year.The Group's pre-tax profit would have improved but for the impact of high wheatprices on the Food Division.Agriculture The Group's Agriculture business comprises, in the UK (primarily in the NorthWest of England and South West of Scotland), four related activities - animalfeed manufacture, fertiliser blending, agricultural retailing and oildistribution - and, in the USA and Germany, animal feed manufacture. Operating profit (before retirement benefit charge) of £2.57m (2006: £2.61m) wasachieved on a revenue of £81.89m (2006: £80.46m). United Kingdom Agriculture's UK market place was even more challenging than last year. Thisreflected the continuance of a low farm gate milk price (with farmers receivingas little as 17 pence per litre during the period), high energy costs, andover-capacity in the animal feed market in the Group's trading area.Additionally, the high wheat prices impacted animal feed margins, as some of thecost increase could not immediately be passed on to customers, few of whom arearable farmers. In England, farmers experienced delays in receipt of the SingleFarm Payment subsidy, albeit not as severe as in the previous year, causinguncertainty in their cash flow. The Group's low moisture feed block business in the UK is Caltech, with a plantat Silloth (Cumbria). This successful business traded well across the fullproduct range and benefited from the launch of a trialled health product,Garlyx, for ruminant animals and the equine market. The Group's principal compound and blended feed block business in the UK isCarrs Billington Agriculture, in association with Edward Billington & SonsLimited. This business has four compound feed mills - at Carlisle (Cumbria),Lancaster (Lancashire), Langwathby (Cumbria) and Stone (Staffordshire) - andthree blended feed mills - at Askrigg (North Yorkshire), Kirkbride (Cumbria) andLancaster. In the period, Carrs Billington Agriculture increased sales andmarket share through service and product innovation. In November 2006, Afgritech, a 50:50 joint venture with Afgri Operations, one ofthe largest South African agriculture companies, launched AminoMaxTM, a patentedinnovative rumen bypass protein for feeding to cattle and sheep, produced at theLangwathby mill. Initially available only to customers of Carrs BillingtonAgriculture, Afgritech has assisted in winning new customers for the Group. Workis ongoing to extend the sale of AminomaxTM to the USA animal feed market. Bibby Agriculture is a joint venture company, 50% owned by Carrs BillingtonAgriculture (Sales). It was formed in 2005 to sell animal feed manufactured byits shareholders, fertiliser and other farming supplies in Wales and borderingcounties. In the period, Bibby Agriculture traded well, ahead of budget. The Autumn sales of fertiliser from the three manufacturing and blending plants,at Invergordon (Easter Ross), Montrose (Angus) and Silloth (Cumbria), producinga wide range of fertilisers, were lower than last year. In the first half,revenue and margins declined, ahead of the March/April peak selling period,reflecting farmers' cautious approach to market conditions. Carr's agricultural retailing comprises 14 branches from Perth in the North toLeek (Staffordshire) in the South, selling farm supplies. Carr's Machinerydistributes new and used agricultural and ground care machinery from six ofthese branches, in the North of England and the South West of Scotland. In theperiod, sales of farm inputs, machinery and parts exceeded budget. Wallace Oils, which was acquired in April 2005, supplies oils and lubricants toa broad customer base out of three depots, located at Carlisle, Dumfries andStranraer, the latter two in Dumfries and Galloway. In the period, the oilbusiness exceeded budget despite severe competition and the milder weather. InJanuary 2007, the entire share capital of Johnstone Fuels and Lubricants Limitedwas acquired; Johnstone Fuels is an oil distribution business with three depots,at Dumfries, Castle Douglas and Newton Stewart, all of them in Dumfries andGalloway. In the year ended 30 April 2006, Johnstone Fuels reported an auditedturnover of £13.5m and at that date it had shareholders' funds of approximately£0.9m. The integration of the Johnstone Fuels and Wallace Oils businesses isprogressing well and it is planned to combine the two depots at Dumfries.Overseas The Group's principal overseas business is the wholly-owned Animal FeedSupplement Inc., which produces low moisture feed block at two plants in theUSA, at Belle Fourche (South Dakota) and Poteau (Oklahoma). In the period,Animal Feed Supplement traded strongly, with sales volumes up 14% on last year. In January 2006, Crystalyx Products GmbH, a 50:50 joint venture with Agravis,one of Germany's largest agricultural companies, commissioned a new low moistureanimal feed plant to manufacture Crystalyx in Oldenburg, North West Germany forthe domestic market. In the period, Crystalyx Products traded ahead ofexpectations and expanded its market base with sales into Eastern Europe. Food Carr's principal food companies are the flour millers: Carr's Flour Mills atSilloth (Cumbria), Hutchisons at Kirkcaldy (Fife) and Greens at Maldon (Essex). Operating profit (before retirement benefit charge) of £0.92m (2006: £1.70m) wasachieved on a revenue of £25.14m (2006: £24.53m). The feature of the period was the rapid and massive increase in wheat prices,with year-on-year prices higher by approximately £30/tonne or 40%. This rise inprice was a global trend driven partly by a disastrous harvest in Australia andincreased demand for cereals in the bio-fuel industry. Energy costs were alsosignificantly higher than the previous year, with the last of the mills movingto a higher cost contract. In a highly competitive market, the flour industryhas so far been unsuccessful in its attempt to pass on to customers the fullcost of these increases, resulting in a significant deterioration in flourmargins. Engineering Engineering comprises Bendalls and R Hind, both of which are based in Carlisle,and Carrs MSM, which is based in Swindon. Bendalls, whose specialism isprecision welding, designs and manufactures process plant and equipment; R Hindprovides vehicle bodybuilding and accident repairs for cars and commercialvehicles; and Carrs MSM designs and manufactures master slave manipulators,which are key components for many industries but notably the nuclear industry. Operating profit (before retirement benefit charge) of £0.59m (2006: £0.59m) wasachieved on a revenue of £3.87m (2006: £5.32m). In the period, Engineering traded solidly, albeit with reduced revenue and withprofit similar to the strong comparator period. The build-up of work on nucleardecommissioning for British Nuclear Group in West Cumbria is slow as the timefrom quotation to order is long. In the period, Bendalls completed itsfabrication for the SeaGen next generation tidal energy device for installationin Strangford Lough in Northern Ireland later this year. OUTLOOK AgricultureMarket conditions are tough and the Division has traded well to achieve theseresults in the first half year. We do not expect to see much change in tradingconditions for the remainder of 2007. However, development of the AminomaxTMproduct in the UK and the USA, and expansion of our market for Crystalyx inmainland Europe, is expected to achieve growth in the years ahead. FoodThe flour market remains highly competitive. Carrs Flour Mills is continuing tocut costs where this can be achieved without affecting the high quality of itsproducts or service. EngineeringThe order book across the three businesses has improved in recent months, albeitthat Bendalls will have a lower activity level in the third quarter. The resultfor the year is expected to be similar to 2006, which returned an enhancedperformance over previous years. OverallTrading in our markets presents many challenges, but in the past the Group hassucceeded in combating adverse conditions and achieving growth. Following thetrading statement on 14 February 2007, the Company is trading in line with themarket's expectations. Richard Inglewood Chairman 23 April 2007 UNAUDITED CONSOLIDATED INCOME STATEMENT for the 26 weeks ended 3 March 2007 26 weeks ended 26 weeks ended 52 weeks ended 3 March 4 March 2 September 2007 2006 2006 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Continuing operations Revenue 110,970 110,388 242,576 Net operating expenses (107,632) (106,143) (235,460) Group operating profit 3,338 4,245 7,116 Analysed as:Operating profit before 3,540 4,719 7,987non-recurring items andamortisationNon-recurring items and (202) (474) (871)amortisation Group operating profit 3,338 4,245 7,116 Interest receivable and similar 216 92 384income Interest payable and similar (658) (671) (1,395)charges Share of post-tax profit in 669 299 218associate and joint ventures Profit before taxation 3,565 3,965 6,323 Taxation (902) (1,130) (1,989) Profit for the period 2,663 2,835 4,334 Profit/(loss) attributable to 140 (14) 139minority interest Profit attributable to equity 2,523 2,849 4,195shareholders 2,663 2,835 4,334 Dividend per share (pence)Paid 12.5 11.0 16.5Proposed 5.5 5.5 12.5 Earnings per share (pence)Basic 30.6 34.7 51.0Diluted 30.1 34.3 50.4 UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the 26 weeks ended 3 March 2007 26 weeks 26 weeks 52 weeks ended ended ended 3 March 4 March 2 September 2007 2006 2006 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Foreign exchange translationdifferences arising ontranslation of overseas (38) 153 (150)subsidiaries Actuarial (losses)/gains onretirement benefit obligation:- Group - (972) (3,900)- Share of associate - - 206 Taxation credit/(charge) onactuarial movementon retirement benefit obligation:- Group - 292 1,170- Share of associate - - (62) Net expenses recognised directlyin equity (38) (527) (2,736) Profit for the period 2,663 2,835 4,334 Total recognised income for the 2,625 2,308 1,598period Attributable to minority interest 140 (14) 139 Attributable to equity 2,485 2,322 1,459shareholders 2,625 2,308 1,598 UNAUDITED CONSOLIDATED BALANCE SHEET as at 3 March 2007 As at As at As at 3 March 4 March 2 September 2007 2006 2006 £'000 £'000 £'000 (unaudited) (unaudited) (audited)AssetsNon-current assetsGoodwill 845 155 235Other intangible assets 835 1,249 802Property, plant and equipment 29,145 29,288 29,172Investment property 766 818 794Investment in associate 1,487 1,092 982Interest in joint ventures 869 863 704Other investments 254 255 254Financial assets- Derivative financial 96 7 37instruments- Non-current receivables 101 216 208Deferred tax assets 5,061 4,286 5,162 39,459 38,229 38,350Current assetsInventories 18,551 19,365 11,944Trade and other receivables 38,729 39,787 33,546Current tax assets 4 1 1Cash and cash equivalents 716 94 2,292 58,000 59,247 47,783 Total assets 97,459 97,476 86,133LiabilitiesCurrent liabilitiesFinancial liabilities- Borrowings (12,408) (15,131) (9,682)- Derivative financial (1) - (27)instrumentsTrade and other payables (32,677) (31,959) (25,387)Current tax liabilities (1,564) (1,773) (1,324) (46,650) (48,863) (36,420)Non-current liabilitiesFinancial liabilities- Borrowings (6,361) (6,641) (6,512)- Derivative financial - (33) -instrumentsRetirement benefit obligation (15,137) (12,905) (15,796)Deferred tax liabilities (3,647) (3,712) (3,600)Other non-current liabilities (1,787) (1,550) (1,524) (26,932) (24,841) (27,432) Total liabilities (73,582) (73,704) (63,852) Net assets 23,877 23,772 22,281Shareholders' equityOrdinary shares 1,963 2,058 2,058Share premium 5,073 5,004 5,004Equity compensation reserve 46 - 22Foreign exchange reserve (268) 73 (230)Other reserve 1,586 1,616 1,601Retained earnings 13,401 13,325 11,895Total shareholders' equity 21,801 22,076 20,350Minority interests in equity 2,076 1,696 1,931Total equity 23,877 23,772 22,281 UNAUDITED CONSOLIDATED CASH FLOW STATEMENT for the 26 weeks ended 3 March 2007 26 weeks ended 26 weeks ended 52 weeks ended 3 March 4 March 2 September 2007 2006 2006 £'000 £'000 £'000 (unaudited) (unaudited) (audited)Cash flows from operatingactivitiesCash generated from/(used by) 585 (1,579) 11,069operationsInterest received 204 233 379Interest paid (574) (888) (1,755)Tax paid (724) (1,011) (2,454)Net cash (used by)/generated from (509) (3,245) 7,239operating activities Cash flows from investingactivitiesAcquisition of subsidiaries (net (1,049) - (3)of cash acquired)Investment in joint ventures - (685) (710)Net payment of loans to joint (90) - (280)venturesReceipt of non-current receivable 100 - -Purchase of intangible assets (5) - (9)Proceeds from sale of property, 139 111 192plant and equipmentPurchase of property, plant and (1,275) (1,488) (2,901)equipmentProceeds from sale of investments - - 1Net cash used by investing (2,180) (2,062) (3,710)activities Cash flows from financingactivitiesNet proceeds from issue of 75 32 32ordinary share capitalNet purchase of own shares held (101) - -in trustNet proceeds from issue of new 1,500 1,500 -bank loans and other borrowingsFinance lease principal (486) (529) (1,047)repaymentsRepayment of borrowings (2,069) (618) (2,487)Dividends paid to shareholders (1,032) (905) (1,358)Net cash used by financing (2,113) (520) (4,860)activities Effects of exchange rate changes 3 36 (88) Net decrease in cash and cash (4,799) (5,791) (1,419)equivalents Cash and cash equivalents at 1,084 2,503 2,503beginning of the periodCash and cash equivalents at end (3,715) (3,288) 1,084of the period Cash and cash equivalentsconsists of:Cash and cash equivalents per the 716 94 2,292balance sheetBank overdrafts included in (4,431) (3,382) (1,208)borrowings (3,715) (3,288) 1,084 NOTES TO THE UNAUDITED INTERIM FINANCIAL RESULTS 1. Basis of preparation The financial information for the 26 weeks to 3 March 2007 does not constitutestatutory accounts for the purposes of section 240 of the Companies Act 1985 andhas not been audited. No statutory accounts for the period have been deliveredto the Registrar of Companies. The financial information in respect of the 52 weeks ended 2 September 2006 hasbeen produced using extracts from the statutory accounts for this period.Consequently, this does not constitute the statutory information for the 52weeks ended 2 September 2006, which was audited. The statutory accounts for thisperiod have been filed with the Registrar of Companies. The auditors' report onthese accounts was unqualified and did not contain a statement under sections237(2) or (3) of the Companies Act 1985. The annual financial statements of the Group, for the 52 weeks to 1 September2007, will be prepared in accordance with International Financial ReportingStandards as adopted for use in the EU ("IFRS"). This Interim Report has beenprepared in accordance with the Listing Rules of the Financial ServicesAuthority. The Group has chosen not to adopt IAS34, 'Interim financialstatements', in preparing its 2007 interim statements. The directors approved the Interim Report on 23 April 2007. The interim financial information has been prepared on the historical costbasis, except for certain assets, which are held at deemed cost and derivativefinancial instruments and share-based payments, which are included at fairvalue. 2. Accounting policies The accounting policies used in the preparation of the financial information forthe 26 weeks to 3 March 2007 have been consistently applied to all the periodspresented and are set out in full in the Group's financial statements for the 52weeks ended 2 September 2006. A copy of these financial statements is availablefrom the Company's registered office at Old Croft, Stanwix, Carlisle, CA3 9BA. 3. Segmental information The segment results for the 26 weeks to 3 March 2007 are as follows: +---------------------+-----------+-------+-----------+-------+--------+| |Agriculture| Food|Engineering| Other| Group|| | £'000| £'000| £'000| £'000| £'000|+---------------------+-----------+-------+-----------+-------+--------+|Total gross segment | 82,044| 25,142| 3,924| 79| 111,189||revenue | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Inter-segment revenue| (157)| (7)| (55)| -| (219)|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Revenue | 81,887| 25,135| 3,869| 79| 110,970|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Operating profit/ | | | | | ||(loss) before | 2,565| 919| 586| (112)| 3,958||retirement benefit | | | | | ||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Analysed as: | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Before non-recurring | | | | | ||items and | 2,608| 1,078| 586| (112)| 4,160||amortisation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Non-recurring items | | | | | ||and amortisation | (43)| (159)| -| -| (202)|+---------------------+-----------+-------+-----------+-------+--------+| | 2,565| 919| 586| (112)| 3,958|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Retirement benefit | | | | | (620)||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Net finance costs | | | | | (442)|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||profit of associate | | | | | 506|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||profit of joint | | | | | 163||ventures | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Profit before | | | | | 3,565||taxation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Taxation | | | | | (902)|+---------------------+-----------+-------+-----------+-------+--------+|Profit for the period| | | | | 2,663|+---------------------+-----------+-------+-----------+-------+--------+ The segment results for the 26 weeks to 4 March 2006 are as follows: +---------------------+-----------+-------+-----------+-------+--------+| |Agriculture| Food|Engineering| Other| Group|| | £'000| £'000| £'000| £'000| £'000|+---------------------+-----------+-------+-----------+-------+--------+|Total gross segment | 80,611| 24,532| 5,366| 71| 110,580||revenue | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Inter-segment revenue| (147)| (1)| (44)| -| (192)|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Revenue | 80,464| 24,531| 5,322| 71| 110,388|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Operating profit/ | | | | | ||(loss) before | 2,614| 1,696| 590| (179)| 4,721||retirement benefit | | | | | ||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Analysed as: | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Before non-recurring | | | | | ||items and | 2,675| 2,109| 590| (179)| 5,195||amortisation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Non-recurring items | | | | | ||and amortisation | (61)| (413)| -| -| (474)|+---------------------+-----------+-------+-----------+-------+--------+| | 2,614| 1,696| 590| (179)| 4,721|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Retirement benefit | | | | | (476)||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Net finance costs | | | | | (579)|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||profit of associate | | | | | 293|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||profit of joint | | | | | 6||ventures | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Profit before | | | | | 3,965||taxation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Taxation | | | | | (1,130)|+---------------------+-----------+-------+-----------+-------+--------+|Profit for the period| | | | | 2,835|+---------------------+-----------+-------+-----------+-------+--------+ The segment results for the 52 weeks to 2 September 2006 are as follows: +---------------------+-----------+-------+-----------+-------+--------+| |Agriculture| Food|Engineering| Other| Group|| | £'000| £'000| £'000| £'000| £'000|+---------------------+-----------+-------+-----------+-------+--------+|Total gross segment | 174,793| 55,703| 12,345| 213| 243,054||revenue | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Inter-segment revenue| (301)| (3)| (174)| -| (478)|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Revenue | 174,492| 55,700| 12,171| 213| 242,576|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Operating profit/ | | | | | ||(loss) before | 4,954| 2,506| 1,055| (325)| 8,190||retirement benefit | | | | | ||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Analysed as: | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Before non-recurring | | | | | ||items and | 4,998| 3,333| 1,055| (325)| 9,061||amortisation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Non-recurring items | | | | | ||and amortisation | (44)| (827)| -| -| (871)|+---------------------+-----------+-------+-----------+-------+--------+| | 4,954| 2,506| 1,055| (325)| 8,190|+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Retirement benefit | | | | | (1,074)||charge | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Net finance costs | | | | | (1,011)|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||profit of associate | | | | | 393|+---------------------+-----------+-------+-----------+-------+--------+|Share of post-tax | | | | | ||loss of joint | | | | | (175)||ventures | | | | | |+---------------------+-----------+-------+-----------+-------+--------+ +---------------------+-----------+-------+-----------+-------+--------+|Profit before | | | | | 6,323||taxation | | | | | |+---------------------+-----------+-------+-----------+-------+--------+|Taxation | | | | | (1,989)|+---------------------+-----------+-------+-----------+-------+--------+|Profit for the period| | | | | 4,334|+---------------------+-----------+-------+-----------+-------+--------+ 4. Taxation The tax charges for the 26 weeks ended 3 March 2007 and 4 March 2006 are basedon the estimated tax charge for the applicable year. 5. Adjusted operating and pre-tax profit +---------------------------------+-------------------------------+| | 26 weeks ended|+---------------------------------+-------------+-----------------+| | 3 March 2007| 4 March 2006|+---------------------------------+-------------+-----------------+| | £'000| £'000|+---------------------------------+-------------+-----------------+|Reported group operating profit | 3,338| 4,245|+---------------------------------+-------------+-----------------+|Amortisation of intangible assets| 202| 474|+---------------------------------+-------------+-----------------+ +---------------------------------+-------------+-----------------+|Operating profit before | 3,540| 4,719||non-recurring | | ||items and amortisation | | |+---------------------------------+-------------+-----------------+|Share of operating profit in | 1,009| 548||associate and joint ventures | | |+---------------------------------+-------------+-----------------+|Adjusted operating profit | 4,549| 5,267|+---------------------------------+-------------+-----------------+ +---------------------------------+-------------+-----------------+|Net finance costs - group | (442)| (579)|+---------------------------------+-------------+-----------------+|Net finance costs - associate and| | ||joint ventures | (101)| (120)|+---------------------------------+-------------+-----------------+|Adjusted pre-tax profit | 4,006| 4,568|+---------------------------------+-------------+-----------------+ 6. Earnings per share The calculation of earnings per ordinary share is based on earnings attributableto shareholders and the weighted average number of ordinary shares in issueduring the period. The adjusted earnings per share figures have been calculated in addition to theearnings per share required by IAS33 - 'Earnings per Share' and is based onearnings excluding the effect of non-recurring items and amortisation. It hasbeen calculated to allow the shareholders to gain an understanding of theunderlying performance of the Group. Details of the adjusted earnings per shareare set out below: +-----------------------------------+-------------------------+----------------+| |26 weeks ended |52 weeks ended || +------------+------------+----------------+| |3 March 2007|4 March 2006|2 September 2006|| |£'000 |£'000 |£'000 |+-----------------------------------+------------+------------+----------------+|Earnings |2,523 |2,849 |4,195 |+-----------------------------------+------------+------------+----------------+|Non-recurring items and intangible | | | ||asset amortisation: | | | |+-----------------------------------+------------+------------+----------------+|Immediate recognition of negative | | | ||goodwill |- |- |(77) |+-----------------------------------+------------+------------+----------------+|Amortisation of intangible assets |202 |474 |948 |+-----------------------------------+------------+------------+----------------+|Amortisation of intangible asset | | | ||and impairment of goodwill | | | ||recognised in joint ventures, net | | | ||of tax |13 |- |129 |+-----------------------------------+------------+------------+----------------+|Taxation arising on non-recurring | | | ||items and amortisation |(61) |(142) |(284) |+-----------------------------------+------------+------------+----------------+ +-----------------------------------+------------+------------+----------------+|Adjusted earnings |2,677 |3,181 |4,911 |+-----------------------------------+------------+------------+----------------+ +-----------------------------------+------------+------------+----------------+|Weighted average number of | | | ||ordinary shares in issue |8,244,122 |8,221,079 |8,227,329 |+-----------------------------------+------------+------------+----------------+|Potentially dilutive share options |150,206 |96,172 |101,237 |+-----------------------------------+------------+------------+----------------+ +----------------------------------+-------------+------------+----------------+| |8,394,328 |8,317,251 |8,328,566 |+----------------------------------+-------------+------------+----------------+ +----------------------------------+-------------+------------+----------------+|Basic earnings per share |30.6p |34.7p |51.0p |+----------------------------------+-------------+------------+----------------+|Diluted earnings per share |30.1p |34.3p |50.4p |+----------------------------------+-------------+------------+----------------+|Adjusted earnings per share |32.5p |38.7p |59.7p |+----------------------------------+-------------+------------+----------------+ 7. Dividends +---------------------------------------+-----------------------+--------------+| |26 weeks ended |52 weeks ended|| +-----------+-----------+--------------+| |3 March |4 March |2 September || |2007 |2006 |2006 || |£'000 |£'000 |£'000 |+---------------------------------------+-----------+-----------+--------------+|Ordinary: Final dividend of 12.5p per | | | ||share |1,032 |905 |905 ||(2006: 11.0p) | | | |+---------------------------------------+-----------+-----------+--------------+|Ordinary: Interim dividend of 5.5p per |- |- |453 ||share | | | |+---------------------------------------+-----------+-----------+--------------++---------------------------------------+-----------+-----------+--------------+| |1,032 |905 |1,358 |+---------------------------------------+-----------+-----------+--------------+ The directors have approved an interim dividend of 5.5p per share (2006: 5.5pper share), which, in line with the requirements of IAS10 - 'Events after theBalance Sheet Date', has not been recognised within these results. This resultsin an interim dividend of £454,113 (2006: £453,000), which will be paid on 31May 2007 to shareholders whose names are on the Register of Members at the closeof business on 4 May 2007. The ordinary shares will be quoted ex-dividend on 2May 2007. 8. Changes in shareholders' equity +--------------+---------------------------------------------------------------------+--------+-------+| |Attributable to Equity Holders of the Company | | || | | | || | |Minority| || | |Interest|Total || | |£'000 |£'000 || +-------+-------+------------+--------+--------+--------+-------------+ | || | |Share |Equity |Foreign | | |Total | | || |Share |Premium|Compensation|Exchange|Other |Retained|Shareholders'| | || |Capital|Account|Reserve |Reserve |Reserves|Earnings|Equity | | || |£'000 |£'000 |£'000 |£'000 |£'000 |£'000 |£'000 | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|At 3 September|2,058 |5,004 |22 |(230) |1,601 |11,895 |20,350 |1,931 |22,281 ||2006 | | | | | | | | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Total | | | | | | | | | ||recognised |- |- |- |(38) |- |2,523 |2,485 |140 |2,625 ||income and | | | | | | | | | ||expense for | | | | | | | | | ||the period | | | | | | | | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Dividends |- |- |- |- |- |(1,032) |(1,032) |- |(1,032)|+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Equity-settled| | | | | | | | | ||share-based | | | | | | | | | ||payment |- |- |24 |- |- |- |24 |5 |29 ||transactions, | | | | | | | | | ||net | | | | | | | | | ||of tax | | | | | | | | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Share issues |6 |69 |- |- |- |- |75 |- |75 |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Purchase of | | | | | | | | | ||shares held in|(101) |- |- |- |- |- |(101) |- |(101) ||trust | | | | | | | | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|Transfer |- |- |- |- |(15) |15 |- |- |- |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+ +--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+|At 3 March |1,963 |5,073 |46 |(268) |1,586 |13,401 |21,801 |2,076 |23,877 ||2007 | | | | | | | | | |+--------------+-------+-------+------------+--------+--------+--------+-------------+--------+-------+ 9. Cash flow generated from/(used by) operating activities +------------------------+-----------------------------+-----------------+| | 26 weeks ended | 52 weeks ended || +------------+----------------+-----------------+| |3 March 2007|4 March 2006 |2 September 2006 || |£'000 |£'000 | £'000 |+------------------------+------------+----------------+-----------------+|Net profit |2,663 |2,835 | 4,334 |+------------------------+------------+----------------+-----------------+|Adjustments for: | | | |+------------------------+------------+----------------+-----------------+|Tax |902 |1,130 | 1,989 |+------------------------+------------+----------------+-----------------+|Depreciation |1,807 |1,661 | 3,419 |+------------------------+------------+----------------+-----------------+|(Profit)/loss on | | | ||disposal of property, |(67) |(14) |27 ||plant and equipment | | | |+------------------------+------------+----------------+-----------------+|Profit on disposal of |- |- |(1) ||investments | | | |+------------------------+------------+----------------+-----------------+|Immediate recognition of| | | ||negative |- |- |(77) ||goodwill | | | |+------------------------+------------+----------------+-----------------+|Intangible asset |221 |490 |986 ||amortisation | | | |+------------------------+------------+----------------+-----------------+|Net fair value (gains)/ | | | ||losses on |(26) |(80) |27 ||derivative financial | | | ||instruments in | | | ||operating profit | | | |+------------------------+------------+----------------+-----------------+|Net fair value loss on | | | ||share-based |29 |- |27 ||payments | | | |+------------------------+------------+----------------+-----------------+|Net foreign exchange |(16) |- |14 ||differences | | | |+------------------------+------------+----------------+-----------------+|Interest income |(214) |(92) |(378) |+------------------------+------------+----------------+-----------------+|Interest expense and | | | ||borrowing |718 |675 |1,539 ||costs | | | |+------------------------+------------+----------------+-----------------+|Net fair value gains on | | | ||derivative |(59) |- |(143) ||financial instruments in| | | ||interest | | | |+------------------------+------------+----------------+-----------------+|Share of post-tax | | | ||profits from |(669) |(299) |(218) ||associate and joint | | | ||ventures | | | |+------------------------+------------+----------------+-----------------+| | | | |+------------------------+------------+----------------+-----------------+|Changes in working | | | ||capital | | | ||(excluding the effects | | | ||of acquisitions): | | | |+------------------------+------------+----------------+-----------------+|(Increase)/decrease in |(6,436) |(6,418) |1,003 ||inventories | | | |+------------------------+------------+----------------+-----------------+|(Increase)/decrease in |(3,564) |(4,725) |1,903 ||receivables | | | |+------------------------+------------+----------------+-----------------+|Increase/(decrease) in |5,296 |3,258 |(3,382) ||payables | | | |+------------------------+------------+----------------+-----------------+ +------------------------+------------+----------------+-----------------+|Cash generated from/ | | | ||(used by) | | | ||continuing operations |585 |(1,579) |11,069 |+------------------------+------------+----------------+-----------------+ 10 Acquisition On 8 January 2007, Carrs Billington Agriculture (Sales) Limited acquired theentire issued share capital of Johnstone Fuels and Lubricants Limited for atotal consideration of £1,735,000. The total provisional adjustments required tothe book value of the assets and liabilities of the acquired company in order topresent the net assets at fair values and in accordance with group accountingprinciples were £175,000, details of which are set out below, together with theresultant amount of goodwill arising. From the date of acquisition to 3 March 2007, the acquisition contributed£2,006,000 to revenue and £53,000 to profit before interest. The acquiredcompany utilised £137,000 of the Group's net operating cash flows, £77,000 forcapital expenditure, and contributed £1,000 in respect of interest. In its last financial year to 30 April 2006, Johnstone Fuels and LubricantsLimited made an audited profit after tax of £217,000. For the period since thatdate to the date of acquisition, the management accounts of Johnstone Fuels andLubricants Limited show: +-----------------------------------+-------------+| | || |£'000 |+-----------------------------------+-------------+|Revenue |8,106 |+-----------------------------------+-------------+|Operating profit |138 |+-----------------------------------+-------------+|Profit before taxation |130 |+-----------------------------------+-------------+|Taxation |(39) |+-----------------------------------+-------------+|Profit attributable to shareholders|91 |+-----------------------------------+-------------+ +--------------------------------+---------+-----------+--------------+| |Book |Intangible |Provisional || |Value |Assets |Fair value || |£'000 |£'000 |£'000 |+--------------------------------+---------+-----------+--------------+|Intangible assets |- |250 |250 |+--------------------------------+---------+-----------+--------------+|Property, plant and equipment |315 |- |315 |+--------------------------------+---------+-----------+--------------+|Inventories |171 |- |171 |+--------------------------------+---------+-----------+--------------+|Trade and other receivables |1,512 |- |1,512 |+--------------------------------+---------+-----------+--------------+|Cash and cash equivalents |686 |- |686 |+--------------------------------+---------+-----------+--------------+|Current borrowings |(44) |- |(44) |+--------------------------------+---------+-----------+--------------+|Trade and other payables |(1,467) |- |(1,467) |+--------------------------------+---------+-----------+--------------+|Current tax liabilities |(94) |- |(94) |+--------------------------------+---------+-----------+--------------+|Non-current borrowings |(96) |- |(96) |+--------------------------------+---------+-----------+--------------+|Deferred tax liabilities |(33) |(75) |(108) |+--------------------------------+---------+-----------+--------------+ +--------------------------------+---------+-----------+--------------+|Net assets acquired |950 |175 |1,125 |+--------------------------------+---------+-----------+--------------+|Goodwill | | |610 |+--------------------------------+---------+-----------+--------------+|Consideration | | |1,735 |+--------------------------------+---------+-----------+--------------+ +--------------------------------+---------+-----------+--------------+|Consideration satisfied by: | | | |+--------------------------------+---------+-----------+--------------+|Cash | | |1,700 |+--------------------------------+---------+-----------+--------------+|Acquisition expenses | | |35 |+--------------------------------+---------+-----------+--------------+| | | |1,735 |+--------------------------------+---------+-----------+--------------+ The book values of assets and liabilities have been taken from the managementaccounts of Johnstone Fuels and Lubricants Limited at 8 January 2007 (the dateof acquisition). The above fair values are provisional and will be finalised inthe full year financial statements when the detailed acquisition investigationhas been completed. 11 Analysis of net debt +----------------------------+---------------------------+---------------+| | At | At || +------------+--------------+---------------+| |3 March 2007|4 March 2006 |2 September || |£'000 |£'000 |2006 || | | |£'000 |+----------------------------+------------+--------------+---------------+|Cash and cash equivalents |716 |94 | 2,292 |+----------------------------+------------+--------------+---------------+|Bank overdrafts |(4,431) |(3,382) | (1,208) |+----------------------------+------------+--------------+---------------+|Loans and other | | | ||borrowings: current |(7,315) |(10,753) | (7,634) |+----------------------------+------------+--------------+---------------+|Loans and other | | | ||borrowings: non-current |(5,394) |(5,887) | (5,640) |+----------------------------+------------+--------------+---------------+|Finance leases: current |(662) |(996) | (840) |+----------------------------+------------+--------------+---------------+|Finance leases: non-current |(967) |(754) | (872) |+----------------------------+------------+--------------+---------------+ +----------------------------+------------+--------------+---------------+| |(18,053) |(21,678) | (13,902) |+----------------------------+------------+--------------+---------------+ 12 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 This information is provided by RNS The company news service from the London Stock Exchange