Carrs Group Regulatory News (CARR)

14 Feb 2007 10:26

Carr's Milling Industries PLC14 February 2007 Wednesday 14 February 2007 CARR'S MILLING INDUSTRIES PLC Trading Statement Carr's, the Cumbria-based Agriculture, Food and Engineering group, proposes toannounce its results for the 26 weeks to 3 March 2007 on 23 April 2007. TheBoard expects these results to report a reduction in Group profit before taxcompared to last year. Food and certain parts of our Agriculture Division are experiencingmarket-related difficult times, but the low moisture feed block businesses,particularly in the USA, and Engineering are trading well. Since the AGM on 9 January 2007, the UK market has resisted a flour priceincrease predicated on a massive increase in wheat prices, combined with higherenergy costs. With little change envisaged in the foreseeable future, wetherefore expect a significant deterioration in our flour margins. We continueto action cost reductions, where possible without jeopardising the high qualityflours produced at our three mills. In Agriculture, the higher cost of raw materials (in particular, wheat) andenergy for our compound feed business is not fully offset by increases in salesprices, culminating in lower margins. The farm gate milk price received by ourdairy farming customers remains unsustainably low, with no certainty of a changein the coming months, exaccerbated by delays in receipt of the Single FarmPayment. Accordingly, we anticipate, at this early stage of the peak sellingseason, that farmers will hold off fertiliser purchases and therefore our saleswill be down year-on-year, with lower margins. Feed block revenue in the US andthe UK is ahead of budget and of last year. The new feed block plant tomanufacture Crystalyx in Germany, with our joint venture partner, is expandingits market and trading ahead of expectations. The other joint venture feedcompanies established in 2006, Bibby Agriculture in Wales and Afgritech inEngland, have traded well. Indeed, the results from the new plant at Langwathby(Cumbria), to produce by-pass protein for ruminant animals, is opening newmarkets and the outlook is encouraging. The acquisition of Johnstone Fuels,based in SW Scotland, was completed in January 2007 and complements our WallaceOils business, which operates in NW England and SW Scotland. The Engineering Division is trading slightly ahead of budget. Bendalls'fabrication for the SeaGen next generation tidal energy device is complete. Itsinstallation in Strangford Lough is expected later this year. In January 2007, at the time of the AGM, the Board recognised that a ninthsuccessive annual increase in adjusted Group profit before tax would bechallenging but feasible. Events in the market place over the past five weekshave now caused the Board to reconsider this view and a reduction in Groupprofit before tax compared to market expectations for the year to 1 September2007 is now expected. 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 This information is provided by RNS The company news service from the London Stock Exchange