Agriculture, food and engineering conglomerate Carr’s Milling Industries yesterday said its diversity as a business was helping it to progress in “challenging times”.
However, shares in the Carlisle-headquartered firm, which operates a £17 million mill in Kirkcaldy, edged lower as Carr’s failed to excite investors with an unchanged full-year forecast.
In an interim update to the markets covering the 19 weeks to January 10, the company said each of its three main divisions was operating in line with expectations.
The firm said its food division, which includes its newly invested Fife operation, was trading ahead of the previous year.
“The Kirkcaldy mill is continuing to deliver the operational and commercial benefits that were demonstrated in the results for the year ended August 30, 2014,” Carr’s said.
“Flour sales volumes are higher than last year but, as a result of lower wheat prices, revenue is lower.
“The quality of flour, food safety and service levels are benefiting the business.
“Against a backdrop of ongoing volatility in wheat markets, Carr’s continues to benefit from long-term established relationships with our customers, and remains positive about the performance of the division for the remainder of the financial year.”
The firm said its agricultural operation in the UK had been impacted by a combination of the mild autumn, slow start to winter and declining farm incomes due to the falling milk price.
Animal feed sales were on a par with the previous year but the retail business performed well, with sales up on 2013.
Carr’s said its engineering division was trading as anticipated, with MSM enjoying a strong start to the year and Bendalls working to near capacity on a major pressure vessel supply contract for BP’s Shah Deniz gas pipeline in Azerbaijan.
Shareholders were brought up to speed with developments at the company’s annual meeting yesterday.
All resolutions proposed at the AGM went through, and authorisation was granted for a share division scheme which will see ordinary shares of 25p subdivided into 10 new shares of 2.5p each.
The group said its financial position remained strong, although net debt had climbed to £30.4m by November 29 from £24.6m at August 30.
Carr’s said that cash outflow since the year end was due to the seasonal working capital increases in the agriculture businesses.
“We are encouraged by Carr’s performance to date in the current financial year,” chief executive Tim Davies said.
“Whilst the sectors in which Carr’s operates are experiencing challenging times due to a variety of external factors, the group’s geographical spread, investment in assets, and ongoing commitment to innovation continue to support the group’s development.
“We remain confident in the long-term success of the group, and the board’s expectations for the full year remain unchanged.”
Shares in Carr’s closed down 27p or 1.69% at 1,570p yesterday.