Carr’s Group predicts pick-up in performance after slow start to the year

In a trading update for the 18-week period ending January 4, the group said its results for its agricultural operations – which include Carrs Billington – had been held back by the mild winter, while its engineering division had suffered a slow start to the year due to contract phasing.

The update was published ahead of the group’s AGM, where long-serving non-executive chairman Chris Holmes – credited with transforming Carr’s Group’s UK operations and guiding its overseas expansion – stepped down to make way for former Devro plc chief executive Peter Page.

On its financial performance, the group said the UK agricultural market “remained challenging”, with a reduced spend on feed and animal supplements because of the “unseasonably mild and dry weather” during the prior year. A cocktail of lower cattle and milk prices, rising costs and continuing Brexit uncertainty was also knocking farmer confidence and spend.

Market conditions across the pond in Carr’s Group’s other major agricultural market, the United States, were improving, it added, although the full year performance is expected to be “moderately behind” Board expectations.

The situation was also picking up in its engineering division, best known in Cumbria for Bendalls Engineering.

It was, said the group, in a “good position” following a slow start due to contract phasing, while its most recent acquisition – Barrow-based NW Total – was now fully integrated and “continues to perform well”. The performance of the division was now slightly ahead of the Board’s previous expectations, it added.

Carr’s Group chief executive, Tim Davies, said: “Despite a challenging start to the year in our Agriculture division, due to a number of weather and market factors, we are confident in the medium-term prospects for Agriculture.

“These near-term challenges in Agriculture are expected to be offset by a stronger than expected performance in our Engineering business, where the order books remain strong, in addition to lower central costs.

“Our investments in people, acquisitions and research, alongside our expanding international footprint, leave us well positioned for sustained growth.”

Meanwhile, Mr Davies also praised the work of outgoing Mr Holmes, who joined Carr’s Group as managing director of its agriculture business in 1991 before becoming group chief executive in three years later – a position he held until 2013 when it became chairman.

During his tenure the group’s net assets have risen from £12 million to £131m, in large part due to the expansion of its agricultural division across the UK, United States and Europe through product development and strategic acquisitions.

Its engineering division – now responsible for a third of the group’s operating profit – also expanded significantly through the acquisitions of Carlisle-based Bendalls Engineering, Wälischmiller Engineering in Germany and NuVision Engineering in the United States.

Mr Davies said: “From a solely domestic UK company on Chris’s arrival, it is notable that close to half of the Group’s total profits today come from its international operations.

“During Chris’s tenure he oversaw some of the toughest periods UK agriculture has witnessed, including the outbreak of Foot and Mouth disease in 2001 that caused devastation across British farming. It is testament to Chris’s leadership and vision that Carr’s emerged from this period of stress a stronger and fitter business.

“Chris has been a joy and an inspiration to work with and, on behalf of the entire Board, I’d like to place on record our thanks to him for his time, dedication and energy that he has given to Carr’s Group over the last 29 years, helping shape the successful business that it is today.”

Subject to shareholder approval at the group’s AGM, a final dividend of 2.5p per share for the year ending August 31 will be paid to shareholders on January 10.

Carr’s Group is set to issue its interim results for the 26-week period ending 29 February 29 on April 15.