Carr’s Group is well-prepared to ride the impact of coronavirus and steer a return to growth despite reporting a fall in profits for the first half of the year.

That is the verdict of the Carlisle-headquartered agricultural and engineering group’s chief executive, Tim Davies, after publishing its half-year results for the period ending February 29.

Carr’s Group issued a profit warning last month, blaming challenging agricultural markets in the UK and United States and delays to orders for its engineering division.

Revenues dipped three per cent to £200 million compared to the same period in 2019, adjusted operating profit fell 13.4 per cent from £11.9m to £10.3m and adjusted pre-tax profits by 16 per cent from £11.4m to £9.6m for the 26-week period.

The group did however stress the strength of its balance sheet.

Net cash generated from operating activities rose to £4.9m compared to £3.8m in the previous year, while net debt stood at £25.4m and undrawn facilities at £22.4m.

While a dramatic fall in demand for the group’s agricultural feeds and supplements along with delays to orders from Japan and China for robotics equipment lay behind the “disappointing” financial performance, the group said there had been “no material impact to date” due to coronavirus although “significant uncertainty remains”.

Mr Davies told the Cumberland News that while a return to growth in the medium term was a key focus, the health of its 1,500-strong workforce based in Cumbria, the United States and Germany remained its top priority amid the continued spread of Covid-19.

“The business is doing OK – we delivered a resilient performance in the period given what happened across the two divisions,” he said.

“While the results are disappointing in light of the record performance the year before, we remain robust and financially solid. We are very fortunate to have headroom. You only run out of cash once.

“A lot of our projects are critical in nature and therefore we have to keep going. The key priority is to keep everyone safe and ensure they are being very careful and following the strict regimes we have put in place. Our people are working amazingly well.”

Mr Davis said the vast majority of its employees were continuing to work. Around a quarter are currently working from home while only 40 have been put on Government-backed furloughed. Just three per cent of workers are absent compared to the 11 per cent recorded at the start of the virus outbreak.

On the outlook for the Carr’s Group, Mr Davies said: “We are confident that our approach and robust business model will ensure we are well placed to endure this period of uncertainty and continue to deliver growth in the medium term.

“We have to keep looking forward and we’re continuing with our long-term planning meetings, three-year budgets and so on. Of course, we are having to deal with the day-to-day of keeping operational during Covid-19, but to focus on that alone would be taking a very narrow view.

“We will come out of this at some point, and when we do, we will be ready to push on.”

Carr’s Group includes Carrs Billington and engineering businesses Bendalls Engineering in Carlisle and NW Total in Barrow, along with Wälischmiller Engineering based in Germany and NuVision Engineering in the United States.

While Mr Davies has said the outlook for agriculture was difficult to predict, its engineering arm should return to growth soon, with the delayed orders bound for the Far East to land on the balance sheet next year.

Nevertheless, the Carr’s Group Board says it anticipates its financial results for the full year to be significantly below expectations.

It has also deferred payment of an interim dividend to shareholders “until such time as the full effects of the pandemic have become clearer”.

It added that this decision would be revisited in its next trading update, expected in July.