21 December 2023
CARR’S GROUP PLC
FULL YEAR RESULTS
For the year ended 2 September 2023
Carr’s Group plc (CARR.L), (”Carr’s, the ”Company”, or the ”Group”) the Speciality Agriculture and Engineering Group, announces its audited results for the year ended 2 September 2023.
Financial Highlights
| Adjusted (Continuing Operations) | FY23 | FY22 | +/-% |
| Revenue (£’m) | 143.2 | 124.2 | +15.3 |
| Adjusted operating profit (£’m) | 8.0 | 11.9 | -33.2 |
| Adjusted profit before tax (£’m) | 7.5 | 11.2 | -33.2 |
| Adjusted earnings per share (p) | 6.2 | 10.0 | -38.0 |
| Statutory (Continuing Operations) | FY23 | FY22 | +/-% |
| Revenue (£’m) | 143.2 | 124.2 | +15.3 |
| Operating profit (£’m) | 2.0 | 8.2 | -76.3 |
| Profit before tax (£’m) | 1.5 | 7.6 | -80.1 |
| Basic earnings per share (p) | |||
| Continuing Operations | 0.4 | 6.4 | -93.8 |
| Discontinued Operations* | (0.7) | (3.5) | |
| Reported | (0.3) | 2.9 | -110.3 |
| Dividend per share (p) | 5.2 | 5.2 | – |
| Net cash / (debt) (£’m) | 4.2 | (14.0) | |
*FY22 restated in relation to the loss recognised on the measurement to fair value less costs to sell (see note 10)
Continuing Operations Highlights
· Engineering Division
− Adjusted operating profit of £5.3m (FY22: £5.4m) with strong second half performance.
− Record multi-year forward order book £60m (FY22: £41m) reflecting favourable long term macro trends supporting the nuclear sector, power, defence and medical segments.
· Speciality Agriculture Division
− Revenues increased 18.7% on prior year with material selling price increases to recover input prices offsetting volume reductions.
− Adjusted operating profit of £5.6m (FY22: £9.2m).
− Trading volumes in both key markets impacted by drought conditions in parts of the USA and continuing high farm input costs in the UK supressing demand.
− The challenging market conditions in both markets are continuing, however, the Board expects to return to growth in the medium to long term.
· Central Costs
− Central costs of £3.0m (FY22: £2.6m).
− Cost reduction measures underway in FY24.
· Adjusting Items
− £6.0m of adjusting items (pre-tax) comprising:
§ £4.8m of adjusting items are non-cash items, £3.8m of which is a write down of goodwill and other intangible assets arising primarily as a result of discount rate movements,
§ £1.2m of restructuring and other non-recurring cash costs.
· Net Cash / Debt
− Year end Net Cash of £4.2m (FY22: Net Debt £14.0m) – movement driven primarily by proceeds of sale of Agricultural Supplies division and investment of £8.3m in targeted working capital and cap-ex.
− Final consideration of £4m from disposal of Agricultural Supplies division received post period end.
· Dividends
Final dividend of 2.85p per share results in dividends for the year of 5.2p per share (FY22: 5.2p).
Strategic Highlights
· Agricultural Supplies Division disposal completed on 26 October 2022 with total cash proceeds of £29.9m, before the deduction of £0.8m in respect of property rental terms agreed with Billington Group, with the final £4.0m received in October 2023.
· Sale proceeds utilised to date in:
− Net Debt reduction
− Capacity improvements within Engineering Division
− Other opportunities to increase shareholder value are being evaluated and will form part of future updates
· Board and management transition with appointment of Tim Jones (Non-Executive Chairman), Gillian Watson (Non-Executive Director and Senior Independent Director), David White (Chief Executive Officer), Gavin Manson (Chief Financial Officer) and Martin Rowland (Executive Director of Transformation).
· Board and new Executive team are reviewing the performance, composition and organisation of the Group’s operations.
· Group Bank Facilities of £25m extended to December 2026.
Outlook
Trading conditions in agriculture remain challenging and the Board expects this to continue through the current financial year, while retaining confidence in prospects improving in the medium to long term. The Engineering division delivered a strong second half performance during FY23 and the order book levels will enable year-on-year growth during FY24, while also providing renewed confidence beyond the current financial year. At this early stage in the new financial year expectations for FY24 remain unchanged.
Quote: David White (Chief Executive Officer)
“Despite the headwinds impacting Speciality Agriculture we are making significant progress on our plans to increase market penetration, integrate our businesses to optimise performance and reduce costs; and leverage supportive trends. We expect challenging trading conditions in Speciality Agriculture to continue through the current financial year but are focused on managing current performance and positioning the division for growth on market recovery. The Engineering order book levels will help deliver year on year growth during FY24 and beyond, with operational leverage in that division providing attractive returns.”
Quote: Tim Jones (Non-Executive Chairman)
“The Carr’s brand has a deservedly strong reputation which is supported by a leading market share in the UK, an exciting range of product innovations and new licence approvals alongside compelling opportunities in overseas markets. Notwithstanding the challenging conditions presently being felt across the agricultural sector the Company is firmly focused on market penetration, the reduction of its costs and optimising shareholder value.”