Carr's Group PLC Trading Update (9541A)
March 30 2017 - 1:01AM
UK Regulatory
TIDMCARR
RNS Number : 9541A
Carr's Group PLC
30 March 2017
30 March 2017
Carr's Group plc
"Carr's" or the "Group"
Trading Update
Carr's (CARR.L), the Agriculture and Engineering Group, today
announces the following trading update ahead of announcing its
first half results for the 26-week period ended 4 March 2017.
As a result of challenges to mitigating the impacts of a
previously announced delay to a significant contract in the UK
Manufacturing business, together with a slower than anticipated
recovery in USA cattle prices impacting our feed block performance
in that region, the Group's performance for the current financial
year is anticipated to be significantly below the Board's existing
expectations.
Engineering
As previously announced in the Group's trading update on 10
January 2017, the Engineering division had a slower than expected
start to the current financial year as a result of a significant
contract delay in the UK Manufacturing business that was expected
to impact upon production activity throughout this financial year.
The Board has focused on mitigating the financial impact of this
delay through (i) cost-cutting, (ii) winning new work to replace
the delayed contract and (iii) accelerating the existing order
book. While progress has been made with cost-cutting, winning
sufficient new work in the short term and accelerating the existing
order book has been challenging, especially in the oil and gas
market. Consequently, despite some success, the level of new work
secured has been insufficient to mitigate the impact of the
delay.
The Remote Handling business continues to perform well, ahead of
the Board's expectations, including certain large contract wins in
China. The integration of the recently acquired STABER business is
also progressing in line with Board's expectations.
In the medium term, the engineering division continues to
operate in a recovering nuclear market, with some significant
contract wins in the last 18 months, and management has identified
further potentially material opportunities in adjacent markets of
defence, new nuclear and aerospace.
Agriculture
As also announced in the 10 January 2017 trading update, volumes
and margins in our USA feed block business have been under pressure
as a result of falling cattle prices for producers. This pressure
continued for a longer period than originally forecast and although
cattle prices have begun to increase, the recovery in that market
is now expected to be slower than anticipated. Consequently, this
will result in significantly reduced profitability in our USA feed
block business as the market recovers in the short to medium
term.
In contrast, UK Agriculture continues to see encouraging signs
of returning customer confidence, driven by improving returns for
dairy farmers. The UK Agriculture business has continued to perform
well and is now anticipated to exceed the Board's expectations for
the current financial year. Feed blocks continue to be an exciting
opportunity for growth, and our strategy of international
expansion, particularly penetrating into some of the South American
markets, remains unchanged.
The Company will provide a further update on trading with its
Interim Results on 12 April 2017.
Enquiries:
Carr's Group plc Tel: +44 (0) 1228 554
600
Tim Davies (Chief Executive)
Neil Austin (Group Finance
Director)
Powerscourt Tel: +44 (0) 20 7250
1446
Nick Dibden / Lisa Kavanagh
About Carr's Group plc:
Carr's is an international leader in manufacturing value added
products and solutions, with market leading brands and robust
market positions in Agriculture and Engineering, supplying
customers in 35 countries around the world.
Its Agriculture division manufactures and supplies feed blocks
for livestock, farm machinery and runs a UK network of rural
stores, providing a one-stop shop for the farming community. Its
Engineering division designs and manufactures bespoke equipment for
use in the nuclear, petrochemical, oil and gas, pharmaceutical,
process and renewable energy industries, including robotic and
remote handling equipment.
This information is provided by RNS
The company news service from the London Stock Exchange
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