Carr’s Milling Industries has posted record profits following the opening of a new mill last year.
New business gains and improved efficiency had contributed to a 7.8% increase in profit before tax to £16.6m in the 52 weeks ending 30 August 2014, up from £15.4m the previous year. EBITDA was up 9.1% to £20.4m, and basic earnings per share up 3.1% to 127.8p.
The company’s food division had benefitted from the opening of a £17m mill at Kirkcaldy last September. The investment in the site followed “substantial under-investment in flour milling” assets across the industry, said Carr’s, and was in reaction to increasing demands from customers for higher food-safety standards.
Carr’s has also gained new milling business and chief executive Tim Davies told The Grocer that, as a result of the gains, its Silloth bakery – which had been due to run at 75% capacity after Kirkcaldy became operational - was currently running at 92%.
Davies warned the current crisis in the dairy market – with prices collapsing as a result of reduced demand – would bring further difficulties for its animal feed customers and reduce confidence in the dairy industry.
“In our agriculture division, we anticipate the current year will be tough for our UK farming community with pressure on farmgate milk prices expected to remain,” he added. “However, we believe our diverse offering and broad geographic footprint will help to mitigate some of this impact.”
Davies said the business had made a “good start” to the current financial year. “We remain confident for the full year and excited about the long-term growth opportunities for the business,” he added.
Investec described the results as showing a year of “good progress”, and in line with expectations. It added that Carr’s operational diversity had enabled it to counter different weather patterns and offset some short-term challenges to its engineering division.
“The group’s diverse nature should stand it in good stead this coming year too, as it faces challenges from reduced farmgate milk prices which could impact on farmers’ spending power and some short term pressures on engineering, although the medium term outlook remains positive,” said Investec analyst Nicola Mallard. “The outlook for foods remains positive, with further efficiencies enhanced by recent new business wins.”
No comments yet