London, UK, 27 January 2021

Carr's Group (CARR): Local, international and sustainable

Diversification means Carr's Group provides essential infrastructure to the global nuclear industry and occupies a critical position in food supply chains in the UK, the US and Europe. As a result, almost all of its businesses have remained operational during the coronavirus pandemic. While group profitability was adversely affected by the low oil price caused by the pandemic, we see potential for recovery driven by greater penetration of international markets for animal feed supplements during FY21 and a return to more normal oil prices from FY22 onwards.

Our DCF analysis gives an indicative value of 170p/share (unchanged). Confirmation that outperformance in the Agriculture division can compensate for the reduced Engineering revenues associated with a low oil price should, in our view, support the share price and help move it back towards our indicative valuation. So should news of the delayed major engineering order from Japan.

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