Agriculture, food and engineering combine Carr's (CARR) cultivates a 10.1% gain to 152.5p early on, after reporting another record first half performance. Amid volatile market conditions, strong results demonstrate the resilience of the business, while news of a positive start to the second half helps the shares higher.
You can spin through the interim results in detail here, though the key takeaways include a 5.4% pre-tax profit gain to £10.6 million and an 8.8% dividend hike to 0.925p. Founded in Carlisle back in 1831 as a baker and flour dealer and listed on the London Stock Exchange since the early 1970s, Carr's is one of the market's few remaining conglomerates.
Indeed, CEO Tim Davies attributes the record first half turn to Carr's operational and geographic diversity – our Griller interview with Davies from last June provides in-depth details on the benefits of the broad-based business model and how technology and innovation represent common group-wide themes.
The £125 million cap serves customers around the world from a factory footprint spanning the UK, Europe and North America. Moreover, its services include the manufacture and supply of everything from flour and livestock feed blocks to robotic and remote handling equipment for the oil and nuclear industries.
Profits growth in the seasonally-important half was driven by the agriculture and food divisions. Carr's agriculture business shrugged off reduced demand from UK dairy farmers for AminoMax, its patented rumen bypass protein product, caused by a dip in farmgate milk prices, to deliver a positive performance. This was driven by buoyant sales of branded feed blocks in the USA, supported by a recovery in the beef industry, as well as retail sales growth underpinned by investment in Carr's UK retail country store network.
Carr's also reports growth in its food division, where its new Kirkcaldy mill in Scotland attracted new customers and is experiencing both an uplift in volumes and improving efficiency gains. The one disappointment was the engineering division, where profits reduced 18% year-on-year. Profits were impacted by geopolitical difficulties with Russia and a decline in the global oil price, which depressed investment by the Chirton Engineering arm's customers in the oil exploration sector. The good news is both the Walischmiller and Carrs MSM businesses, focused on the nuclear industry, continue to perform well and management expects a second half divisional recovery.