Resilient agriculture, food and engineering combine Carr's Milling Industries (CRM) cultivates a 13p gain to £17.63 as investors welcome today's reassuring trading statement. CEO Tim Davies flags another strong performance over the 19 weeks to 12 July and assures year-to-August forecasts will be met.
'Our geographic diversity and continued investment has ensured that we are at the forefront of innovation, technology and design,' says Davies. 'This has resulted in a strong performance across every division during the period,' says the boss, clearly confident Carr's can meet the £16.5 million (2013: £15.4 million) pre-tax profit figure forecast by Oriel Securities.
Founded in Carlisle in 1831 as a baker and flour dealer and listed on the London Stock Exchange since the early 1970s, the running Shares Play of the Week is a rarity among quoted companies. It is one of few remaining conglomerates and its activities span three sectors – agriculture, food and engineering – which appear only loosely connected and boast differing market dynamics.
Ahead of preliminary figures (10 Nov), the £155.3 million cap's latest missive flags positive strategic progress in the core agriculture division. In particular, Davies highlights growing sales of AminoMax, a patented rumen bypass protein product aimed at high-performing dairy farmers, as well as burgeoning global demand for Carr's innovative range of feed blocks.
Elsewhere, Carr's continues to invest in its food division, a producer of flours used in bread and biscuits to bakeries, food manufacturers and retail multiples supplied from mills in Scotland, Cumbria and Essex. Davies insists Carr's is reaping the operational and commercial benefits of its £17 million investment in a port side mill at Kirkcaldy, which has now been up and running for ten months.
Lastly, he draws attention to some welcome developments in engineering. This is the highest margin part of the group, a division designing and making bespoke equipment for use in the nuclear, oil and gas, petrochemical and pharmaceutical industries, with products ranging from manipulators and robotics to specialist fabrication. Encouragingly, the update contains news of a contract extension with BP Shah Deniz as well as robust demand for nuclear industry manipulators under a 'life of plant' deal with Sellafield.
For more in-depth details on Carr's growth strategy and the benefits of its broad-based business model, read our recent Griller interview with Davies.