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Restructure plans on the cards for Carr’s Group
In a strategic update included with the results, the board concluded that continuing with two divisions – engineering and agriculture – was an inefficient operating model due to the lack of synergistic benefits and resultant central overheads.
“The Board believes that both the engineering division and the agriculture division hold material value creation opportunities; however, the agriculture division will be optimised in the medium term through transformation plans developed and implemented by recently appointed management, whilst the engineering division represents a near-term opportunity,” said a spokesman.
Exploring options
Carr’s is now running a process to explore options to “maximise shareholder value” with regard to the engineering division.
The company reported revenue growth of 2% compared with the same period last year (£81.4m), while adjusted profit before tax remained flat at £5.6m – though Carr’s did report an increase of 0.6%.
Revenue for the agriculture division fell 7.5% on the prior year to £52.8m, with an adjusted operating profit of £4.9m (down 17.4%). Carr’s cited challenges in the US market, such as unfavourable contracts, cyclical herd size and ongoing regional drought conditions.
On the other hand, the engineering division has been growing strength to strength, reporting a 26.1% increase in revenue to £28.5m and more than double adjusted operating profit during the period (£2.4m)
Future prospects
Commenting on the results, chief executive David White said: “The growing profitability and future prospects of our engineering division make this the optimal time to explore options to realise value for that division.
“The significant opportunities to improve our market position in our agriculture division point to short term focus on optimising trading through challenging conditions and preparing that business for future growth built on the foundation of our leading brands. We now have the team in place to deliver the transformation necessary at divisional and central level.”
Meanwhile, frozen potato products manufacturer McCain Foods (GB) posted pre-tax profits of £77.3m for the year ended 30 June 2023.
