Shares in Carr’s Group pushed strongly ahead on Monday after the agricultural, food and engineering conglomerate posted an increase in half-year profits.
The Carlisle-based firm saw its stock rise by more than 8% in morning trading after it revealed a record first-half performance in which pre-tax profits climbed 5.4% to £10.6 million.
The improvement in profits came despite a 2.8% fall in revenues within the business to £208.6m.
Basic earnings per share for the period was up 9% to 8.5 pence from 7.8p a year earlier.
The company has long had a presence in Fife and opened a new £17m flour mill in Kirkcaldy in 2013, one of three operating within its food division.
Carr’s said all three mills had delivered an “excellent performance” during the period and sales volumes were higher than a year earlier.
However, it said revenues were lower overall due to weak commodity prices.
“The 2014 UK wheat harvest was large, however, bread making quality of home grown wheat was disappointing as a result of the below-average protein levels,” the company said in its interim management statement.
“Once again the flexibility provided by the portside locations of our two northern mills has meant that we have been able to source consistently good quality wheat from both the UK and overseas.
“The new Kirkcaldy mill continues to exceed initial expectations through improved operational efficiencies and an uplift in volumes.
“Our ability to produce the highest quality flour, coupled with our continuing high levels of customer service, has led to growing customer confidence and satisfaction.”
The firm, which recently changed its name from Carr’s Milling Industries, said its agriculture division had achieved a positive performance against a backdrop of falling UK farm incomes.
Sales of feed blocks in the UK grew significantly in the half-year although its performance was overshadowed by an “outstanding performance” in the US while retail sales at the group’s 27 country stores across Scotland, England and Wales also improved.
The firm’s engineering division did less well in the six months to February 28 with political and economic conditions in key markets impacting on the outcome.
However, Carr’s said the performance of its engineering branch remained in line with expectations for the full year.
Chief executive Tim Davies said the business had made progress during the first half and the positive trading trends were continuing.
“The strength of the group, with its international operations and diversity of business, has been demonstrated in the delivery of a record performance in the first six months,” Mr Davies said.
“This result has been achieved despite some challenging conditions in some of the markets within which we operate.
“Trading in the second half has started well and we remain on track to meet the board’s expectations for the full year.”
Analyst Nicola Mallard at Investec said: “A solid increase in first-half profits and a reiteration of confidence in meeting full year expectations should be well-received by the market, which has been nervous around agri company prospects.
“The group’s diversity and past investment has stood it in good stead to weather the current market conditions.”
Shares in Carr’s closed on Monday up 8.50 at 147.00.