Profits have risen at food, agriculture and engineering group Carr’s after a £17 million investment in a state-of-the-art flour mill in Fife started to pay off.
The Cumbrian-based firm saw its bottom line improve by 7.8% to £16.55m in the year to August 30, despite revenues falling back 8.4% on 2013 to £429m.
The company’s food division which includes the revamped Kirkcaldy flour mill operation, which began operating last summer was the star performer of the 12-month period.
While total revenues dropped from £94.1m to £87.1m in the year, profits soared from £559,000 in 2013 to £2.29m.
Chief executive Tim Davies said the performance of the new Kirkcaldy facility had helped deliver increased profits despite a fall in wheat prices.
“The first wheat was milled at our new mill in Kirkcaldy in the summer of 2013,” Mr Davies said.
“The commissioning process went well, and the mill is now meeting all expectations with regards to performance and reliability.
“The benefits of the new mill have been delivered from improved operational efficiency, and the commercial benefits derived from increased customer confidence in our ability to produce high quality flour, milled to the highest standards of product integrity.
“We expect to deliver further increased financial benefits from the new mill during the next financial year.”
The firm’s agriculture division remained the largest single division, with profits marginally ahead at £12m compared with an £11.5m return in 2013, despite sales falling by £25m to £315m compared to its performance a year ago.
Carr’s engineering arm went backwards, with revenues down £6.5m and profits around £500,000 lower at £3.71m.
The firm’s other operations, including outgoings related to its head office in Carlisle and group administrative function, saw losses increase to £1.52m from £981,000.
Overall, Ebitda (earnings before interest, taxation, depreciation and amortisation) for the year came in 9.1% ahead at £20.4m, and the group proposed an interim final dividend of 17p, a 3% rise resulting in a total dividend for the year up 2p to 34p.
Chairman Chris Holmes said the firm had delivered another year of record pre-tax profits.
“This achievement can be attributed to a strong operational performance across the business,” Mr Holmes said.
“Each division performed well, driven by the benefits from research and development, innovation, global geographic diversity and the strategic investments the board has made.”
Mr Holmes also said the firm’s diverse business base and broad geographic footprint would help mitigate the effects of an expected “tough year” ahead for the UK farming sector.
“Despite the very mild weather, the current financial year has started in line with the board’s expectations,” he said.
“With a strong balance sheet and well-invested assets, and with our continuing investment programme across the group, we remain well placed to capitalise on future opportunities.
“The board will continue to look at how best to maintain growth and achieve optimal returns for its shareholders via both organic and acquisitive growth, including expanding our geographic footprint.”
Shares in Carr’s Milling Industries closed down 51p or 3.09% at 1,600p yesterday.