Origin Enterprises flagged a boost to profits so far in 2012 from the poor farming weather, as growers sought agronomic advice, and forecast support ahead for its feed operations, with poor crops depleting farm fodder supplies.

Shares in the owner of the Agrii and Dalgety agricultural brands hit a four-year high.

The group said that its UK agronomy services operations "performed strongly" as farmers sought advice on how to tackle weather extremes, with early spring drought giving way to one of the wettest summers on record.

"Farm management plans were significantly impacted by particularly challenging weather conditions," Origin Enterprises said.

"Adverse weather patterns require a rapid agronomy response and emphasise the central role of customised crop management programmes in securing grower profitability."

Livestock implications

In Poland, its Dalgety operations tapped demand for agronomy services and certified seed after losses to seedlings from a "short but severe winter period" boosted spring replantings.

And Origin said that its UK feed operations were placed for a further boost, with this year's poor UK growing conditions presenting a potential headache to livestock farmers.

"Increased demand for feed is expected in the coming year reflecting the depletion of winter fodder stocks due to weather," Origin said.

The wet summer dented production of fodder crops such as corn and hay, besides slashing UK wheat production, which on Strategie Grains estimates will tumble more than 1m tonnes to a little over 14m tones, on a yield of 6.95 tonnes per hectare, a 20-year low.

Furthermore, many farmers ran down feed supplies as the poor weather forced them to keep inside animals normally grazing in the summer months.

Dividend hike

Indeed, Origin's feed business enjoyed a rise in sales volumes in the February-to-July half thanks to the "unusual" weather.

But the impact on profits was eroded by a drop in margins thanks to strong competition and "sustained price volatility", which "provided little incentive to the market to execute forward volume commitments".

Fertilizer consumption dropped too, with the poor conditions restricting field work.

The group's agriculture profits overall rose 5.6% to E69.7m for the half year, on revenues up 6.6% at E1.26bn.

Including one-off factors, including a writedown in the value of investment properties, earnings per share dropped 7.5% to 31.86 euro cents per share.

However, the the underlying result and "confidence in the future performance of the group" prompted Origin to lift its full year dividend payout by 36% to E0.15 per share.

Market reaction

The results were termed "strong" by Davy analyst John O'Reilly, who restated an outperform rating on Origin shares.

"The 36% increase in the annual dividend is an obvious highlight of a very robust reported and very good underlying performance," Mr O'Reilly said, adding that the move "hallmarks confidence".

"Cash generation was as good as ever, the balance sheet is very strong and creates plenty of scope to invest, and the investment record is good."

Rival Dublin broker NCB restated a "buy" recommendation on Origin stock, with a price target of E4.80.

The shares hit E4.35 in early deals in Dublin, their highest since July 2008, before losing some ground to end at E4.30, a gain of 1.9%.