Carr's Milling Industries set its sights on acquisitions as far as New Zealand as the feed-to-engineering group unveiled a 40% profits jump, helped by factors from a strong US rebound to forward sales on wheat.

Richard Inglewood, the Carr's chairman, said the UK-based group, flush with cash from the sale of its fertilizer business to Ireland's Origin Enterprises, was exploring "acquisitions and investment opportunities".

Chris Holmes, the Carr's chief executive, said the deals "could be anywhere" geographically, and across the range of operations, which stretch from flour milling to robotics.

However, he singled out New Zealand as a "major opportunity for us", flagging a group strategy of building sales in foreign markets through exports before building in-country operations.

"We are moving rapidly in that direction in the market in New Zealand," Mr Holmes told Agrimoney.com.

Global reach 

"Strong" demand for the group's Crystalyx mineral feed blocks "was reflected in a substantial increase in exports" to New Zealand in the second half of the group's financial year, which ended on September 3, the results showed.

Dairy, in which New Zealand has expanded rapidly over the last decade to become the world's top exporter, is a major market for Carr's, whose products are aimed at improving livestock farming performance through diet quality.

"New Zealand is a great market for sheep as well," Mr Holmes said.

However, he also stressed the potential for acquisitions in areas such as the UK and Europe, besides the group's growth in the US, where it is opening two factories next week, and where the group's sales are "more beef oriented, but moving through to dairy".

'Good opportunity for making money'

Carr's said its US performance had recovered "well" since March, after a "disappointing" winter, when snows prevented deliveries.

However, a strong UK performance was a key driver behind a 12.1% rise to £7.0m in agriculture, on revenues up 27% at £272m, helped by boost to dairy farmers from milk prices which, "whilst remaining low during the year, have recently started to increase to more economically viable levels".

The group grew profits in UK compound feed despite higher grain prices, helped by forward purchases struck ahead of the rally's onset in the summer of 2010.

"In a rising [grain] market, if you got a forward book, it's a good opportunity for making money, unlike in a falling market," Mr Holmes said, adding that the group did not expect to achieve a similar benefit this year.

City reaction

Group pre-tax profits, excluding the impact of the fertilizer sale, rose 35% to £10.0m, on revenues up 25% at £373.3m, beating forecasts of analysts including Nicola Mallard at London broker Investec Securities.

"The outlook overall for Carr's remains favourable," Ms Mallard said, raising her target price on Carr's shares to 920p, from 905p, and noting the firm prospects for profits among farmers, the group's customers.

"Commodity markets in agriculture generally remain strong - farmgate milk prices have risen, which is good news for dairy farmers, and cereal prices, although off their peak, still stand some way above long term averages."

She added that the sale of the fertilizer division had "transformed" the Carr's balance sheet, leaving the group with net cash of £4.6m, compared with net debt of £15.5m at the close of the previous financial year.

Carr's shares stood 4.2% higher at 800p in afternoon deals in London.