A trading update from international animal feed manufacturer Carr’s Group reveals that the Covid-19 pandemic has made no material impact on trading so far this year.
The UK-based company said overall trading across its agricultural and engineering divisions remains in line with board expectations for the current financial year in the 19 weeks to July 11th 2020. The financial year ends on August 29th.
“The Agriculture division is currently trading ahead of expectations,” the Group reported. “In the UK, farmers are maintaining normal livestock operations and a marginally higher demand for feeds, supplements and fuels has enhanced revenues. In the USA, lower cattle prices attributable to Covid-19 have adversely impacted sales of supplements.”
The company explains that very dry spring weather in the UK inhibited forage growth and resulted in marginally higher demand for feeds, feed supplements and fuels. In the US, the closure of large meat processing plants in the US due to Covid-19 outbreaks forced cattle prices lower, which affected demand for feed supplements there.
Carr’s expects the low US cattle prices and weak demand for supplements to maintain into the next financial year.
The Group’s Engineering division has been affected by some temporary interruption to nuclear and defence projects due to the pandemic and has also suffered from the consequent decline in oil prices which has reduced customer oil and gas investment.
Well placed to trade through Covid-19
The Group said it remains well placed “owing to its strong and diverse businesses, robust financial position and the ongoing demand across the majority of its markets for the provision of essential products and services. “The Group continues to trade through the COVID-19 pandemic with no material financial impact seen to date,” it stated.
The Group is to pays its deferred interim dividend from the first half ended February 29th 2020 as a single interim dividend of 2.25 pence per share in October 2020. Analyst Edison estimates full year 2020 profits of £15.2m on revenues of £372m, compared to the £18.9m ad £403.9 in the year to end August 2019.
The Carr’s Group share price stood at £113.75 at 11.40 Wednesday morning, 5.3% up on the previous day’s close of £108.40.