Carr's Group

LN: CARR

£135.6m market cap

149.5p last close

Carr’s Agriculture division serves farmers in the North of England, South Wales, the Welsh Borders and Scotland, the US, Germany and New Zealand. The Engineering division offers remote handling equipment and fabrications to the global nuclear and oil and gas industries.

Investment summary

Once again, Carr’s diversified model has enabled it to deliver profit growth despite well-publicised issues in the UK agriculture sector. Pre-exceptional PBT grew by 4.5% to £11.4m as a flat result from the Agriculture division was enhanced by a year-on-year performance improvement in Engineering. Group H119 revenues rose by 3.0% year-on-year to £206.2m, reflecting commodity price inflation and sales from Animax, which was acquired in September 2018. Noting this resilience, we leave our estimates and valuation unchanged.

Y/E Aug
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 346.2 13.9 11.9 9.4 15.7 8.9
2018A 403.2 19.9 17.7 15.2 9.7 9.0
2019E 418.8 21.0 18.1 15.3 9.6 9.0
2020E 425.5 21.5 18.9 16.0 9.2 8.4
Last updated on 22/05/2019
Industry outlook

Growth in the US feed block market and the Engineering division more than offset reduced volumes of feed, feed blocks, fuel and animal health products caused by the mild autumn and winter in the UK and lower revenues from sales of machinery. Machinery sales are linked to farmer confidence, which weakened recently because of continued uncertainty over Brexit. Net debt rose by £7.9m during the period to £23.3m. As well as the seasonal increase in working capital, there was £4.7m (net) paid out for Animax.

Last updated on 22/05/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 21.5
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual 0.0 (14.2) 2.8
Relative* 4.0 (14.7) 11.1
52-week high/low 173.0p/130.0p
*% relative to local index
Key management
Chris Holmes Chairman
Tim Davies CEO
Neil Austin FD

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