Carr's Group

LN: CARR

£153.5m market cap

167p 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

Carr’s trading update for the first 18 weeks of FY19 indicates that both divisions are performing well. As the group is trading in line with management’s expectations for the full year, we leave our estimates and indicative valuation of 182p/share 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 17.8 10.1
2018A 403.2 19.9 17.7 15.2 11.0 10.2
2019E 418.8 21.0 18.1 15.3 10.9 10.2
2020E 425.5 21.5 18.9 16.0 10.4 9.5
Last updated on 21/02/2019
Industry outlook

US feed block volumes continued to rise as the cattle price recovery has been maintained and penetration of the eastern states of the US has increased following the commissioning of the low moisture feed block plant in Tennessee in January 2018. UK farming sentiment remains positive. The UK Manufacturing order book, which includes long-term contracts from the nuclear industry, is strong. The recent $8.5m US contract for remote handling equipment from the German business demonstrates the benefits of working with NuVision (acquired August 2017) and helps top up Wälischmiller’s order book following completion of the substantial Chinese orders in FY18. NuVision’s own order book benefitted from two significant Mechanical Stress Improvement Process contracts, won during the summer, which extend to FY21.

Last updated on 21/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 21.5
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual 4.2 4.9 20.6
Relative* 0.7 0.8 21.6
52-week high/low 171.8p/125.0p
*% relative to local index
Key management
Chris Holmes Chairman
Tim Davies CEO
Neil Austin FD

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