News last update:7 Aug 2012

Carr's Milling issues profit warning

Carr's Milling, the agricultural group, has warned that profits will fall for the full-year as a result of deteriorating margins across its businesses.

Carr's says food and certain parts of its agriculture division are affected while the feed block businesses, particularly in theUSA, are trading well, as is engineering.

The England Cumbria-based group said it expects a significant deterioration in its flour margins on the back of a massive increase in wheat prices and higher energy costs. The group said it envisages little change in the foreseeable future.

High cost raw materials
The higher cost of raw materials, particularly wheat and energy for the compound feed business has not been fully offset by the increases in sales prices, culminating in lower margins.

“Farm gate milk price received by dairy farming customers remains unsustainably low, with no certainty of a change in the coming months, exacerbated by delays in receipt of the Single Farm Payment,” it said in a statement.

Carr's Milling said the recent events have led it to reconsider its forecasts and now expects to see a reduction in group pre-tax profit compared with market expectations for the year to September 2007.

Less fertilizer purchases
Chief executive Chris Holmes believes that, at this early stage of the peak selling season, farmers will hold off fertiliser purchases and therefore sales will be down year-on-year, with lower margins.

On the positive side, feed block revenue in the US and the UK is ahead of budget and is higher than last year. The engineering division is trading slightly ahead of budget.

Editor AllAboutFeed

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