The company reported profit of £13.1 million ($20.8 million) for the year, compared to £10 million in 2011. Revenue was up 8% to £404.1 million, and EBITDA increased 19.6% to £18.4 million.
Agriculture revenue was up 7.7% with profit before tax (including contribution from associate and JVs) up 15.6%. Performance reflects high demand for low moisture feed blocks, particularly in the U.S., impact of acquisitions, and strong organic growth from retail and machinery.
“Our agriculture businesses are likely to be the main source of growth in 2013,” said Chris Holmes, chief executive officer, said. “The drivers of growth are the demand for Carr’s proprietary products for livestock across all markets as well as the expansion of the retail, machinery franchise, and fuel depot networks in the U.K.”
In agriculture, the business is increasingly focused on proprietary products developed to improve livestock performance and profitability. Following significant investment and research in this area, Carr’s is experiencing strong demand for its products in North America, Europe and New Zealand, as well as in the U.K., and expects this trend to continue.
The trading environment for agriculture during the period was broadly favorable, and although input prices were volatile, growth was primarily driven by feed block both in the U.K. and overseas, and retail and machinery sales in the U.K.
Revenue for the period grew by 7.7% to £293.8 million (2011: £272.7 million) with profit before tax increasing by 26.1% to £8.1 million (2011: £6.4 million).
Profit before tax, including contribution from associate and joint ventures, increased by 15.6% to £9.5 million (2011: £8.2 million).
Feed block sales increased by 24%, reflecting market share gains in the U.K. and overseas, and remain a prime source of growth in this division.
In the U.S., the northern states had a very dry, mild winter with little snow, a complete contrast to the previous period; whilst the southern states experienced heavy rain in the summer followed by a prolonged drought. These weather conditions generated the demand for low moisture feed blocks and this, combined with new business won, resulted in a 37% increase in Smartlic and Feed in the Drum sales.
In Tennessee, Gold-Bar Feed Supplements LLC, Carr’s 50% joint venture, is now in full production of high moisture feed blocks and is expected to contribute positively to revenues and profits for 2012-13. In April, full production of AminoMax, the patented rumen bypass protein, started at the 50% joint venture plant at Watertown, New York, U.S., after early engineering issues were resolved. The high quality of the product has been well received by U.S. dairy farmers and the plant is on track to achieving profitable sales for the current period. Investment is being made in a new by-pass amino acid product, Aminogreen, and once trials are concluded it is planned that production will commence alongside AminoMax.
Sales of low and high moisture feed blocks from Carr’s U.K. and German operations grew by 12% with continued growth of our branded product, Crystalyx, continuing throughout Europe and New Zealand. Scotmin, based in Ayr, increased profitability through a combination of production
efficiencies, increased sales of Megalix, and the introduction of the Megastart range marketed through the enlarged distribution network.
By contrast dairy feed sales remained static during the period, but overall compound feed sales were down 7%. Reduced margins for the period were affected by substantial increases in raw material prices, which are now showing some signs of easing.