Carr's Group Achieves Record Profits In FY15
Edison | Nov 27, 2015 01:54AM ET
Strategy drives profits growth in challenging markets
Carr`s Group PLC (L:CARRC) operates in fairly defensive markets and has further reduced risk through diversification in each market served, supported by a sequence of acquisitions. Management achieved another year of record profits in FY15 through sustained investment in product innovation and infrastructure. We expect this strategy to maintain FY16 profits at these record levels despite challenging conditions in some of the markets served. Our sum-of-the-parts analysis indicates that the stock is undervalued at current levels.
Strategy decouples prospects from UK agriculture
In our opinion, Carr’s stands out from other listed companies in the agricultural supply sector, because its innovative feed supplement products address the global trend for farmers to adopt more sophisticated feed regimes. These are required in order to keep up with the growing demand for meat and dairy products, driven by a rising global population and increased adoption of westernised diets. This gives scope for substantial growth in both the UK and international agricultural markets, decoupling Carr’s prospects from those of the fairly static UK feed market and reducing exposure to the vagaries of the British climate and EU farming policy.
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