Carr's Group: Both Divisions Slightly Ahead Of Expectations
Edison | Jul 18, 2018 06:22AM ET
The recovery in both US feed block sales and the UK manufacturing businesses noted at Carr’s Group's (LON:CARRC) AGM in January has continued through to the end of June. As both divisions are trading slightly ahead of management’s expectations at the interim stage, we raise our estimates again and revise our indicative valuation from 169p/share to 178p/share.
Positive trends in agriculture continue
As noted at the AGM and the interims, UK farming sentiment remains positive, resulting in feed volumes, retail sales, machinery sales and fuel sales all ahead of the prior year. The acquisition of Pearson (LON:PSON) Farm Supplies in October 2017 also benefited both retail sales and feed volumes. US feed block volumes continued to recover as cattle prices for producers improved. A favourable environment for dairy producers in Germany supported a further increase in feed block volumes from the German joint venture.
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