Carr’s of Carlisle explores options for engineering unit

Carlisle-based agriculture and engineering firm Carr’s Group announced that it is “running a process to explore options to maximise shareholder value” for its engineering division.

Announcing a strategic update and its results for the six months ended February 29, 2024, Carr’s Group said: “… the board has concluded that continuing with two divisions (agriculture and engineering) is an inefficient operating model, particularly given the lack of synergistic benefits and resultant central overheads, both of which are dilutive to management’s and investment focus.

“The board believes that both the engineering division and the agriculture division hold material value creation opportunities; however, the agriculture division will be optimised in the medium term through transformation plans developed and implemented by recently appointed management, whilst the engineering division represents a near-term opportunity.

“The board is therefore running a process to explore options to maximise shareholder value with regard to the engineering division.”

Carr’s Group said first-half revenues increased 2% to £81.4 million, reflecting growth in engineering of £5.9 million (26.1%), somewhat offset by a reduction in agriculture revenue of £4.3 million (7.5%).

Adjusted profit before tax was unchanged from the prior year at £5.6 million.

Interim dividend rises 100% to 2.35p per share “reflecting previously announced policy of a single interim dividend and final, rather than two interims and final.”

In its outlook, Carr’s Group said: “Trading conditions in agriculture remain challenging, particularly in the US. 

“The board expects this to continue through the current financial year, while retaining confidence in prospects improving in the medium to long term. Our short-term focus is on ensuring that performance is optimised during persistently challenging conditions whilst making the changes necessary to deliver longer term value creation. 

“The engineering division delivered a strong first half performance, building on FY23. The board remains confident that order book levels will enable year-on-year growth during FY24, while also providing confidence beyond the current financial year. Board expectations for FY24 remain unchanged.”