Fevara Plc · LSE:FVA
Fevara — Carr's Milling Industries — FY2010 Earnings Presentation
21 slides from Fevara's earnings presentation, Nov 8, 2010
Slide 1: Carr's Milling Industries PLC Preliminary Results Presentation
CARR’S MILLING INDUSTRIES PLC “the trends are positive” Preliminary Results Presentation 8 November 2010
Slide 2: Carr's Milling Industries PLC
Carr’s Milling Industries PLC Established, profitable agriculture, food and engineering group Operations primarily in UK, but also in USA and Germany Strategy of organic and acquisitive growth Progressive dividend policy Highly experienced management team 1
Slide 3: Divisional Structure
Divisional Structure Animal Feed UK dairy, beef and sheep compound and blended animal feeds UK speciality feed (“AminoMax”) Agriculture UK / USA / Germany feed blocks (“Crystalyx”, “Smartlic”) Fertiliser UK standard fertiliser UK speciality fertiliser (AVAIL) Agriculture retailing UK far
Slide 4: Key Macro Drivers for Carr's
Key Macro Drivers for Carr’s Activity Key Cost Inputs Key Demand Driver Animal Feed Feed wheat, proteins, Milk price molasses (etc) Agriculture Fertiliser Nitrogen, phosphate, potash Milk price and wheat price Agricultural supplies N/A Overall farming profitability Food Food Flour Milling wheat Vola
Slide 5: Strategy
Strategy Build on business and management strengths Development of niche products Selective geographic expansion Opportunities from growth in nuclear expansion Organic and acquisitive growth £9m invested in business in 2009/10 Three dividend payments a year 4
Slide 6: Results Overview
Results Overview Pre-tax profit increased 27.4% to £9.0m (2009: £7.0m) Fully diluted EPS increased 27.4% to 64.1p (2009: 50.3p) Full year DPS increased 4.3% to 24.0p (2009: 23.0p) Net debt reduced 19.7% to £15.5m (2009: £19.3m) Gearing reduced 44.7% (2009: 64.7%) despite £6.0m spend on acq
Slide 7: Agriculture – Retailing and Fuel Distribution
Agriculture – Retailing and Fuel Distribution Sales growth of 2% in retail stores, despite price deflation Network of stores now 19 following bolt-on acquisitions of A C Burn and Forsyths of Wooler Farm machinery activities boosted by new Kuhn franchise Fuel distribution benefited from sever
Slide 8: Agriculture - Feed
Agriculture - Feed Severe winter weather positive for feed volumes, Carrs able to provide excellent service to customers Milk price remains depressed – and surely must recover (farmgate price down 2p/litre from 2008 Focus on value added products: AminoMax, bypass protein, Scotmin range of feed
Slide 9: Agriculture - Fertiliser
Agriculture - Fertiliser Sharp recovery in profitability Volatility of past few years giving way to a more stable market Investment in new value added products like AVAIL as well as environmentally- oriented brands Margins satisfactory despite input price pressure from phosphates and nitroge
Slide 10: Fertiliser Raw Material Price Movements
Agriculture – Fertiliser Fertiliser Raw Material Price Movements Sept 06 - Oct 10 700 600 Cost (£) per Tonne 500 POTASH (MOP) 400 PHOSPHATE (DAP/MAP) 300 NITROGEN (CAN) 200 100 0 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Da
Slide 11: Food
Food Significant industry over-capacity in flour milling Customers suffer severe pricing pressure Environment may not be worsening but no improvement in demand/pricing visible New range of speciality flours to leading UK food retailer 10
Slide 12: Food: UK Milling Wheat Prices
Food UK Milling Wheat - Liverpool (HGCA) 240 220 200 180 £/mt 160 140 120 100 August September October November January February March April June July 2009/2010 2010/2011 (Liffe +£42) Liffe 10/11 Linear (2009/2010) Price soars in July/August 2010 11
Slide 13: Engineering
Engineering Small drop in profit due to shortfall at Carrs MSM caused by major customer cutbacks in stock Bendalls improved in second half and order book is expanding Bendalls secures contracts in Australia and the USA Wälischmiller – performing well – strong flow of orders/contracts from Ge
Slide 14: Income Statement
Income Statement Year ended August 2010 2009 Revenue PBT Revenue PBT £m £m £m £m Agriculture Trading 203.0 5.2 197.4 5.2 Agriculture Manufacturing 59.0 2.5 57.6 (0.1) Food 67.1 1.5 79.0 2.1 Engineering 15.8 1.0 15.9 1.1 Other (Head Office, etc) 0.1 (0.8) 0.1 (0.7) 345.0 9.4 350.0 7.6 Retirement Bene
Slide 15: Cash Flow Statement
Cash Flow Statement Year ended August 2010 2009 £m £m Operating profit 10.0 8.4 Depreciation/amortisation 3.9 3.5 Working capital inflow/(outflow) 6.5 (0.2) Interest paid (1.0) (1.3) Tax paid (1.7) (3.0) Other – Pension contribution (2.8) (2.5) Other – non-cash items 0.4 0.7 Generated by operating a
Slide 16: Summarised Balance Sheet
Summarised Balance Sheet Year ended August 2010 2009 £m £m Non-current assets 47.9 44.6 Current assets 89.8 77.4 Current liabilities (62.2) (46.9) Non-current liabilities (36.2) (41.8) Net assets 39.3 33.3 Minority interests – equity (4.6) (3.4) Equity shareholders’ funds 34.7 29.9 Net debt 15.5 19.
Slide 17: Progressive dividend
Progressive dividend Three dividend payments a year Two dividend payments of 6p per share paid in May and October 2010 Final dividend of 12p per share, subject to shareholder approval Final dividend will be paid on 21 Jan 2011 to Shareholders on the register at close of business on 24 Dec 20
Slide 18: Investment in business
Investment in business Scotmin Nutrition Ltd & A C Burn Ltd Acquired from Buccleuch Country Ltd for joint consideration of £5.62m in June 2010 Synergies with Caltech distribution Enhance earnings for full year 2011 Forsyths of Wooler Acquired in September (post year-end) for £0.72m Expand
Slide 19: Carr's Five Year Record
Carr’s Five Year Record 372.3 12.8 350.0 345.0 9.2 242.6 252.8 7.3 7.1 6.1 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Profit before Revenue £m tax* £m 108.7 24.0 23.0 23.0 19.0 18.0 65.7 59.7 56.0 51.0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Adjusted earnings Dividends per per share
Slide 20: Keys to Growth
Keys to Growth New Markets Crystalyx launched in New Zealand Export Crystalyx to France Japan and China – remote handling equipment Acquisitions Scotmin Nutrition A C Burn Forsyths of Wooler All complement existing businesses Value Added Products AVAIL AminoMax Robotic manipulato
Slide 21: Future
Future Agriculture Expansion of block markets in USA, New Zealand and Europe AminoMax in USA Bolt on acquisitions Further innovation – added value products Expand fuel distribution Food Speciality products Operating costs Engineering Stocking levels reduce at Sellafield, Carrs MSM sa
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