Carr's Group - An enhanced value creation strategy

Carr’s Group has announced an updated strategy that offers the potential for value realisation and creation from a number of avenues. These include: value realisation of the Engineering Division; the ability to significantly reduce central costs; and longer-term value creation in the Agriculture Division as a focused business with recovery potential and a strategy to leverage its strong market positions for growth.

Carr's Group - Cautious optimism

Cyclical weakness in Carr’s Group’s Speciality Agriculture business has affected the company’s fortunes of late. However, the new management team, a strong net cash balance sheet and a record order book in the Engineering division offer optimism. Operational progress, particularly a reversal of fortunes in Speciality Agriculture, should rebuild confidence and a reduction in the current discount to our view of the underlying value.

Carr's Group - A new team to take the group forward

Carr’s Group has announced a fully refreshed executive team, none having been in-situ at the start of 2023. This will enable the executives to have an uninhibited view of the operations, enabling the development and implementation of a strategy reflecting the different opportunities and challenges facing the Engineering and Speciality Agriculture divisions.

Carr's Group - Progressing to plan

FY23 trading has continued according to the early August update, demonstrating the benefit of two unrelated activities at Carr’s Group: the Engineering division’s strength countering the weakness seen in the Speciality Agriculture business. Both have underlying longer-term growth attractions to drive earnings, along with the recovery potential in the agriculture end-markets.

Carr's Group - Weaker agriculture markets affect expectations

External factors, US drought and excessive input prices, in the Speciality Agriculture business continue to weigh on volumes. As these reverse, strong market positions should help to drive activity back towards historical levels. With the Engineering division performing well the medium-term outlook is far more encouraging than the short-term market issues may suggest.

Carr's Group - Weather affects H123 performance

As flagged in its February update, the Speciality Agriculture division of Carr’s Group experienced a weaker trading environment from November onwards, while trading in the Engineering division was initially slower than anticipated. This resulted in a 23% drop in adjusted operating profit year-on-year in H123 to £5.8m. Management expects trading conditions for the Speciality Agriculture division to improve later this calendar year, while a strong Engineering order book supports good divisional pe

Carr's Group - Details of FY22 performance

Carr’s Group has released its audited results for FY22, having previously issued a detailed trading update in February giving preliminary financial metrics on FY22 performance. The shares were suspended from trading in January because of delays in publishing these results. The company has applied for them to be restored to trading.

Carr's Group - Initial look at FY22 performance

Carr’s Group has issued a detailed trading update giving some preliminary financial metrics on FY22 performance. These show both continuing divisions (Speciality Agriculture and Engineering) beating our EBIT estimates, following a strong finish to the year. The shares remain suspended until management finishes the final stages of the audit process, which it believes are ‘essentially complete’. Our note is based on the initial information in the trading update. We will publish a follow-on update

Carr's Group - Publication of FY22 results delayed

The recent trading update from Carr’s Group notes that FY22 performance (year ended 3 September 2022) was in line with management expectations and ahead of FY21, while trading so far in FY23 has been in line with management expectations and ahead of FY22. There will be a delay to the publication of the group’s audited FY22 results because a separate audit of the associate that was sold as part of the disposal of the group’s Agricultural Supplies division is now required for independence reasons.

Carr's Group - Sale puts focus on higher-margin activities

Carr’s Group has announced the disposal of its Agricultural Supplies division for up to £44.5m cash following the strategic review announced in January 2022. While we expect the disposal to lead to an earnings reduction in the short term, the proceeds will be reinvested in the Speciality Agriculture and Engineering divisions. Management believes this strategy will generate faster growth in the longer term than retaining the Agricultural Supplies activity.

Carr's Group - Coping well with commodity price rises

Carr’s Group’s trading update for the 22 weeks ending 30 July 2022 notes that the overall trading performance for FY22 is in line with board expectations so we leave our estimates unchanged. The board states that the strategic review announced in December 2021 is nearing completion and it expects to make a separate announcement soon.

Carr's Group - Engineering recovery sustained

Carr’s Group’s H122 results show it is coping well with commodity price volatility. The high oil prices are boosting demand for precision engineering services, supporting a recovery in the Engineering division. Management is confident that the FY22 performance will be in line with market expectations, so we leave our estimates broadly unchanged.

Carr's Group - Optimising value for shareholders

Over several decades Carr’s Group has diversified both within and outside the UK agricultural market. This has reduced the group’s exposure to the vagaries of the British climate, farming policy and volatile commodity prices and taken it into activities that generate substantially higher margins and present opportunities for stronger growth than the traditional agriculture sector in individual countries. However, while the board sees potential for growth in each of the three divisions, there are

Carr's Group - Engineering recovery sustained

Carr’s trading update for the first 20 weeks of FY22 notes that the group has made a positive start to the year with overall performance during the period broadly in line with Board expectations. Importantly, the announcement notes that while the Board sees potential for growth in each of the three divisions, there are limited opportunities to exploit inter-divisional synergies, so it has decided to conduct a strategic review. We leave our estimates unchanged and reiterate our indicative valuati

Carr's Group - FY21 results ahead of improved expectations

Carr’s Group’s FY21 results were ahead of management’s improved expectations, with increased profits across both the Speciality Agriculture and Agricultural Supplies divisions offsetting weaker performance from the Engineering division caused by low oil prices during Q121. Noting continued strength in livestock prices in the United States and the UK, stable farmgate milk prices in the UK and a strong Engineering order book, we raise our FY22 and FY23 PBT estimates by 4.7% and 2.2% respectively.

M.P. Evans - Tougher year but growing cashflow outlook drives optionality

FY23 results are much in line with overall expectations, helped by a much stronger H2 production and higher purchases of independent crops helping to fill the group’s rising mill capacity. A marginally higher than expected average CPO price mill-gate price of $729/tonne drove the revenue outperformance, but the change in production mix impacted gross margins while slightly higher than anticipated interest, tax and minority charges resulted in EBIT, PBT (Adj.) and EPS (Adj.) just below our foreca

Anpario+ (ANP, House Stock at 230p) - FY24F upgrades - recovery play

Greggs - Showing us how it's done

The second full year of Greggs’ five-year growth plan to double revenue by FY26 should be marked down as very successful, especially so given the challenging external environment. Unlike many consumer-facing companies, high selling price inflation was accompanied by volume growth, leading to good market share gains. The consumer is responding well to new initiatives to grow revenue in new dayparts and digital channels. Profitability was well-managed with better recovery of input cost inflation t

Hardman & Co Healthcare Index: 2023 – Capital demands dent performance

The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (

Initial Equity Trading Comments - 16 May 2023

Ocean Harvest Technology - Harvesting the power of seaweed

Ocean Harvest Technology (OHT), based in the UK, produces animal feed additives products using a composite of blended seaweed. Its patented products have been shown to enhance growth rates in livestock, increase feed efficiency and improve egg quality and quantity for laying poultry. As OHT operates in an attractive market, there is significant potential for its proprietary technology to drive volume growth as awareness of its product benefits increases, along with improving financials.

SP Angel Morning View: Risk sentiment pulls back on geopolitical tensions and concerns over Chinese property market

Hybridan Small Cap Feast - 20 Mar 24

20th March 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Initial Equity Trading Comments - 20 March 2024

Morning Note – 11 September 2023

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Morning Note – 19 January 2024

Morning Note – 23 January 2024