Carr’s Milling surprises analysts in first quarter

By Oliver Nieburg

- Last updated on GMT

Carr’s Milling Industries has reported solid Q1 results in a trading update as improved flour sales driven by new customers led to results that have surprised market analysts.

Analysts from Shore Capital described the trading update for the 18-week period leading up to 7 January as “positive”.

Carr’s, which works in flour milling, engineering and agriculture industries, gave the update in the wake of its AGM, which was held on Tuesday.

Customer gains

The company said that for the food arm of its business: “Flour sales volumes were slightly ahead, reflecting the gains of new customers.”

“However, overall margins continue to be low as the result of competition in an industry with significant surplus capacity. The benefits of our investment in the port at Kirkcaldy, including the improved supply of quality wheat, have been as expected.”

The company made a £0.8m (€0.96m) investment in a re-opened port at Kirkcaldy in 2011 which is said to have boosted its wheat supply.

Analyst’s take

Shore Capital analysts said: “Flour sales volumes are reportedly up year-on-year, albeit only slightly, but this was still a positive surprise for us.

“However, management still warns of on-going competition in the industry as a result of overcapacity, which is likely to constrain margins. The division does, however, continue to benefit from its investment in the port of Kirkcaldy which, in particular, is delivering an improved supply of quality wheat.”


Following the trading update, Shore Capital has upgraded its current year EPS forecast by 3%.

“This provides year-on-year growth of 10%, which, given the current valuation, we deem to be an attractive investment opportunity,” ​it said.

Carr’s turnover for 2011 stood at £373.3m (€446.8m). Shore Capital forecasts that this figure will rise 11% in 2012, with further increases in 2013.

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