Analyst backs ‘solid’ start to Carr’s Milling year

By Rod Addy contact

- Last updated on GMT

Carr’s Milling’s Kirkcaldy mill is now fully operational
Carr’s Milling’s Kirkcaldy mill is now fully operational

Related tags: Flour

Carr’s Milling has made a “solid” start to 2014, according to Investec analyst Nicola Mallard, confirming that its recently commissioned £17M mill in Kirkcaldy, Scotland, is performing as expected.

Mallard predicted “… the less seasonal food division is expected to have a much stronger year”.

She forecast 2014 pre-tax profit for the group would rise, from £19.1M in the past financial year to £21.1M. “The group has made a solid start to the year against some tough comparatives from 1H ​[the first half of] last year …”

Meanwhile, Carr's Milling Industries ceo Tim Davies told FoodManufacture.co.uk raw material volatility and strong comparatives could make meeting last year's revenue figures of £468.1M challenging.

In addition, he said the newly operational Kirkcaldy mill's benefits could be diluted by the good 2013 harvest, which would lower wheat prices. "Last year we had an extraordinary weather benefit. ​We have built in growth in flour. But food prices are down because wheat prices are down. This can hit revenues."

Commercial benefits

The company said its Kirkcaldy mill was beginning to deliver financial and commercial benefits now that it was fully operational, as expected.

The mill, which supplies Scottish bakers and biscuit makers, opened for business in September​ and Carr’s Milling claimed it was the first flour mill to be built in Scotland for 20 years.

In an interim trading statement covering the 19 weeks to January 11, it confirmed that its food business was already benefiting from the better quality of the 2013 UK harvest, compared to 2012.

‘Optimistic’

It also said sales volumes across its three mills at Maldon, Essex, Silloth, Cumbria, and Kirkcaldy, Fife, were ahead of last year and it was “optimistic about future opportunities”.

Its agriculture and engineering divisions were also performing well, it claimed.

“We are making good progress across each of our divisions … so that the business is well-placed to ensure a long term competitive advantage,”​ said Carr’s Milling ceo Tim Davies, commenting on the trading statement.

“We will continue to explore opportunities to grow the business both domestically and overseas.”

Related topics: Bakery, Cereals and bakery preparations

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