Carr’s suspends dividend to hedge against coronavirus fallout
Agriculture and engineering firm Carr’s has seen its half-year profit drop amid “significant” industry headwinds, it said today.
The FTSE-listed farming supplies company has also deferred its dividend “until the full effects of coronavirus become clear, though it has not seen an impact so far.
The figures
Adjusted profit before tax slumped 16 per cent year on year to £9.6m for the first half of its 2020 financial year, compared to £11.4m in the corresponding period a year ago.
Revenue also shrank three per cent to £200m while shareholders saw a 14.9 per cent drop in returns to 8p per share.
Net debt also increased by around £5m to £25.4m.
Why it’s interesting
Carr’s suspended its interim dividend in case it takes a blow from coronavirus, but has so far seen no fallout from the outbreak. However, it told investors that “significant uncertainty remains”.
It said it has taken measures and made contingency plans to minimise any impact from coronavirus. Carr’s added that it has “thoroughly stress tested” its cash flow too.
Carr’s hailed a “resilient” performance in its agriculture division, though last month it warned a challenging market there meant its full year performance would be “significantly below” expectations.
And it blamed its profit drop on the timing of engineering contracts.
What Carr’s said
CEO Tim Davies said:
In challenging market conditions, with significant headwinds experienced in both divisions, we have delivered a resilient performance in the period.
While there remains significant uncertainty over the impact of Covid-19, we are moving decisively on all fronts to address these challenges, ensuring we conserve cash and maintain a robust financial position.
We will continue to monitor developments closely and respond accordingly. At this time the health, safety and well-being of our employees, customers and the wider communities in which we operate remain our absolute first priority, and we have implemented measures to protect and support them through these unprecedented times.
We are confident that our approach and robust business model will ensure the group is well placed to endure this period of uncertainty and continue to deliver growth in the medium term.