By Geoff Percival
Shares in Irish agri-services group Origin Enterprises rose by almost 4% on the back of a strong third quarter trading update and news of the company expanding into South America.
The company has added to its Irish, British and Eastern European interests with the purchase of stakes in two Brazilian companies for undisclosed sums.
Origin has acquired 65% of value-added crop nutrition and speciality inputs business Fortgreen Commercial Agricola; and a 20% stake in Ferrari Zagatto E Cia, one of the country’s leading agronomy services providers.
Both companies are based in Paraná State, in southern Brazil, and are seen as being “highly complementary” to Origin’s existing business.
“The acquisitions will enhance the group’s crop technology portfolios and brand reputation on-farm,” said Origin chief executive Tom O’Mahony.
In its latest trading update, Origin said group revenue for the three months to the end of April fell by 4%, mainly down to the severe winter weather conditions during the period.
In the first nine months of its financial year, revenues were flat.
However, the company said it has seen “a positive start” to its fourth quarter, which it said reflects “robust activity levels on farm due mainly to the later timing of seasonal demand”.
Origin expects to achieve full-year adjusted diluted earnings per share of between 47.5c and 48.5c for the 12 months to the end of July.
Merrion Stockbrokers said it viewed Origin’s Brazilian expansion as “a compelling transaction” given that it diversifies the group into a less seasonal geography.