Origin Enterprises reports reduced net profits as trading volumes shift

Agri-food group Origin Enterprises has reported net profit of €6.4m for its accounting first-half year to Jan 31, a reduced profit level on this period last year, explained by the seasonality of new acquisitions UAP and Masstock.

Origin now does around 15% of its trade in H1 versus its prior 30% balance for the period. Stockbrokers Davy, Goodbody and Bloxham are all maintaining high-earnings forecasts, which they explain by Origin’s shift in trade volumes towards its H2 reporting period, which began on Feb 1. Davy is predicting 10.4% full year earnings per share for 2012.

Origin expects to build its feed and fertiliser sales with its new acquisitions, whose primary trade is in horticulture and agronomy (farm advice services).

The company said that its on-farm agronomy services across Britain and Poland performed strongly, reflecting positive investment momentum with favourable crop planting activity during the autumn growing season, giving a solid foundation for the full year result.

Other H1 report highlights include a 0.77% like-for-like reduction in earnings per share, and sustained performance from associates and ventures.

Origin chief executive Tom O’Mahony said: “Origin has performed in line with expectations during the seasonally quiet first half of the financial year. The expansion of the Group’s Agri-Services division in 2011 and the formation of Valeo Foods in Nov 2010 have resulted in the second half of the financial year becoming much more seasonally important with 15% of operating profits now typically earned in the first half of the year.”

In January, the Group combined Masstock and UAP under a new identity called Agrii.

Tom O’Mahony said: “The repositioning of the group’s business profile over the last three years has established Origin’s leadership position in on-farm service support. We are now firmly focused on placing agri-intelligence at the heart of the enlarged business.

“Connecting crop science and research application with agronomy practice, inputs, farming decision support and economics supports the creation of customised and fully integrated solutions that deliver sustained improvement in crop yields and profitability for the benefit of primary food producers.”