Joint venture partnerships help drive growth at Origin

Joint venture partnerships have helped to drive first-half growth at Origin Enterprises.

The Dublin-based agri-services group beat market forecasts to deliver 12% revenue growth and a 4% profit increase.

Pre-tax profits for the business — for the six months to the end of January — rose by nearly 4.1%, on a year-on-year basis, to nearly €10.22m.

Total revenue was up by 11.9% at just under €567.7m and adjusted fully- diluted earnings per share rose by over 16% to 7.59c.

Although the period saw a larger-than-expected fall in operating profits in Origin’s agri-services division (its specialist agronomy unit) of 59.3%, to €2.4m; profits attributed to associates and joint ventures grew by 53.8% to nearly €10.9m.

This helped drive an overall 2.5% annualised increase in group operating profit, for the period, to €13.25m.

The decline in profits in the agri-services unit was blamed on the negative effect of weather on UK winter crops.

Origin’s associate businesses include food supplier, Valeo and marine protein and oils joint-venture, Welcon.

Tom O’Mahony, Origin CEO, described the group’s first-half operating and financial performance as solid; noting that the first half of the financial year is traditionally seasonally quieter than the second.

Origin’s first six months usually amount to about 15%-20% of the group’s total annual revenues.

He also said “significant progress” was made on the implementation of the group’s transformation into a fully-integrated, intelligence-led agri-services business. He said management remains “comfortable” with consensus expectations of full-year adjusted full diluted earnings per share of about 48.5c.

Yesterday’s results also showed that Origin — which is 68.8% owned by Irish-Swiss bakery group, Aryzta — reduced its net debt by nearly 8%, from just under €194m to nearly €179m.