Origin’s revenues grow 3.5% in Q1

Contributions from acquisitions and favourable currency movements led to Origin Enterprises posting a 3.5% year-on-year increase in first-quarter revenues, to €318m.

However, the Dublin-based agri-services group said underlying revenues, for the three months to the start of November, were down by 5.6% on an annualised basis, due to lower global fertiliser and feed prices.

In a trading update, published yesterday to coincide with its AGM in Dublin, Origin said it had achieved a “satisfactory” performance in the seasonally-quiet first quarter of its financial year. However, it added while activity levels on farms were robust during the period, “output price volatility is making for a demanding and challenging planning environment for primary producers, currently.”

That said, however, Origin has given a positive enough outlook for its current year, even at this early stage (just a couple of months ago, the company reported a 3.3% increase in full-year pre-tax profits to €87.4m, but a 0.2% dip in revenues to €1.41bn).

“Notwithstanding a more challenging planning backdrop for primary producers in the current financial year, the autumn cropping profile established to date provides a good foundation for the seasonally more important second half of the financial year when some 90% of earnings typically arise. The group currently expects to deliver full-year adjusted diluted earnings per share of around 60 cent, which is in line with consensus.”

On a divisional basis, Origin said its UK-based on-farm agronomy services business, Agrii, performed satisfactorily in the period.

Its Polish business delivered a good performance and benefited from an excellent harvest outcome delivering generally above average yields; but market conditions remained difficult in the Ukraine although the Agroscope business, still managed to perform “satisfactorily”.

Its business-to-business Agri Inputs business, in Ireland and the UK, had a positive start to the year, according to management, and Valeo Foods, the consumer foods group and owner of the likes of Odlums, Jacobs, Roma and Batchelors, in which Origin holds a 32% stake, delivered what management called “a solid performance” in the quarter.

Davy Stockbrokers yesterday suggested Origin’s statement marked a “reasonable update” and a good outcome, considering market conditions. “In terms of operating profit contribution, the first quarter is not significant. In full-year 2014 and full-year 2013, Origin reported first quarter operating profits of €8.1m and €6.3m, respectively,” said Davy’s Cathal Kenny.