Agri-services group Origin hit by weak sterling

Shares in Dublin-based agri-services group Origin Enterprises dipped yesterday after it said sterling’s weakness versus the euro impacted on its seasonally important third quarter revenues.

In a trading update, Origin said revenues fell 1.2%, to €548.7m in the three months to the end of April, with the bulk of that attributable to currency fluctuations. However, on an underlying basis, revenue for the period was 4.1% ahead of the same period last year, which had been impacted by poorer weather conditions.

For the first nine months of Origin’s financial year, revenues were up by 4.7% — and 7.1% on an underlying basis — at just over €1.11bn.

The Dublin company’s shares have shown strong double-digit returns to date this year but fell nearly 3% in Dublin yesterday before paring those losses to close 1.45% down on Wednesday’s finish. Despite the currency effect, Origin — which is active in Ireland, the UK and parts of central and eastern Europe — said it had seen a good third-quarter performance. On the back of the three-month showing, management said it now expects adjusted diluted earnings per share, for the 12 months to the end of July, to amount to around 44c-to-46c.

“This range reflects an underlying growth in group operating profit of between 8%-11% on a constant currency basis,” the company said. Origin said sterling’s weakness had a positive impact on crop output values, which, combined with favourable year-on-year movements in global dairy markets, drove “an improved short-term outlook for the incomes of crop and grassland farm enterprises”.

“The generally settled weather for the majority of the period has supported excellent crop planting conditions, resulting in favourable demand for agronomy services and crop inputs,” the company said.

Outside Ireland and the UK, Origin said it was pleased with performances from Romania, Poland, and Ukraine. Origin’s central and eastern European operations had underlying volume growth in agronomy services and crop inputs of 11.3% and 12.3% for the quarter and year-to-date.