Origin upbeat despite 18pc fall in earnings for first-half
Published 12/03/2010 | 05:00
ARYZTA spin-off Origin Enterprises suffered an 18pc fall in first-half earnings but yesterday insisted it remained on course to contain its full-year earnings drop to between 5 and 10pc.
The discrepancy between the drop over the six months to January 31 and the full year arises because Origin's business is heavily skewed to the second half, which is expected to account for 80pc of this year's earnings.
Commenting on the outlook yesterday, Origin boss Tom O'Mahony also hinted at the potential of more favourable trading conditions following an "uplift in primary output markets", though he stressed that the improved climate had "yet to noticeably impact farm incomes", which weigh heavily on Origin's agri-nutrition business.
That agri-nutrition business was the worst performer in the first half, with total revenue dipping 17pc to €461m and like-for-like sales down 11pc "principally reflecting lower global fertiliser and feed ingredient pricing".
Pre-tax earnings at agri-nutrition, meanwhile, were down 21pc at €14.9m.
In the food side of Origin's stable, which includes household brands like Shamrock, Roma and Odlums, reported revenue fell by 14pc to €135m and earnings were down 12pc to €8.2m.
Both sets of results were largely in line with consensus, and Origin stressed that it remained "confident" of hitting full-year earnings guidance of 33c a share, implying a 5 to 10pc fall on 2010's performance.
Mr O'Mahony also hinted at acquisitions ambitions for the second half of the year, stressing that "operational efficiencies" would continue to be taken to "ensure the business is well-positioned to respond to new opportunities as they arise".
The Origin boss declined to be drawn on the scale of acquisitions he had in mind, but he confirmed that after stripping €6m from costs by closing facilities and "driving supply chain efficiencies" in the food division, "material changes in employment" over the rest of the year were not "likely".