Monday 23 April 2018

Origin shares boosted by positive results and strong forecast

AGRI business

Peter Flanagan

SHARES in Origin Enterprises jumped yesterday after the agri-services company announced positive first-quarter results.

In an interim management statement for the three months to October 29 that coincided with the firm's annual general meeting, Origin said turnover, excluding the consumer food business it since spun off into Valeo Foods last year, stood at €315.8m, up 3.2pc on the same period a year ago. Origin's fiscal year runs from July 1.

On the back of a number of acquisitions over the summer, including Carrs Fertilisers, Origin said its earnings would become even more seasonal.

Up to 85pc of the group's profits would be generated in the second half of the year, the company claimed.

Company chief executive Tom O'Mahony was on the whole satisfied with his firm's performance.

"Integrated agronomy services performed very satisfactorily in the period benefiting from robust activity at farm level, while current autumn planting estimates provide an excellent platform for the full year result.

"Business-to-business agri-inputs has had a good start to the year, albeit on lower volumes reflecting customer buying commitments being delayed until closer to the main usage period in the second half of the financial year."

The group's strategic interests in consumer foods and marine proteins and oils performed in line with expectations, he added.

Full-year expectations remain unchanged, with most analysts predicting earnings per share of around 44c.

John O'Reilly, Davy Stockbrokers, described the company as "outstanding value". Management has done "a great job in re-strategising the business over recent years".

"It has the financial clout to invest to maintain growth around core activities," he said.

Meanwhile, specialised bakers Aryzta, which controls more than 70pc of Origin, has applied to the Swiss stock exchange to increase its issued shares by 3pc as part of a management incentive scheme.

The shares are likely to be held in Treasury for some time, said NCB's Darren Greenfield, but warned diluting existing shareholders may hit future earnings per share.

Origin closed up 3.73pc at €3.20, while Aryzta fell 0.86pc to €33.51.

Irish Independent

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