Carr's, the agriculture and engineering group, says it continues to trade in line with the board's expectations for the current financial year.
An update says: "UK Agriculture has begun the year strongly, with compound feed volumes ahead of the prior year. Market pressures continue to have an impact; however, the signs of stability that were highlighted in the Group's results announcement in November 2016 still remain. Fuel volumes were ahead of the prior year, and machinery sales have also shown signs of recovery in the first quarter. Our Retail business has continued to grow with performance ahead of expectations.
"Feedblock sales in the UK have started strongly, with volumes ahead of last year. US feedblock sales volumes are in line with the prior year as the impact of falling cattle prices for producers begins to take hold. Both volumes and margins are expected to remain under pressure during the rest of this financial year. Detailed planning for the construction of the new low moisture feedblock production facility at Shelbyville, Tennessee, is progressing well, with completion of the facility expected by autumn 2017 and this should provide a platform for growth in the medium term.
"Overall, the Agriculture division is performing ahead of the Board's expectations."
It continues: "The Engineering division has had a slower than expected start to the year, due to a significant contract delay in the UK Manufacturing business, which will impact production activity throughout this financial year. Work on this contract is now expected to commence towards the end of the year, and action is underway to limit the resulting financial impact on the Engineering division's performance. In the medium term, however, there is a substantial order book and pipeline in place so prospects remain encouraging."
Chief executive Tim Davies said: "We have delivered a strong performance in our UK agricultural operations during the period, supported by improved confidence in the outlook for our core farming customers. However, this has been partially offset by market pressures in the US, relating to falling cattle prices, and the delay of a significant contract in our engineering business, which is now expected to commence towards the end of this financial year.
"The performance during the period once again demonstrates the value of the diversity of our business when operating in challenging market conditions. We are pleased to report that overall we are trading in line with the Board's expectations."