Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineHarvest the recovery at Carr’s
This looks a canny time to harvest the earnings recovery potential at agriculture products-to-engineering play Carr’s (CARR)
The $20m acquisition (7 Aug) of US engineering business NuVision brings a strong foothold in the main nuclear markets of the US and will boost Carr’s future earnings.
Pittsburgh-headquartered NuVision’s customers include the US Department of Energy, major nuclear energy suppliers, public utilities and international governments.
NuVision boasts a very healthy order book and the acquisition offers potential for revenue synergies with Carr’s other nuclear engineering businesses.
Sentiment towards Carr’s, whose agriculture division supplies farm machinery and feed blocks for cattle, is recovering following a period of weaker-than-expected demand in the US feed market and a delayed engineering contract. Encouragingly, this contract has now been signed and US cattle prices seem to be recovering.
Investec Securities’ Nicola Mallard has upgraded her price target from 170p to 195p to reflect NuVision and the profit recovery she forecasts for the year to August 2018. Results for the year to August 2017 are forecast to show lower normalised pre-tax profits of £11.3m (2016: £14.1m), although Mallard looks for a strong rebound to £15m next year ahead of £16.3m in fiscal 2019, with increased dividends of 4.3p and 4.5p shaded in for these latter years.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
