Trading Update and Delay to Audited Results

Carr's (CARR.L), the Speciality Agriculture and Engineering Group, announces that, while trading remains in line with the Board's expectations, there will be a delay to the publication of the Group's audited results for the year ended 3 September 2022 ("FY22"). Further details are outlined below, alongside a trading update.

Trading update

Since the Group's last trading update on 5 August 2022, Carr's has continued to perform strongly, with performance for FY22 in line with the Board's expectations and ahead of the prior year. 

Post period-end, the Group disposed of its Agricultural Supplies division. The continuing Group is therefore made up of the Speciality Agriculture and Engineering divisions.  FY22 adjusted operating profit in Engineering was behind the Board's expectations, as previously indicated. However, it was significantly ahead of the prior year. In Speciality Agriculture, adjusted operating profit was ahead of the Board's expectations but down slightly versus the prior year due to margin erosion in the first half.  Net debt (excluding leases) for the continuing Group as at 3 September 2022 was £14.0m (2021: £10.0m).

Trading for continuing Group operations in the current financial year has started well, in line with the Board's expectations and ahead of FY22.

Audit status

Grant Thornton UK LLP ("GT") was appointed as the Group's auditor at the AGM held on 18 January 2022 following a competitive tender process undertaken in 2021. GT's planned audit approach, consistent with that adopted by the Group's previous auditors, KPMG LLP and PricewaterhouseCoopers LLP, included reliance upon the audit undertaken by Mitchell Charlesworth, the statutory auditors of the Group's associate company, Carrs Billington Agriculture (Operations) Limited ("CBAO").

While the audit undertaken by CBAO's statutory auditors is near completion, it has been determined that, for independence reasons, GT can no longer place reliance on that audit. As a result, a separate audit of CBAO is now required for the purposes of completing the Group's FY22 audit process.

The Board and GT have actively explored all options for completing the second audit of CBAO in the required timescales. However, no practical solution has been identified. The expected completion date for the Group's audit and publication of the Group's FY22 audited results is now mid-January 2023, later than the 3 January 2023 deadline required by the Financial Conduct Authority's ("FCA") Disclosure Guidance and Transparency Rules. As a result, the Group expects that it will request in due course for the listing of the Company's shares to be temporarily suspended with effect from 7.30 a.m. on 4 January 2023.  The Company intends to request a restoration of the listing of its shares on publication of its FY22 audited results.

The Group had a 49% shareholding in CBAO throughout FY22, with the share of profit representing approximately 8% of the Group's total adjusted profit before tax. After the financial year end, with the approval of 98.73% votes cast at a Shareholder General Meeting, the Group completed the disposal of its Agricultural Supplies division, including its 49% shareholding in CBAO, on 26 October 2022.

The Board's audit committee is scheduled to meet in early December 2022 to review all other aspects of the audit and the Board will issue an update thereafter.

Further announcements will be made as appropriate.

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