Origin experiences 'big bang' in profits

ORIGIN ENTERPRISES, the agri-business spun off from food group IAWS, has posted a 71 per cent increase in operating profits in its first half-year results since its initial public offering (IPO) as strong global demand for cereal crops drove growth in its feed and fertiliser business.

Its performance exceeded analysts' expectations, and spurred a 12.6 per cent increase in its share price on the Iseq's IEX market, where it closed up 57 cent at €5.07.

Origin, which is also listed on London's Alternative Investment Market (AIM), saw profits double in its agri-nutrition division, while its food businesses recorded a 43 per cent increase in profits.

Group revenue expanded by 45 per cent in the six months to the end of January 2008 compared to the same period a year earlier as Origin benefited from higher cereal prices.

"A business that struggled for growth is now booming in the changed circumstances for agriculture," said Davy Research food analyst John O'Reilly.

Revenue in the agri-nutrition division, which comprises Origin's agri-inputs and marine proteins and oils business, grew by 49 per cent to €375 million. Profits doubled to €11.7 million as a result of strong volume growth, especially in fertilisers supplied to the UK.

Food division revenue grew 6.6 per cent to €130 million, with growth of 14 per cent in the sales of its Shamrock home baking and snack food brand and the Italian food ingredients brand Roma.

Odlums milling group, which is now fully owned by Origin, contributed operating profit of €2 million.