Solid performance puts Origin Enterprises on positive footing

Irish-listed agri-services group Origin Enterprises has upgraded its full-year guidance as it reported a "solid" operating and financial performance in the first half of the year.

The firm said operating profit in its key agri-services division rose by 68.1 per cent in the six months to the end of January 2014, rising to €4 million from €2.4 million a year earlier.

Analysts noted more favourable weather conditions in this period compared with the previous year.

Although the first half of the financial year typically represents less than 10 per cent of the company’s earnings, analysts saw the interim results as a good start.

“While it is seasonally an insignificant period, the bounce in agri-services operating profit in H1 gets the year off to a good start,” Davy Stockbrokers’ John O’Reilly said, adding that extended acreage and good crop conditions provided good visibility for the more critical second half of the year.

Earnings per share were down almost 22 per cent, but that was impacted by the disposal of Welcon. Excluding that and the effect of currency, EPS was 12.1 per cent higher year on year.

Chief executive Tom O’Mahony said the firm would raise its full year guidance in adjusted diluted earnings per share by 3 per cent to 53.5 cent.

“The requirement of primary food producers for greater crop productivity whilst managing the environmental sustainability of their production systems underscores the urgent priority to reliably close the gap between optimum crop potential and what is credibly achievable,” he said in a statement. “The Group, through its comprehensive co-ordinated growing systems and knowledge translation capability, is committed to delivering practical and relevant information on-farm that can positively influence the competitiveness, profitability and sustainability of primary arable, vegetable and fruit enterprises.”