TIDMOGN
RNS Number : 6184T
Origin Enterprises Plc
16 November 2023
Origin Enterprises plc
Q1 Trading Update
Solid first quarter performance; EUR20 million share buyback
programme announced
Dublin, London, 16 November 2023: Origin Enterprises plc
('Origin' or 'the Group'), the international Agronomy-Services
group, providing specialist advice, inputs and digital solutions to
promote sustainable land use, today issues its first quarter
Trading Update for the three months ended 31 October 2023 ('Q1
FY24').
The Group is also hosting its Annual General Meeting ('AGM')
later today. Further details regarding the Annual General Meeting
are available at https://originenterprises.com/investors/agm.
Highlights
-- Q1 saw solid growth in underlying Group volumes of 1.3% compared to prior year.
-- Continued correction in global feed and fertiliser raw
material pricing led to a decrease in Group Revenue of 25.7% to
EUR532.5 million in Q1 FY24, compared to EUR716.2 million in Q1
FY23.
-- While planting in parts of the UK has been delayed following
a later harvest and adverse weather in recent weeks, it is
reasonably well advanced with 1.4 million hectares of winter wheat
drilled. Our current expectation is that approximately 1.5 million
will be drilled compared to last year's 1.8 million hectares.
-- Autumn and winter cropping is expected to decrease marginally
in Continental Europe with drought conditions delaying planting in
Romania.
-- Despite downward movement in global fertiliser prices, Latin
America delivered year-on-year underlying revenue growth of
22.1%.
-- On-farm sentiment is reasonable, influenced by a recent
firming of commodity output prices despite the challenging in-field
conditions. Generally, inventory levels on-farm remain low and are
likely to require replenishment for the spring application
period.
-- Good start to the year in the Group's Amenity, Environmental
and Ecology division where a marginal decline in amenity volumes,
as a result of the adverse weather in the UK, was offset by the
integration of acquisitions.
-- Announcement of new share buyback programme of up to EUR20.0 million.
Commenting on Origin's Q1 Trading Update, Sean Coyle, CEO
said:
"Overall, the first quarter delivered a solid start, with growth
in underlying volumes despite delayed plantings and a later harvest
in the Northern Hemisphere. The continued strong performance of our
Latin American business combined with the growing contribution from
our Amenity, Environmental and Ecology division, is helping to
offset the impact of more challenging planting conditions in
Europe.
Given the continued strong cash performance of the business,
today we are announcing a new share buyback programme of up to
EUR20 million. We are confident that the Group is well positioned
to deliver on our 2022 Capital Markets Day financial and strategic
ambitions".
Group Revenue
Constant
Currency(2)
Q1 FY24 Q1 FY23 Variance Underlying(1) %
EUR'm EUR'm % %
--------------------- ----------- --------- ---------- --------------- -------------
Ireland / UK 321.9 460.0 (30.0%) (31.7%) (30.0%)
Continental Europe 99.6 154.4 (35.5%) (36.2%) (36.2%)
Latin America 55.1 46.4 18.8% 22.1% 22.1%
Total Agronomy and
Inputs 476.6 660.8 (27.9%) (28.9%) (27.8%)
Crop Marketing 55.9 55.4 0.7% (4.0%) (4.0%)
Total Group 532.5 716.2 (25.7%) (27.0%) (26.0%)
(1) Excluding currency movements and the
contribution of acquisitions
(2) Excluding currency movements
-------------------------------------------------------- --------------- -------------
Ireland and the UK recorded a decrease in underlying agronomy
services and crop input volumes of 4.0% in Q1 FY24. Overall, a
later 2023 harvest and challenging weather related in-field
conditions have led to a delayed autumn/winter planting season in
parts of the UK. Currently, 1.4 million hectares of winter wheat
has been drilled and we are optimistic that approximately 1.5
million can be drilled compared to the 1.8 million hectares planted
last year. Combined autumn/winter and spring plantings for the 2024
crop production year are expected to be in line with last year at
4.4 million hectares.
Business-to-Business Agri-Inputs had a solid start to FY24, with
reduced revenues compared with Q1 FY23 driven by t he continued
correction in global feed and fertiliser raw material pricing.
Volumes have been somewhat impacted by the adverse weather
experienced in Q1.
Amenity, Environmental and Ecology had a good start to the year
with a marginal decline in volumes as a result of adverse weather
more than offset by increased revenues from the Group's recent
acquisitions in this sector, with integration on track.
Continental Europe recorded an underlying volume increase in
agronomy services and crop inputs of 1.1% in the period, excluding
crop marketing volumes . Overall, across Poland and Romania, t he
autumn and winter planted area is expected to be back marginally,
however it is forecasted to be offset by a corresponding increase
in spring plantings. Overall, there was a satisfactory start to the
year, with good crop establishment noted in Poland, however drier
conditions in Romania have led to delays in planting.
Latin America delivered another strong performance in the
period, recording an underlying increase in business volumes of
54.7% supported by continued investment in the sales organisation
and operations infrastructure. The total cropping area dedicated to
soya, Brazil's principal crop, is expected to increase by 4.1% on
the prior year to 45.4 million hectares. While regional weather
conditions have resulted in some delayed soya planting compared to
the same period last year, overall planting levels are tracking in
line with the five-year average.
Sustainability
During the quarter, the Science Based Targets initiative
validated Origin's Green House Gas ('GHG') reduction targets. Scope
1 and 2 goals were classified as consistent with a 1.5degC
trajectory, thereby meeting the Paris Agreement goals on global
warming. Targets include a 54.9% reduction in Scope 1 and 2
emissions by FY2032 (from FY2019) and a 32.5% cut in Scope 3
emissions from purchased goods, services, transportation, and
product use.
Share Buyback Programme
The Group intends to launch another share buyback programme of
up to EUR20.0 million. The programme is subject to shareholder
approval of the resolution to be proposed at today's Annual General
Meeting to buy back up to 10% of the Company's ordinary shares.
Subject to shareholder approval, an announcement will be made
immediately prior to formal launch of the programme.
Outlook
Origin will provide a further update on cropping status and
farming activity ahead of the Group's main trading season, at the
time of our Interim Results announcement in March 2024.
AGM
Origin is holding its Annual General Meeting ('AGM') today at
11:00am (UK/Ireland time), in the Merrion Hotel, Upper Merrion
Street, Dublin 2. Further details regarding the Annual General
Meeting are available at
https://originenterprises.com/investors/agm .
ENDS
Enquiries
Origin Enterprises plc
TJ Kelly
Chief Financial Officer Tel: +353 (0)1 563 4900
Brendan Corcoran
Head of Investor Relations Tel: +353 (0)1 563 4900
Goodbody (Euronext Growth (Dublin)
Adviser)
Joe Gill Tel: +353 (0)1 641 9449
Davy (Nominated Adviser)
Anthony Farrell Tel: +353 (0)1 614 9993
Numis Securities (Stockbroker)
Stuart Skinner Tel: +44 (0)20 7260 1314
FTI Consulting (Financial Communications
Advisers)
Jonathan Neilan / Patrick Berkery Tel: +353 (0)86 602 5988
About Origin Enterprises plc
Origin Enterprises plc is an international Agronomy-Services
group, providing specialist advice, inputs, services and digital
solutions to promote sustainable land use. The Group has leading
market positions in Ireland, the United Kingdom, Brazil, Poland and
Romania. Origin is listed on the Euronext Growth (Dublin) and AIM
markets of the Irish and London Stock Exchanges.
Euronext Growth (Dublin) ticker symbol: OIZ
AIM ticker symbol OGN
Website: www.originenterprises.com
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END
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