Origin Enterprises plc, the international agri-services group which provides specialist agronomy advice, crop inputs and digital agricultural solutions to farmers, growers, landscapers and amenity professionals, today (Wednesday, September 29) announced its full year results for the year ended July 31, 2021.
The results show that group revenue increased by 4.4% to €1.66 million, a 6.6% increase on an underlying basis.
Operating profit at the group was €61 million, an increase of 38.3% and 42.1% on an underlying basis.
Among the other major highlights of the financial period was the acquisition of Green-tech, the UK-based landscape, forestry and grounds maintenance equipment provider.
Origin’s chief executive officer, Sean Coyle said: “FY21 saw a much-improved performance for the group, compared to a challenging FY20 impacted by extreme weather and the onset of the Covid-19 pandemic.
“Although we experienced a delayed season in FY21, following prolonged cold weather in spring, more favourable conditions in the fourth quarter resulted in increased demand for agronomy services, crop inputs and amenity products.
“The group delivered a solid earnings recovery with adjusted diluted EPS growth of 44.6% over the prior year on a constant currency basis,” he added.
The CEO added that the recovery in earnings was primarily driven by increased volumes and improved margins in Ireland and the UK.
Origin Enterprises financials
Group operating profit increased by 38.3% to €61 million. Group revenue, including crop marketing revenue, increased by 4.4% to €1.66 million on a reported basis, and was ahead on a constant currency basis by 7.2%, according to the finanical results.
The group said that it continues to focus on improving cash performance and delivered strong free cash flow of €49.2 million, despite a working capital outflow of €4 million.
Net bank debt at year end fell to €14.4 million. The recovery in performance
during the financial period to end of July 2021 allowed the company to resume dividend payments.
Shareholder dividends
Following an interim dividend of 3.15c paid to shareholders in April 2021, the directors are proposing a final dividend of 7.85c for approval at the Annual General Meeting (AGM) in November 2021, bringing the total dividend payment per share to 11C.
The group said that it is continuing to focus on strategic opportunities that complement its existing market positions and enhances its product capabilities through a combination of organic and acquisition growth.
During the year, the group acquired UK-based Green-tech Ltd.
Coyle continued: “We are delighted to welcome the Green-tech team to the Origin Group. The business is integrating well and performing in line with expectations.
“Green-tech is an excellent strategic fit for Origin and enhances the offering of our amenity businesses, while offering potential in the area of environmental land management and biodiversity enhancement for the group’s agri-focused businesses.”
The Origin group also disposed of its Belgian fertiliser business during the year, stating that opportunities for consolidation “did not exist” in that market.
Sustainability at Origin Enterprises
Origin added that sustainability and responsible practices are core to its strategy and it will publish its inaugural stand-alone sustainability report – ‘Nurturing Growth’ shortly.
The report is expected to detail Origin’s environmental social and governance (ESG) performance.
In addition, Origin’s banking facilities, which had recently been extended to 2025, now have pricing linked to its ESG performance.
Challenges
While the business said it has recovered from a very challenging trading environment up to summer last year, Covid-19 continued to present operational challenges for the business in the most recent finanical year.
Despite this, the company added that as a result of the collective efforts of its people and the “resilience of our business model”, it continued to serve customers, delivering revenue and operating profit growth together with strong operating cash flow.
The Feed Ingredients result in Origin’s financial results, reflects a challenging trading and operating environment impacted by a fire at its animal feed business facility at R&H Hall, at the Port of Cork, Ireland and logistical challenges arising from commodity supply constraints.
The group’s animal feed manufacturing associate, John Thompson & Sons Ltd, in which the group has a 50% shareholding, delivered what it termed “a satisfactory performance” in the period.
Coyle added: “Although we have encountered minimal supply chain challenges to date, we continue to monitor the Covid-led global supply challenges being experienced.
“Through continued disciplined capital deployment and the strength and experience of the leadership team in place, combined with our scalable and diversified market positions, I am confident we will progress our growth ambitions successfully in FY22 and beyond,” he concluded.