Origin Enterprises, the Dublin-headquartered international agronomy services group, has today (Tuesday, September 26) reported a 4.9% increase in group revenue to €2.5 billion.
A preliminary results statement for the financial year ended July 31, 2023 (FY23), shows that price growth of 12.5%, reflecting global commodity prices, and an increase of 1.1% from acquisitions.
This was set against reduced volumes of 8.4%, driven primarily by a combination of reduced Ukraine activity and lower fertiliser volumes.
Operating profit amounted to almost €91 million, compared to nearly €120 million in the previous year. The group said this was due to strong commodity prices and highly volatile trading conditions.
Group operating margin reduced from 5.1% to 3.7% in FY23, mainly due to an expected fall in operating margin from the Ireland and UK part of the group.
The financial results show adjusted earnings per share (EPS) of 53.16c, which was at the top end of guidance.
The group, which completed a €20 million share buyback during the year, proposed a final dividend of 13.65c/share with total FY23 dividend of 16.8c.
Origin completed four acquisitions at a total cost of€30.1 million during the period in the group’s amenity, environment and ecology businesses.
Origin Enterprises
Commenting on FY23 performance, Origin’s chief executive, Sean Coyle said: “Origin delivered a strong overall performance in declining commodity markets.
“Effective operational execution helped deliver a robust cash performance with a net cash position of €53.2 million at year end.
“This result was driven by a strong free cashflow of €104.4 million which included a working capital inflow of €43.9 million, as fertiliser raw materials and feed prices decreased globally, combined with favourable timing impacts of purchases and sales,” he added.
Coyle said Origin Enterprises returned €38 million to shareholders this year through share buybacks and dividends.
“We have, however, taken the difficult decision to close our Ukraine business at the end of September.
“This decision was taken after much deliberation, given the reduced activity levels and the market dynamics over recent years which have resulted in the business being loss-making, with little evidence that the trading environment will improve,” he said.
Coyle said the group continues to “drive sustainable growth” and is on track to deliver its “strategic ambitions” set out in its 2022 capital markets day.
“We delivered a return on capital employed in FY23 within our targeted range at 12.6% and we will continue to invest for growth across our existing operations and strengthen our earnings potential through margin accretive acquisitions,” he said.