TIDMOGN
RNS Number : 5200T
Origin Enterprises Plc
25 November 2021
Origin Enterprises plc
Q1 Trading Update
Strong start to FY22 driven by favourable autumn/winter planting
levels
Pass through of global fertiliser and feed price movements
represents approximately half of revenue growth
Dublin, London, 25 November 2021 . Origin Enterprises plc
('Origin' or 'the Group'), the international Agri-Services group,
providing specialist agronomy advice, crop inputs and digital
agricultural solutions to farmers, growers, landscapers and amenity
professionals, today issues its first quarter Trading Update for
the three months ended 31 October 2021 ('Q1 FY22').
This trading update coincides with the Group's Annual General
Meeting which will be held today at 11:00am (UK/Ireland time), in
the Merrion Hotel, Upper Merrion Street, Dublin 2, in accordance
with the latest Irish Government advice and public health
guidelines for COVID-19. Further details regarding the Annual
General Meeting are available at
https://originenterprises.com/investors/agm .
Overview
-- Strong start to trading in the seasonally quiet first quarter, compared to FY21 where carry-over of stock on-farm
reduced demand.
-- Group Revenue was EUR454.1 million for Q1 FY22, compared to EUR318.3 million in Q1 FY21, representing an increase
of 42.6%. Improved revenues were a result of increased demand, some early season forward buying by farmers and an
encouraging autumn/winter planting season, particularly in the UK. Increased global fertiliser and feed prices
represented approximately half of the revenue growth in the quarter.
-- On an underlying constant currency basis, revenue (excluding crop marketing revenue) increased by 44.0%,
reflecting an underlying volume increase of 21.0% in sales of seed, crop protection and fertiliser in the period.
-- The planted area for autumn and winter crops is expected to be broadly in line with Q1 FY21, with an increase in
cropping area expected in the UK offset by a modest reduction in Continental Europe. In Latin America, the total
cropping area dedicated to soya is expected to increase.
-- Strong crop prices globally mean that on-farm sentiment across the Group's markets is positive.
-- Appointment of Ms. Lesley Williams and Mr. Aidan Connolly to the Board of Directors.
-- Publication of Origin's inaugural Sustainability Report, ' Nurturing Growth' . The Group also signed up to the
Science Based Targets initiative (SBTi) and welcomed the launch of our UK research facility, Throws Farms, as a
LEAF* innovation centre.
Group Revenue
Constant
Currency(2)
Q1 FY22 Q1 FY21 Variance Underlying(1) %
EUR'm EUR'm % %
-------------------- ---------- --------- ---------- --------------- -------------
Ireland / UK 271.6 181.9 49.3% 37.9% 41.1%
Continental Europe 109.4 77.7 40.9% 49.1% 41.9%
Latin America 23.1 10.6 117.5% 111.9% 111.9%
Total Agronomy and
Inputs 404.1 270.2 49.6% 44.0% 44.1%
Crop Marketing 50.0 48.1 3.7% 5.7% 5.7%
Total Group 454.1 318.3 42.6% 38.2% 38.3%
(1) Excluding currency movements and the contribution of
acquisitions and disposals
(2) Excluding currency movements
------------------------------------------------------------------------
* 'Linking Environment And Farming' - LEAF - is a leading UK
organisation working to deliver more sustainable food and farming.
LEAF collaborates with farmers, the food industry, scientists and
consumers, to inspire and enable sustainable farming that is
prosperous, enriches the environment and engages local
communities.
Ireland and the UK recorded an increase in underlying agronomy
services and crop input volumes of 16.4% in Q1 FY22. Favourable
in-field conditions helped the timely completion of the harvest,
with some areas completing their harvest earlier than expected and
with higher yields recorded than the prior year. This facilitated
the early sowing of oil seed rape followed by winter wheat and
winter barley. The expected area of oil seed rape is up 19.0% to
0.4 million hectares and winter wheat up 3.7% to 1.8 million
hectares compared to FY21. The t otal autumn/winter planted area is
expected to be 5.1% higher than last year at 2.5 million hectares.
Combined autumn/winter and spring plantings for the 2022 crop
production year are expected to be 1.1% higher at approximately 4.3
million hectares.
Business-to-Business Agri-Inputs had a strong start to the
financial year, recording increased fertiliser and animal feed
ingredients volumes compared with Q1 FY21. The continuing
inflationary environment for fertiliser prices in the period,
driven by high energy costs and supply chain challenges,
contributed to increased fertiliser revenues. The production
challenges for a domestic competitor in the UK also saw UK farmers
engaged in early season procurement of fertiliser to secure
supply.
The Group's Amenity business recorded a solid start to the year,
with the integration of Green-tech, the UK's leading manufacturer
and distributor of landscaping, forestry and ground maintenance
equipment, progressing to plan and performing in line with
expectations.
Digital agricultural services continue to enhance Origin's
offering, with over 1.8 million active hectares on-boarded to the
platform during the period (Q1 FY21: 1.4 million), including growth
in Continental Europe. The key priority for RHIZA, the Group's
digital agronomy and precision farming operation, is enhancing user
functionality. RHIZA strengthens our agronomy services and through
in-house innovation, third-party collaborations and integrations,
delivers measurable value to farmers.
Continental Europe recorded an underlying volume increase in
agronomy services and crop inputs of 22.4% in the period, excluding
crop marketing volumes . There was a solid start to the year across
the segment, some of which is attributable to brought forward
demand due to concerns about supply chain challenges. Overall, t he
autumn and winter planted area is expected to reduce marginally
across our CE markets primarily driven by Ukraine, where the level
of winter plantings has reverted to a more normalised level .
In Poland , autumn and winter plantings are forecasted to be
broadly in line with FY21's final outcome at 5.1 million hectares.
The total cropping area for the 2021 growing season is expected to
be broadly equivalent to last year at 8.8 million hectares.
In Romania , autumn and winter plantings are expected to be 6.1%
ahead of the prior year at 3.1 million hectares. Despite a delay to
winter plantings because of some localised dry conditions,
favourable conditions in October allowed for catch up activity
in-field. Combined winter and spring plantings for the growing
season are currently anticipated to be 0.9% ahead of last year at
8.4 million hectares.
In Ukraine, total autumn and winter plantings are forecasted to
be 7.4% behind last year at 8.1 million hectares. This represents a
more normalised level of plantings for autumn and winter, with most
of this reduction expected to transfer to spring cropping. Combined
autumn and spring plantings are currently forecast to be marginally
behind last year at 23.5 million hectares.
Latin America delivered an improved performance in the period,
recording an underlying increase in agronomy services and crop
input volumes of 89.3%. The volume development and underlying
growth is driven by increases in our core product range and a
significant increase in controlled release fertiliser sales
following the completion of our new production facility in Minas
Gerais in the second half of FY21. The total cropping area
dedicated to soya, Brazil's principal crop, is expected to increase
by 4.4% on the prior year to 40.2 million hectares. Favourable
weather conditions have resulted in soya plantings being ahead of
the same period last year.
Outlook
Q1 FY22 delivered a strong start to the year, with increased
volumes and contributions in each segment across the Group, albeit
when compared to a weaker Q1 in FY21. Favourable autumn/winter
planting levels set a solid foundation for continued progress later
in the financial year, subject to normal weather risks which may
arise as the year progresses. As flagged at the time of our FY21
full year announcement, we are conscious of potential operating and
commercial challenges with regard to global supply chain risks and
raw material price volatility.
Through continued disciplined capital deployment, and the
strength and experience of the leadership team in place, we are
confident in the Group's ability to progress our growth ambitions
successfully in FY22 and beyond, allowing us to further increase
shareholder returns.
Origin will provide a further update on cropping status and
farming activity ahead of the Group's main trading season in the
second half, at the time of our Interim Results announcement in
March 2022.
S
Enquiries
Origin Enterprises plc
TJ Kelly
Chief Financial Officer Tel: +353 (0)1 563 4959
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)1 765 0884
About Origin Enterprises plc
Origin Enterprises plc is an international Agri-Services group,
providing specialist agronomy advice, crop inputs and digital
agricultural solutions to farmers, growers, landscapers and amenity
professionals. The Group has leading market positions in Ireland,
the United Kingdom, Brazil, Poland, Romania and Ukraine. 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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