Carr’s Group (LON:CARR), a leading name in the food and engineering sectors, has taken a significant step in its strategic evolution with the sale of its Engineering Division, excluding Chirton, for £75 million. This pivotal move underlines Carr’s commitment to sharpening its focus on core business areas, particularly within its agriculture strategy.
The deal, announced on 16 January 2025, positions Cadre as the new owner of the Engineering Division. Analysts at Shore Capital praised the decision, highlighting its strategic alignment. Akhil Patel, CFA, commented: “The sale to Cadre, a company with existing nuclear exposure, demonstrates strong strategic rationale. The valuation metrics, including a 7.1x EV/EBITDA multiple and a 10.4x EV/EBIT, fall within our previously suggested range of 10-12x, showcasing the Board’s adept negotiation.”
Shareholder Gains and Future Prospects
Of the £75 million raised, £70 million is expected to be returned to shareholders via a tender offer, a structure offering tax advantages for retail investors compared to a special dividend. Only £2 million of the transaction value is deferred, and the process is expected to complete within the next two months, subject to regulatory clearance.
Chirton, the only part of the Engineering Division not included in the deal, is undergoing a separate sale process. Meanwhile, Carr’s Group is actively reshaping its operational footprint, with over £1 million in annual savings anticipated from streamlining central resources.
Dr Clive Black of Shore Capital observed: “This disposal reflects Carr’s proactive approach to optimising its portfolio and supporting the company’s evolving agricultural focus. Coupled with the recent £4 million from non-core property sales and the de-risking of its defined benefit scheme, the Group is building a strong platform for growth in its chosen sectors.”
Financial Performance and Forward Momentum
Carr’s Group reported robust financials for 2023, with revenue of £81.8 million and adjusted PBT of £2.9 million. For 2025, Shore Capital forecasts revenue growth to £85.0 million and a substantial adjusted PBT improvement to £4.0 million, reflecting confidence in the Group’s strategic direction.
The engineering disposal and the company’s financial resilience set a promising tone for Carr’s Group as it aligns more closely with its agricultural ambitions.
In Summary
The strategic sale of Carr’s Engineering Division underscores a turning point for the company, enabling it to refine its focus and deliver value to shareholders. As Akhil Patel, CFA, aptly stated, “The disposal supports Carr’s shift in strategic direction, unlocking shareholder value while strengthening the Group’s core agricultural operations.”
With its sights firmly set on future growth, Carr’s Group is poised to reap the benefits of its strategic realignment.
