Growth in Origin earnings higher than expected

Agri-nutrition and food company Origin Enterprises has reported a higher than expected growth in earnings for the year in which it was spun off from consumer foods group IAWS and sought a public listing.

Turnover at the group, which owns Odlums and Shamrock Foods, as well as being the biggest importer of animal feed, cereal and blended fertiliser into the Republic, increased 8.9 per cent to €889.4 million.

In its maiden set of full-year results, earnings before tax, interest and write-offs increased by 8.6 per cent to €45.7 million, while pre-tax profit rose 2.6 per cent to €38.4 million.

The company said it had put in a strong operational and financial performance across all group operations. With earnings ahead of some forecasts by more than 5 percentage points, food sector analysts broadly agreed with this sentiment.

Since its year-end, the company has acquired the 50 per cent of the Odlums milling group that it did not already own.

This business has been affected by lags in the ability to pass on the soaring cost of wheat on global commodity prices to its bakery customers.

However, these costs have now been fully passed on, Origin chief executive Tom O'Mahony said.

It will review its milling strategy for Odlums, which has three mills at Dublin, Portarlington and Cork. These plants are at full capacity and no closures are imminent.

Mr O'Mahony said Origin was in a strong position to capitalise on a commercial, post-subsidies era of farming.

"The whole context for primary food production has changed," he said.

Origin is sitting on a valuable 32-acre site in Cork's South Docks, which is to be developed under the Cork South Docks Local Area Plan.

The company, which owns development properties worth a total of €165.5 million, has not yet decided if it wants to sell this part of the site, which includes the storage facility of its feed distributor, R&H Hall, or enter into a joint venture with a developer.

It intends to relocate the R&H Hall facility to Ringaskiddy.

Origin will also submit a plan to Kildare County Council for the rezoning of its 55-acre greenfield site, which is zoned for industrial use.

The figures are for the 12 months ending July 31st, a period in which it raised €100 million in an initial public offering on the Irish Stock Exchange's IEX market for smaller companies and the AIM market in London.

The bank has also taken on a €350 million debt facility, which it will use to fund investment in its core businesses.

Mr O'Mahony added that the group would be disappointed not to make an acquisition in the next 12 months.