Origin Enterprises warns on profits following prolonged rain

Agri-services group Origin Enterprises issued a profit warning on Wednesday following some "prolonged and challenging" weather conditions across Ireland and the UK.

Origin said significant rainfall in the UK between December 2019 and February 2020 meant that its total area for winter crops in the UK would be "at least" 40% lower year-on-year.

The London-listed group added that a greater area would now transfer to spring cropping, with a consequential fall in investment spending by farmers and growers on agronomy services and crop inputs.

"With the extent of the shortfall in winter cropping in addition to the poor establishment of already sown crops, the total planted area for the 2020 financial year is expected to be circa 10% lower year on year," said Origin.

"The impact on Ireland and UK performance of the adverse conditions experienced to-date together with the challenges associated with an anticipated large increase in spring cropping, means that it is expected that group operating profit and adjusted diluted earnings per share for the full year will now be significantly below the current range of analysts' estimates."

In continental Europe, Origin said the season "progressed well" and now anticipates "good sales growth" for the full year, while its Latin American operations had "a good start to the year", delivering underlying volume growth against lower market demand.

As of 1425 GMT, Origin shares were down 11.27% at €3.15 each.