Origin Enterprises warns on profits following 'unseasonal' weather

Agri-services group Origin Enterprises issued a profit warning on Wednesday following a slow start to the year as a result of some "highly challenging" crop planting conditions in the first quarter.

Although Origin generates roughly 90% of its operating profits in the second half of the financial year, the group warned there had been "a slower start to trading" in the seasonally quiet first quarter.

Group revenue was €371.2m for the three months compared to the €430m brought in a year earlier - marking a decrease of 13.7% year-on-year.

On an underlying basis at constant currency, revenue declined 14.4% to €61.9m, reflecting an underlying volume reduction of 22% in sales of seed, crop protection and fertiliser.

The AIM-listed group blamed prolonged unseasonal weather conditions for a lower planted area for autumn and winter crops, which impacting agronomy service, seed and crop protection volumes in the period, principally in the UK and Romania.

Origin said: "The challenging weather conditions experienced by farmers and growers in the first quarter is expected to lead to a higher concentration of sales demand in the second half and an increased level of seasonality overall in the 2020 financial year.

"The reduced level of autumn plantings and higher level of spring plantings anticipated, particularly in the UK, means that group operating profit for FY20 is expected to be lower than the current range of analysts' estimates."

As of 0955 GMT, Origin shares had slipped 6.20% to €4.38 each.