Fevara, formerly Carr’s Group (LON:CARR), used a half-year investor presentation to outline progress against a three-pillar strategy introduced about 18 months ago, highlighting margin expansion, a shift toward higher-quality earnings, and the group’s first acquisitions in Brazil. Chief Executive Officer Joshua Hoopes and Chief Financial Officer Gavin Manson said the business remains on track to deliver a full-year result “in line with market expectations,” with trading since the half-year described as encouraging.
Business overview and strategy
Hoopes described Fevara as an international livestock supplement company focused on extensive, pasture-based systems. The group’s main product categories are dehydrated molasses feed licks (described as the “predominant revenue and margin driver”), bagged minerals (manufactured in Scotland and, following recent acquisitions, in Brazil), and trace mineral boluses, which have moved from in-house UK production to an outsourced model.
- Improving operating margin
- Delivering profitable commercial growth
- Expanding into new growth markets, with Brazil identified as the near-term priority
Alongside the half-year results, management also set out a medium-term ambition of a “triple region profit engine,” targeting $5 million of EBITDA from each of the US, the UK/Europe, and Brazil. Hoopes said this roadmap implies over $120 million of revenue, $15 million of EBITDA, a double-digit EBIT margin, and over a 20% return on capital employed, using existing assets and “established risk and financial controls.”
Half-year performance: profit growth driven by mix and structural changes
Hoopes said first-half revenue rose 2.2% on a constant FX basis, while adjusted operating profit increased 22% year over year. He highlighted “a very strong stand-out performance” in the UK business, up 26%, and 5% growth in the US business.
Manson said the group’s recent actions have emphasized “quality of earnings,” including reducing low-margin product sales in the UK. He said that reduction was offset by “extremely strong performance” in the strategic low moisture block product, which helped deliver 13% growth overall in the UK.
In the US, Manson said the southern states performed strongly, driven by the Oklahoma site, where the company recorded 28% volume growth following actions taken in the second half of the prior year. That strength was offset by weather-related softness in the northern states, where winter conditions were milder than usual, reducing demand for the company’s products. Overall, Manson characterized the US as broadly flat, with 4% volume growth and 4% growth on a constant currency basis.
The first-half results included an initial contribution from Brazil. Manson said the group’s first acquisition there, Macal, closed on Christmas Eve and therefore contributed two months to the first-half numbers, which also represented “the two quietest months of the year seasonally in Brazil.”
Margin improvement, cost actions, and operational initiatives
Management attributed the profit improvement to both structural portfolio actions and operating leverage from a higher-margin mix. Responding to a question about margin gains, Hoopes said “a lot of the hard work has been done” to remove dilutive elements, citing the sale or restructuring of loss-making activities and the move to outsource UK bolus production. However, he said additional opportunities remain in pricing, procurement, and “limited smaller capital programs” to drive further savings toward the group’s 10% full-year EBIT margin target.
Hoopes said operating margin improved 2.5 percentage points in the first half versus the prior year, driven by margin pricing actions, benefits from capital invested in bulk storage at the Oklahoma facility, and improved net product margin in boluses following the shift to an outsourced provider in France. He also noted two new manufacturing process patents filed in the first half aimed at reducing energy costs and potentially improving throughput.
Manson highlighted continued progress in reducing central costs. Hoopes said central costs fell nearly 27% in the first half versus last year as the group “right size[d]” the cost base after becoming more focused. Manson cautioned there is a limit to reductions given listed-company requirements, but said further annualization of actions taken in the first half will continue to flow through in the second half.
Brazil entry: two acquisitions and low moisture block build-out
Management positioned Brazil as a major growth lever, particularly for low moisture blocks. Hoopes said the company completed two acquisitions in the first half and recruited three experienced local general managers, including a general manager for Brazil, aligning with Fevara’s country leadership model.
Hoopes said Macal was acquired for £5 million and is “very cash generative and profitable,” generating £700,000 of EBITDA. He said the acquisition is expected to be “immediately accretive on a full-year basis” and will also serve as a distribution channel for low moisture blocks in Mato Grosso do Sul.
The second acquisition, Ceadesul in São Paulo, closed in March. Hoopes said the “primary value” of that purchase was the freehold property, which includes an additional well-specified, empty facility intended to house a low moisture block manufacturing line. The company expects operational synergies by “piggybacking” the new line onto an existing minerals operation.
Hoopes said the planned low moisture block equipment and plant build-out will cost around £4 million. Contracts have been signed and engineering work is underway, with the company expecting to be producing low moisture blocks in Brazil “this time next year.” He later added that the expected product launch is in the second half of 2027. The commercial model is expected to use a hub-and-spoke distribution approach, wholesaling to distributors in targeted states, with Macal and Ceadesul expected to play distribution roles in their respective regions.
On governance, Manson emphasized that Brazil entry is via wholly owned acquisitions rather than joint ventures, meaning the group has “complete control” over governance and compliance, and is implementing the same financial controls used elsewhere.
Balance sheet, cash, and capital allocation
Manson said fixed assets increased due to the Macal acquisition, including the accrual of potential deferred consideration. At the half-year, the group reported net cash of £1.4 million, but Manson noted the mid-March Brazil acquisition moved the company to a small net debt position “currently.” He added that the group expects additional non-trading cash inflows in the second half related to property sales and other items.
Fevara also completed a new £20 million group banking facility with HSBC in November 2025, which Hoopes said would support expansion plans. Manson said the company is comfortable with its cash position and believes it has sufficient “firepower” to implement the strategy without further funding requirements.
On cash flow, Manson said first-half cash generation reflected EBITDA generation offset by the Macal acquisition. The group also received £1.4 million of deferred consideration from previous transactions in the first half, and Manson said full-year non-trading cash is expected to be around £6 million, depending on timing.
Fevara continues to hold some non-productive properties for sale, and it also has one remaining engineering business, Chirton Engineering, classified as a discontinued operation. Manson said the company is in discussions with multiple parties and hopes to complete a sale before the end of the financial year, while being conservative on valuation due to oil and gas sector challenges.
Earnings per share rose from 5.1 pence to 11 pence, which Manson attributed to 22% growth in earnings and a 47% reduction in shares outstanding following a tender offer in 2025 that returned £70 million to shareholders. The interim dividend was maintained at 1.2 pence per share, with Manson reiterating a progressive dividend policy and a target dividend cover of at least 2x, while also pursuing growth investment.
In closing remarks, Hoopes said the company sees resilience in its end markets and does not anticipate near-term material impacts from the Middle East conflict, noting that UK gas prices have been fixed through 2028 and key raw materials are priced to the end of the financial year. He said Fevara remains focused on executing the strategy, particularly the Brazil expansion, and reiterated confidence in meeting full-year expectations.
About Carr’s Group (LON:CARR)
Carr’s Group plc is an international, pure-play specialist agriculture manufacturer and provider of research-proven, value-added livestock supplements.
Carr’s Group’s mission is to drive sustainable global food security through enhancements to pasture grazing productivity, enabled by research-based products that optimise livestock performance and profitability for farmers. The Group produces nutritional animal supplements including feed licks, blocks, bagged minerals, and boluses for cattle, sheep, goats and horses.
