Disposal/Trading Statement

CARR'S MILLING INDUSTRIES PLC 16 July 1999 CARR'S MILLING INDUSTRIES PLC ('Carrs', the 'Group' or the 'Company') Disposal of joint venture Update on current trading and prospects Disposal of Joint Venture The Directors of Carrs, the agriculture, food and engineering group, announce that the Company has reached agreement for the sale of its 50 per cent. interest in Robertsons Limited ('Robertsons') to Kears Group Limited ('Kears Group'), along with the leasehold property in Carlisle currently occupied by Robertsons. The aggregate consideration receivable by Carrs for the disposal will be £3.41m in cash, payable at completion. Robertsons carries on business principally as a baker and distributor of bread to a range of customers, including major retail chains, and has operated as a joint venture company since October 1994. Kears Group, which indirectly owns the other 50 per cent. interest in Robertsons and is a subsidiary of Irish-based Greencore Group plc, has responsibility for its management. The disposal reflects the board's strategy of focusing resources more closely on developing Carrs' core businesses. The disposal will initially be earnings negative for the Group. However, the directors believe it will have the following significant advantages for the Group: * the disposal will raise cash which will initially be used to reduce borrowings; * it will allow the greater part of the cash raised subsequently to be invested in essential capital improvements at the Group's flour mill at Silloth-on- Solway, Cumbria. The directors believe the flour milling business will benefit substantially in the longer term from this capital investment, and that such investment is necessary to maintain its position in the market; * the disposal will create greater flexibility within the Group's flour milling operations and enable the directors to develop their strategy of seeking new supply arrangements for additional product lines; and * Carrs will no longer have an interest in a business which is in competition with a number of its customers. For the year ended 26 September 1998, Robertsons made a profit before taxation of £1,057,000 on sales of £13,315,000 and as at 26 September 1998, Robertsons had net assets of £1,730,000. The net book value of the bakery property as at 27 February 1999 was £933,000. The disposal is conditional upon the approval of shareholders. A circular and a notice convening an extraordinary general meeting of the Company, to be held at 11.00am on 2 August 1999, will be sent to shareholders later today. Current Trading and Prospects Since the interim results were published on 28 April 1999, the Group's trading environment and outlook have remained much the same. Trading conditions are still very competitive; however, the outlook for the Group following the disposal (the 'Continuing Group') in the next 12 months is encouraging. In particular, the restructuring of the Group's agricultural activities, the principal area of its business, continues to provide benefits, although these are currently hindered by the strength of the pound against the Euro, the agricultural spending climate and over-capacity in the markets in which the Continuing Group operates. The Board is confident that the Continuing Group is well placed to benefit from any upturn in the economy and in the various markets in which the Continuing Group trades. Enquiries: Carr's Milling Industries PLC 01228 528291 Chris Holmes (Chief Executive) Ron Wood (Finance Director) Charterhouse Securities Limited 0171 248 4000 Colin La Fontaine Jackson Bankside Consultants Limited 0171 220 7477 Charles Ponsonby