Shares in one of Britain’s biggest agricultural firms hit a year high yesterday after it reported a 27% increase in first-half turnover and 48.9% surge in pre-tax profits.

Carr’s Milling Industries also said the outlook was more encouraging as the long-term fundamentals for agricultural markets were turning increasingly positive because of the increasing global demand for food.

Shares closed the day up more than 7% at 697.5p. The previous high was 690p.

Carlisle-based Carr’s said sales in the six months to February 26 climbed £43.4million to £204.7million, while pre-tax profits were £7.9million.

Agricultural sales at £124million were up 26.8%, while pre-tax profits rose 24.9% to £4million. Like-for-like sales surged 18.3%.

Chief executive Chris Holmes said December’s bad weather had boosted farm-based sales, with compound feed volume up on 2009. Its Caltech feedblock business achieved an 8% volume rise. Fuel sales rose too and the group’s agricultural machinery franchise arm was said to have performed well, benefiting from its appointment as a dealer for Kuhn farm equipment.

Ayr-based Scotmin Nutrition and A.C. Burn, of Jedburgh, Selkirk and Berwick, which Carr’s bought last June for £5.62million from the Buccleuch Group, had been fully integrated and were doing well. They, and Forsyths of Wooler – bought in September – had produced £8.3million of sales and pre-tax profits of £400,000.

Scotmin’s supplement range is to be sold nationwide by the year-end to complement Carr’s own products.

Mr Holmes said Carr’s had launched its Crystalyx feedblock range in New Zealand to considerable success and high demand. It is also in August opening a new production plant in New York state in the US for its AminoMax rumen bypass protein.

The group’s agricultural manufacturing operations, which include bases at Invergordon and Montrose, benefited from strong fertiliser demand. Sales rose 61.9% to £36.8illion, while pre-tax profits more than doubled to £2.6million from £1.1million.

Mr Holmes said the scale of demand for fertiliser was one of the main reasons for group net debt having surged to £28million, representing a gearing of 70%. He is, however, confident this will fall well below 50% as cash comes in for the fertiliser, which has been bought in significantly higher volume than normally the case at this time of year.

Mr Holmes said the group’s flour-milling operations would benefit from new port facilities at Kirkcaldy, where its Hutchisons flour business is based. He said with demand for wheat from the burgeoning bioethanol fuel sector along England’s north-east coast ever-increasing the group had to take action to protect supplies, adding: “ It is always cheaper to move grain than flour.”

Hutchisons boasts some big customers in Scotland, including Aberlour-based Walkers Shortbread.

Mr Holmes said Carr’s flour operation faced challenges nationally because of milling overcapacity but it was responding to this by producing more speciality flours sold through supermarkets.

Flour and food sales rose 13.2% to £38.3million, but pre-tax profits fell £200,000 to £700,000. The performance was described as credible, given wheat prices more than doubling since June.

House broker Investec expects Carr’s to deliver full-year pre-tax profits of £12.3million, a £3.3million increase on 2010 figures.