NWF Group Plc - Latest Trading Update and Notice of Results
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NWF Group Plc
Trading Update and Notice of Results
Ahead of the publication of its interim results on 2 February 2021, NWF Group plc ('NWF' or the Group), the specialist distributor of fuel, food and feed across the UK, today provides a trading update for the half year ended 30 November 2020.
Following continued solid trading through the second quarter, the Board expects to report overall results for the half year in line with its expectations. As anticipated, overall performance will be slightly behind the prior year albeit with a further reduction in net debt as at 30 November 2020 and with leverage below 0.9x EBITDA. The Board remains confident of delivering its full year expectations.
The Group is satisfied that the cyber incident notified on 2 November 2020 has been contained and is pleased to report that this has not materially impacted the trading or commercial performance of the business. Additional security measures have also been integrated into the Group's IT systems to provide further resilience moving forward.
Our three divisions remain open and fully operational, given that they all provide essential services. We continue to monitor the latest developments on Brexit, have contingency plans in place where necessary, and critically, operate in large stable domestic markets with robust levels of demand.
Fuels - positive trading and development strategy restarted:
· Positive trading across the network with the benefit of prior period acquisitions performing as planned. There have not been any significant changes in demand in the first half year as a consequence of Covid-19 and oil prices have generally moved upwards during the period.
· Having taken a prudent pause in investment during the initial phase of the pandemic, the resilient performance of the businesses, together with the strong balance sheet position, enables us to re-commence our strategy to acquire fuel businesses to expand our geographical footprint and grow market share.
Food - new warehouse fully utilised, significant demand volatility creates short-term inefficiencies:
· The Food business has traded behind the prior year, partly as a result of the initial costs of bringing the new Crewe warehouse on stream and building customer stock levels as planned, but also due to significant demand volatility and consequential short-term inefficiency.
· There have been sharp peaks in demand exceeding operational capacity as retailer and consumer purchasing behaviour adjusted to lockdowns. In addition, the business mix has been adverse due to demand from higher revenue cash and carry and food service business being reduced given the restrictions around the hospitality sector.
Feeds - trading in line:
· Demand continued to be solid across the first half; although feed volumes were a little lower than prior year, trading was both in line with management expectations and the same period last year. Managing significant volatility in feed commodity costs which have recently hit record highs is a challenge for the agricultural markets.
Richard Whiting, Chief Executive of NWF Group, said:
"We had a solid first half with trading in line with our expectations. This performance is a further demonstration of the resilience of the Group, which given the challenges of keeping our people safe, managing demand volatility and responding to a cyber incident have demonstrated our teams' strong capabilities. We remain confident in our growth potential and continue to target development opportunities."
Notice of results
NWF will announce its half year results for the six months ended 30 November 2020 on Tuesday 2 February 2021.