Coronavirus Update

Wynnstay Group Plc - Final Results 2020

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Wynnstay Group Plc

("Wynnstay" or the "Group" or the "Company")

Final Results

For the year ended 31 October 2020

Resilient results in an unprecedented year of challenges

Key points

Financial

 

Resilient results in a year of unprecedented challenges for the sector

 

 

 

historically poor 2019 autumn planting season and 2020 UK harvest at 20 year low

 

 

 

subdued farmer confidence and investment, reflecting weaker farmgate prices in H1 and Brexit uncertainty

 

 

 

coronavirus pandemic

 

 

Revenue of £431.40m (2019: £490.60m), affected by commodity deflation and reduced volumes in certain traded commodities, in particular grain

 

 

Increase in underlying pre-tax profit*, up 4% to £8.37m (2019: £8.01m)/ Reported PBT of £6.98m (2019: £7.55m)

 

 

Basic earnings per share, including non-recurring items, of 27.73p (2019: 30.95p)

 

 

Net cash at year end increased to £8.42m; £14.71m before IFRS 16 implementation (31 October 2019: £3.84m before IFRS 16 implementation )

 

 

Net assets increased to £98.18m/£4.92 per share at year end (31 October 2019: £94.95m/£4.79 per share)

 

 

Proposed final dividend of 10.00p (2019: 9.40p), taking total for the year to 14.60p (2019: 14.00p), a 4.3% rise

 

Operational

 

Agriculture Division - revenue of £302.58m (2019: £358.69m), profit of £2.88m (2019: £2.95m)

 

 

feed activity performed very well - improved gross margin, with manufactured volumes in line with last year

 

 

arable activity was affected by lower demand for arable inputs and reduced volumes of grain available for trading, reflecting very poor autumn planting and harvest

 

 

Glasson activity delivered a solid performance

 

Specialist Agricultural Merchanting Division - revenue of £128.81m (2019: £131.84m), profit increased 10% to £5.78m (2019: £5.24m)

 

 

like-for-like sales were just 1% lower, helped by a stronger H2

 

 

margins enhanced by ongoing efficiency programme, and network optimisation continued

 

Continued focus on strengthening specialist advisory teams across all our sectors

 

Reorganisation of management structure in H2; new roles and reporting lines to support growth plans

 

Significant investment programme started in FY2021 to increase feed manufacturing capacity and improve productivity

Outlook

 

Farmer confidence significantly improved with EU trade deal and stronger farmgate prices

 

UK Agriculture Bill creates significant opportunities with farmers now incentivised for efficiency and environment initiatives

 

Trading in the new financial year is in line with management expectations


*
 Underlying pre-tax profit is a non-GAAP (generally accepted accounting principles) measure and is not intended as a substitute for GAAP measures and may not be calculated in the same way as those used by other companies. Refer to Note 14 for an explanation on how this measure has been calculated and the reasons for its use.

Gareth Davies, Chief Executive of Wynnstay, commented:

"Wynnstay's strengths have been clearly demonstrated in what was an exceptionally difficult year for both the agricultural sector and wider society. Our resilient results reflect well on our balanced business model, strong financial management and recent growth initiatives.

"The new financial year has started well, and Wynnstay's performance is in line with management expectations. We remain focused on developing our channels to market, investing to build capacity and capability, particularly advisory, and implementing efficiencies. 

"Stronger farmgate prices, the EU settlement and UK Agricultural Bill continue to buoy sentiment across the farming sector. We believe that Wynnstay is in an excellent position to help farmers adapt to new priorities set by the Agricultural Bill, and look to the future with confidence".