Wynnstay Group Plc
(“Wynnstay” or the “Group” or the “Company”)
Interim Results for the Six Months ended 30 April 2021
Record pre-tax profit as sector confidence returns
KEY POINTS
Financial
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Record underlying and reported pre-tax profit* results as sector confidence returns, helped by: |
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stronger farmgate prices, greater clarity with the completion of EU settlement and enactment of UK Agriculture Bill |
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balanced business model supplying products to both livestock and arable farmers |
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Revenue up 9% to £249.71m (2020: £229.29m), with commodity price inflation accounting for c.65% of the rise and a combined first-time contribution of £5.5m from two bolt-on acquisitions |
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Underlying pre-tax profit*up 23% to £5.53m (2020: £4.51m)/ Reported PBT up 25% to £5.36m (2020: £4.30m) |
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Basic earnings per share, including non-recurring items up 24% to 21.62p (2020: 17.50p) |
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Net cash at 30 April 2021 increased to £4.01m on a pre-IFRS 16 basis (excl. leases) (30 April 2020: £1.28m) even after commodity inflation and period of peak working capital utilisation |
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Net assets up to £101.05m/£5.04 per share at period end (30 April 2020: £96.84m/£4.87 per share) |
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Interim dividend up 8.7% to 5.00p (2020: 4.60p) |
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Operational
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Agriculture Division – revenue of £180.72m (2020: £166.41m), operating profit before non-recurring items up 21% to £2.20m (2020: £1.81m) |
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feed activity performed very well – manufactured volumes recovered strongly, buoyed by more normal winter weather pattern and improved farmgate prices |
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weaker performance from arable operations, as expected – with last year's exceptionally poor planting season and poor harvest, impacting grain trading and seed sales in line with national trend |
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Glasson activity performed well |
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Specialist Agricultural Merchanting Division – revenue of £68.88m (2020: £62.83m), operating profit before non-recurring items up 13% to £3.40m (2020: £3.02m) |
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strong demand for bagged feed |
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recovery in hardware sales as farmers returned to investing in their businesses |
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Commercial Sales & Marketing Director to join in July – completing the reorganisation of the senior management structure, and ESG Manager appointed |
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Two strategic bolt-on acquisitions completed – extending footprint in the eastern side of England |
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Board appointments – Steve Ellwood became Chairman from March 2021 and Catherine Bradshaw is to join as a non-executive director on 1 July |
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Outlook
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Strong trading conditions support a good outturn in H2, with farmgate prices firm and 2021 harvest on track to revert to more normal yield and tonnage |
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The Board remains very confident about the Group's longer term prospects, supported by strong financial position and growth initiatives in place |
*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 Group plc, commented:
“These record interim results reflect strong recovery in farmer confidence, driven by higher farmgate prices, and clarity provided by the EU settlement and the landmark Agriculture Act. They also demonstrate the benefits of the Group's broad spread of activities, supplying both livestock and arable farmers.
“We made good strategic progress, extending our reach in the eastern side of England with two bolt-on acquisitions, completing a major hire for our reorganised senior management team, and creating a dedicated role in support of the Group's ESG strategy.
“Prospects for the second half of the financial year are very encouraging, with farmgate prices firm and a good harvest expected. We will continue to invest in the business to increase the Group's manufacturing capacity and improve production efficiencies, and will look for further complementary acquisitions. With our strong balance sheet and good cash flows, we view the future with confidence.”