28 June 2022
AIM: WYN
Wynnstay Group Plc
(“Wynnstay” or the “Group” or the “Company”)
Interim Results for the Six Months ended 30 April 2022
Record interim results driven by strong sector backdrop and significant one-off gains
KEY POINTS
Financial
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Record interim results, ahead of original management expectations, driven by: |
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firm market backdrop, with strong farmgate prices boosting farmer sentiment |
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significant one-off gains from fertiliser blending activities at Glasson, caused by sharply rising natural gas prices |
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Revenue up 34% to £335.66m (2021: £249.71m), with significant inflation – accounted for c.£80m of the rise |
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£6.4m first contribution from Humphrey acquisition, completed in March 2022 |
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Underlying pre-tax profit*up 85% to £10.21m (20 21 : £5.53m)/ Reported PBT up 78% to £9.56m (20 21 : £5.36m) |
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Basic earnings per share, including non-recurring items, up 71% to 36.99p (20 21 : 21.62p) |
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Net debt at 30 April 2022 on a pre-IFRS 16 basis increased to £7.62m (30 April 2021: £0.75m net cash), reflecting acquisition funding and higher working capital requirements due to inflation |
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Net assets up 10.5% to £111.68m/£5.50 per share at period end (30 April 20 21 : £101.05m/£5.05 per share) |
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Interim dividend up 8.0% to 5.40p (20 21 : 5.00p) |
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Operational
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Acquisition of the Humphrey businesses completed in March 2022 for initial payment of £9.5m |
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in line with strategy to expand poultry feed manufacturing capacity for the growing free-range egg sector and immediately earnings enhancing |
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extends Group's geographic trading area into the South, the Midlands and South Wales |
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opportunity to redevelop mothballed Calne mill into modern, multi-species feed mill to support further expansion |
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Agriculture Division – revenue up 45% to £263.03m (20 21 : £180.72m), operating profit before non-recurring items up 176% to £6.06m (20 21 : £2.20m) |
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Glasson contribution significantly ahead due to one-off stock price gains from fertiliser blending activities |
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feed volumes up 3.25%, ahead of sector average, with good growth in target markets |
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grain trading volumes up 50%, reflected return to more normalised harvest and good autumn planting season. Lower spring cereal and grass seed sales, in line with sector |
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Specialist Agricultural Merchanting Division – revenue up 5% to £72.63m (20 21 : £68.88m), operating profit before non-recurring items up 26% to £4.28m (20 21 : £3.40m) |
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favourable sales mix on lower total volumes; strong sales of bagged feed, animal health care and hardware products |
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efficiency improvements helped drive higher profitability |
Outlook
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Trading conditions remain positive – underpinned by firm farmgate prices |
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Board believes Group is well-placed to achieve growth prospects for the full year; exceptional gains of H1 not expected to be repeated in H2 |
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– Group remains focused on acquisitions in key target areas |
* 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 6 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:
“Theserecord interim results have been underpinned by a favourable sector backdrop, with strong farmgate prices across most sectors and positive farmer sentiment, as well as significant one-off gains in our fertiliser blending activity.
“The acquisition of Humphrey Feeds and Pullets is exciting. It significantly extends our geographic reach and opens up new growth opportunities.
“While there are still challenges with cost inflation and supply chain pressures, sector sentiment remains strong, and we are confident about achieving our growth goals for the full year.”