NWF Group plc Interim Results

NWF Group plc, the specialist agricultural and distribution business, today announces its interim results for the half year ended 30 November 2011.
 
Commenting on the results, Mark Hudson, Chairman, said: ‘NWF delivered a solid set of results despite a backdrop of difficult market conditions in the first half, with performance in line with the Board’s expectations. Feeds performed well with the business increasing share in a market which was negatively impacted by high feed costs and good grazing conditions. Food delivered a record result in spite of continued short-term demand volatility driven by promotional activity. Fuels traded below our expectations but this was directly attributable to the warmest October and November on record.’
Financial highlights:

• Revenue up 29.6% to £263.7 million (H1 2010: £203.4 million)
• Operating profit £2.4 million (H1 2010: £3.2 million)
• Profit before taxation down 18.2% to £1.8 million (H1 2010: £2.2 million)
• Basic earnings per share down 12.5% to 2.8p (H1 2010: 3.2p)
• Interim dividend per share unchanged at 1.0p (H1 2010: 1.0p)
• Net debt £29.3 million (30 November 2010: £17.1 million)
• Refinanced £55.0 million banking facilities to October 2015

 
Operational highlights:
Feeds – revenue increased by 23.9% to £60.1 million (H1 2010: £48.5 million) as a result of increased prices. Operating profit of £0.6 million is in line with expectations in spite of good grazing conditions, against a record prior period of £1.5 million when gains were made on forward raw material purchases. Market share gains have been delivered with particular success in blends.  
 
Food – revenue increased by 2.7% to £22.9 million (H1 2010: £22.3 million). Operating profits were a record £1.8 million compared to £1.0 million in the prior year. This resulted from a number of initiatives including increased backloads and more efficient operations. Demand continued to be volatile and overflow warehousing was utilised as storage was at capacity during the period.
 
Fuels – revenue increased by 36.3% to £180.7 million (H1 2010: £132.6 million) as a consequence of higher crude oil prices and the acquisitions successfully completed in the last twelve months. Operating profit was at breakeven (after £0.3 million acquisition and integration costs) compared to £0.7 million in the prior year. Volumes were up 18.2% to 201 million litres (H1 2010: 170 million litres). The division made a significant 42 million litre bolt-on acquisition at the end of September adding 10% to volume and enhancing NWF’s depot network.
 
On the outlook for the coming six months Mark Hudson added: ‘The prolonged period of exceptionally mild weather and its effect on the fuel market has adversely impacted our Fuels division’s earnings in the current financial year. This shortfall is likely to result in the Group results for the current financial year coming in significantly below the Board’s expectations.’