NWF Group plc (‘NWF’ or ‘the Group’), the specialist distributor of fuel, food and feed across the UK, today announces a trading update for the half year ended 30 November 2019 and its notice of half year results.
The Group expects that overall trading for the half year will be ahead of prior year, with net debt as at 30 November 2019 in line with the Board’s expectations. The Board remains confident of delivering its full year expectations.
Fuels – positive trading and two further acquisitions completed:
· Positive trading across the network with the benefit of prior year acquisitions performing as planned. Investment continues in systems and people to improve efficiencies and provide a strong platform for continued growth.
· In line with the strategy to acquire fuel businesses to expand the geographical footprint and grow market share, the Group is also pleased to announce two recent acquisitions completed since the AGM on 26 September:
o Caldo Oils Limited (‘Caldo’), a 5 million litre business in the North West which has been integrated into the Wardle depot, completed on 15 October 2019; and
o Ron Darch & Sons Co Ltd (‘Darch’), a 35 million litre distributor based in Yeovil in Somerset with two depots and a complementary coal distribution business selling 5,000 tonnes per annum, completed on 2 December 2019.
Food – positive trading momentum maintained alongside significant new contract win:
· The Food business has traded ahead of prior year with increased storage and activity levels, in part as a consequence of additional demand prior to 31 October. It continues to be successful in winning new business.
· The Group is pleased to announce a significant expansion of the Food division on the back of a new five-year contract with a major food customer. To support this contract and the continued organic growth from a number of other customers, the Group has signed a lease to operate an additional, newly constructed 240,000ft2 warehouse in Crewe conveniently located close to the M6 and to the main Wardle site. This warehouse will increase the capacity of the Food division from 100,000 pallets to 137,000 pallets. The Board anticipates this new site will be fully operational within six months.
Feeds – trading in line:
· Demand continued to be robust across the first half with feed volumes ahead of prior year, and trading both in line with expectations and the same period last year. New business has been won across the country and a training academy has been launched as planned.
Financial impact of recent acquisitions and the expansion of Food:
· The acquisitions of Caldo and Darch are expected to add around £0.5 million to Fuels’ profitability in the current financial year.
· The take on of the new Food contract and warehouse is expected to be enhancing to divisional profitability in the Group’s next financial year ending May 2021, with initial start-up costs impacting the current financial year by around £0.5 million.
· These investments will increase net debt by approximately £7.0 million.
Richard Whiting, Chief Executive of NWF Group, said:
“We had a good first half and are trading in line with our expectations. During the period, we continued the expansion of NWF in line with our strategy; the two further Fuels acquisitions added to the three previously announced, increasing our annualised volumes by almost 30%. We are also significantly expanding the Food division with a major new contract and warehouse. We remain confident in our growth potential and prospects.”