Wynnstay Group PLC – Final Results

Wynnstay Group PLC – Final Results

Final Results for the year ended 31 October 2018. Record results in Wynnstay’s Centenary Year.

Key points

Financial

  • Record results, ahead of market expectations, reflected:
    –       recovery in farmer spending patterns with improved farmgate prices
    –       long, dry Summer, which boosted H2 performance across many key activities
  • Revenue from continuing operations rose by 18.4% to £462.66m (2017: £390.72m)
    –       acquisitions contributed £28.2m to increase
  • Gross profit rose by 16.7% to £61.71m (2017: £52.89m)
  • Underlying* Group pre-tax profit from continuing operations up 20.5% to £9.60m (2017: £7.97m). Reported pre-tax profit increased by 24.4% to £9.53m (2017: £7.66m)
  • Basic earnings per share from continuing operations up 21.1% to 39.11p (2017: 32.29p)
  • Net assets at 31 October 2018 increased by 6.7% to £91.07m (2017: £85.39m)
  • Proposed increased final dividend of 8.95p (2017: 8.40p), taking total for the year to 13.36p (2017: 12.60p), a rise of 6.03%
  • Trading at the start of the new financial year is in line with management expectationsOperational
  • Agriculture Division – revenue up 19.0% to £334.34m, operating profit up 28.4% to £4.29m
    – record sales of feed, grass seed and fertiliser, helped by extended, warm dry weather in H2
    – exceptionally strong performance from the Glasson business
    – increased production capacity in blended fertiliser with acquisition of Montrose, in East Scotland in November 2017
    –  grain trading activity expanded into Lincolnshire, with new office opened in Grantham
  • Specialist Agricultural Merchanting Division – revenue up 16.9% to £128.26m, operating profit up 16.7% to £5.53m
    – like-for-like revenue rose 9.8% y.o.y, with very strong sales of bagged feed, hardware and animal health products from depots
    – Group’s trading footprint was expanded, especially in the South West, through acquisitions. Former Countrywide depots remain on track to make a first time contribution to earnings in 2019
  • Increased investment in manufacturing facilities, depots, logistics fleet
  • Despite Brexit uncertainty, the Group is well-placed for future growth, backed by its broad spread of activities, increased geographic presence, and strong balance sheet

*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 17 for an explanation on how this measure has been calculated and reasons for its use.

Gareth Davies, Chief Executive of Wynnstay, commented:

“I am pleased to report record profit and revenue in what was Wynnstay’s Centenary Year. These strong results reflected the continued recovery in farmer spending with the improvement in farmgate price, also the unusually long dry Summer, which boosted feed, fertiliser and seed sales in the second half of the year. All of Wynnstay’s key activities, including sales across our network of depots, showed year-on-year growth. 

“We continued to expand our trading area with a number of acquisitions.  We now have a greater foothold in the West Country, and the acquisition of the Montrose fertiliser facility gives us our first operational presence in East Scotland.

“The UK agricultural trading backdrop remains robust although farmers have seen higher costs, particularly in feed, mostly driven by the long dry summer weather. While Brexit uncertainties remain, we are confident that British agriculture has positive long-term prospects, underpinned by macro-economic drivers as well as the UK’s relative lack of food self-sufficiency.

“Trading for the new financial year has started in line with management expectations. There are important trading months ahead and we will provide a further update at the Group’s AGM in late March.”

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