Wynnstay Group PLC – WYN – Final Results

Wynnstay Group PLC – WYN – Final Results

Key points

Financial

·   

Resilient results in a year of unprecedented challenges for the sector

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historically poor 2019 autumn planting season and 2020 UK harvest at 20 year low

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subdued farmer confidence and investment, reflecting weaker farmgate prices in H1 and Brexit uncertainty

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coronavirus pandemic

·   

Revenue of £431.40m (2019: £490.60m), affected by commodity deflation and reduced volumes in certain traded commodities, in particular grain

·   

Increase in underlying pre-tax profit*, up 4% to £8.37m (2019: £8.01m)/ Reported PBT of £6.98m (2019: £7.55m)

·   

Basic earnings per share, including non-recurring items, of 27.73p (2019: 30.95p)

·   

Net cash at year end increased to £8.42m; £14.71m before IFRS 16 implementation (31 October 2019: £3.84m before IFRS 16 implementation )

·   

Net assets increased to £98.18m/£4.92 per share at year end (31 October 2019: £94.95m/£4.79 per share)

·   

Proposed final dividend of 10.00p (2019: 9.40p), taking total for the year to 14.60p (2019: 14.00p), a 4.3% rise

Operational

·   

Agriculture Division - revenue of £302.58m (2019: £358.69m), profit of £2.88m (2019: £2.95m)

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feed activity performed very well - improved gross margin, with manufactured volumes in line with last year

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arable activity was affected by lower demand for arable inputs and reduced volumes of grain available for trading, reflecting very poor autumn planting and harvest

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Glasson activity delivered a solid performance

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Specialist Agricultural Merchanting Division - revenue of £128.81m (2019: £131.84m), profit increased 10% to £5.78m (2019: £5.24m)

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like-for-like sales were just 1% lower, helped by a stronger H2

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margins enhanced by ongoing efficiency programme, and network optimisation continued

·   

Continued focus on strengthening specialist advisory teams across all our sectors

·   

Reorganisation of management structure in H2; new roles and reporting lines to support growth plans

·   

Significant investment programme started in FY2021 to increase feed manufacturing capacity and improve productivity

Outlook

·   

Farmer confidence significantly improved with EU trade deal and stronger farmgate prices

·   

UK Agriculture Bill creates significant opportunities with farmers now incentivised for efficiency and environment initiatives

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Trading in the new financial year is in line with management expectations

*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, commented:

"Wynnstay's strengths have been clearly demonstrated in what was an exceptionally difficult year for both the agricultural sector and wider society. Our resilient results reflect well on our balanced business model, strong financial management and recent growth initiatives.

"The new financial year has started well, and Wynnstay's performance is in line with management expectations. We remain focused on developing our channels to market, investing to build capacity and capability, particularly advisory, and implementing efficiencies.

"Stronger farmgate prices, the EU settlement and UK Agricultural Bill continue to buoy sentiment across the farming sector. We believe that Wynnstay is in an excellent position to help farmers adapt to new priorities set by the Agricultural Bill, and look to the future with confidence".

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