Wynnstay Group PLC – WYN – Interim Results

Wynnstay Group PLC – WYN – Interim Results

Resilient Results in Exceptionally Challenging Market Conditions

Key points

Financial

Resilient results, with increased profitability, despite exceptionally challenging market conditions caused by coronavirus crisis, subdued farmgate prices, and ongoing Brexit uncertainty

results benefited from the Group’s balanced spread of agricultural activities, which provide a natural hedge against sector variation

Revenue of £229.29m (2019: £260.57m), reflecting commodity price deflation

Adjusted operating profit1 up 8% to £4.78m (2019: 4.43m)

Reported profit before tax up 4% to £4.30m (2019: £4.12m)

Basic earnings per share up 3% to 17.50p (2019: 17.01p)

Net debt on comparable basis to last year reduced to £2.54m at period end (2019: £14.70m), helped by commodity price deflation

IFRS 16 creates additional lease liabilities of £6.42m, which increase total debt to £8.96m

Net assets increased to £96.84m at period end (2019: £92.97m), which represents c.£4.87 per share

Short-term and committed bank facilities amounting to £20m recently renewed

Interim dividend of 4.60p per share maintained (2019: 4.60p), reflecting Board’s confidence in the strength of the underlying business

[1] Note 20. Explanation of Non GAAP measure

Operational

Agriculture Division – revenue of £166.41m (2019: £195.05m), operating profit of £1.81m (2019: £1.79m)

extreme wet weather adversely affected winter planting season, reducing demand for arable inputs

feed performance improved, although volumes reduced in line with national market trends

tight market for grain trading activities with margins under pressure

Specialist Agricultural Merchanting Division – revenue of £62.83m (2019: £65.48m), operating profit of £3.02m (2019: £2.67m)

‘Order & collect’ system established across depot network to ensure staff and customer safety during coronavirus ‘lockdown’, affected some ancillary sales. Nearly all depots have now resumed more normal trading protocols while ensuring social distancing

profitability increased, helped by cost efficiency programme commenced last year

Outlook

Board expects trading backdrop to remain under pressure for the remainder of the year in light of the coronavirus crisis and ongoing Brexit-related uncertainties

Wynnstay is well-positioned financially and operationally to navigate the near term challenges and will continue with investment programme

Gareth Davies, Chief Executive of Wynnstay, commented:

 

“These resilient results in the face of the headwinds created by the coronavirus pandemic, continuing Brexit uncertainty and subdued farmgate prices, demonstrate the robustness of the business. Wynnstay’s broad spread of agricultural activities is a significant strength, acting as a natural hedge against sector variations.

“We are proud of the way staff responded to the challenges of trading under the Government’s emergency ‘lockdown’ measures, which meant that we were able to maintain the supply of products and services to customers, albeit with necessary adaptations.

“The Group is well-placed financially and operationally to navigate the ongoing coronavirus crisis. While we expect the remainder of the year to remain challenging, our confidence in the long-term prospects for Wynnstay remain undiminished.”

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