Long winter a boon for Wynnstay's feed division

Wynnstay posted what it called an “encouraging” set of first half results on Wednesday, explaining that they reflected a continuing recovery in farmgate prices across the agricultural sector as farmer confidence returned.

The AIM-traded firm said the group saw growth across both of its divisions, and acquired 10 country stores in the first half, including eight in April alone.

It claimed it remained well-positioned to meet current market expectations for the full year.

Wynnstay said revenue from continuing operations for the six month period, which ended on 30 April, was up 10.3% at £218.53m.

Its operating profit from continuing operations, before investment impairment and corporate restructuring and acquisition costs, rose 15.9% to £5.09m, while its profit before tax from continuing operations added 15.7% to £4.91m.

Earnings per share from continuing operations improved 13.3% to 20.14p.

The company’s net assets as at 30 April stood at £88.05m, up from £85.03m a year earlier, while the board said the interim dividend was rising 5.0% to 4.41p per share.

On the operational front, revenue in the agricultural division was ahead 9.9% at £160.14m, with divisional operating profit rising 33% to £2.05m.

The company said that unit’s strongest recovery was in feeds, which was driven by both farmers returning to more typical feeding patterns and the protracted winter.

It said arable product orders were delayed by the late spring; although on a year-to-date basis sales were now at normal levels.

In its specialist retail division, Wynnstay said revenue was ahead 11.4% to £58.27m, while operating profit rose 6.2% to £3.10m.

Wynnstay Stores was said to have benefited from the improved trading backdrop during the half, with like-for-like sales up 8%, excluding inflation.

It acquired eight stores from the administrators of Countrywide Farmers at the end of April, and an investment and integration programme wa now underway, the board said.

That acquisition would establish a “firmer footprint” for the group in Devon and Cornwall, it added.

Wynnstay’s board also reiterated that its CEO, Ken Greetham, was retiring from the group in early July, with Gareth Davies appointed to succeed him, as it had previously reported.

It said a smooth handover process was now “well advanced”.

Davies was previously the joint managing director of Wynnstay Agricultural Supplies.

“Wynnstay's interim results are encouraging, with the group's stronger performance reflecting the long-awaited upturn for the agricultural sector, which started to come through in 2017,” said chief executive Ken Greetham.

“The continuing improvement in farmgate prices has boosted farmer confidence, and demand across most product categories was higher year-on-year.

“Demand for feed also benefited from the prolonged winter.”

Greetham said the firm was continuing to invest in and develop the group in line with the board’s strategic plans, and, at the end of April, it acquired eight stores from the administrators of Countrywide Farmers.

“This strategic acquisition together with two separate store purchases strengthen our presence in a number of counties, especially in the South West of England, where Wynnstay is currently under-represented.

“Trading remains in line with overall budgets and the Group is well-positioned to meet current market expectations for the full year,” he confirmed.