NWF hikes dividend after meeting pre-Covid expectations

Food, fuel and feed distributor NWF Group reported a 1.7% decline in revenue in its final results on Tuesday, to £675.6m, as its headline operating profit slid 9.8% to £12.9m.

The AIM-traded company said fully-diluted headline earnings per share were 4.2% weaker for the year ended 31 May, at 20.4p, while net debt narrowed by 53.7% to £5.7m.

That made for a net debt-to-EBITDA ratio, excluding IFRS 16 lease liabilities, of 0.3x, compared to 0.7x at the end of the 2020 financial year.

The board proposed a 4.3% increase to the total dividend for the year, to 7.2p per share, making for a 10th consecutive year of dividend improvements.

Operationally, NWF said its performance was ahead of the market expectations established before the Covid-19 pandemic, with its profit performance being the second highest on record for the group, with the prior year benefitting from a “significant” fall in the oil price.

It said it outperformed in fuels, with “strong” heating oil demand supported by a cold winter, and an increase in home working during the pandemic.

The company also reported a strong second-half recovery in food, delivering on the expected benefits of the new warehouse in Crewe, which had been fully utilised.

Performance in feeds was impacted by the “significant” increase in feed commodity prices, and reduced management information as a result of a cyber security incident.

NWF said it had continued its “effective response” to the Covid-19 pandemic, with all divisions remaining open and operational, providing essential services through the various lockdowns and levels of restrictions.

It had continually updated its risk assessments across the group, enabling safe working and meeting customer needs, noting that it had used no government support and furloughed no staff.

Performance in the current financial year-to-date had been in line with the board's expectations, the directors added.

“I am pleased to report another year of outperformance for the group, exceeding the market expectations that were established before the pandemic,” said chairman Philip Acton.

“I am proud of the response of all our employees to the Covid-19 pandemic and would like to thank them for their ongoing efforts during this difficult time.

“The resilience and capability of the Group has been highlighted in the positive response to the challenges of Covid-19, Brexit uncertainty and the cyber incident experienced by the group in the first half.”

At 0922 BST, shares in NWF Group were up 0.46% at 218p.