NWF to beat full-year forecast amid oil price surge

Fuel, food and feed supplier NWF Group reported “strong” trading in an update on Tuesday, flagging a better-than-expected full-year turnout as a result of tightening conditions in the fuel market.

The AIM-traded firm said it carried its “very strong” first half momentum into the second half of the year ending 31 May, with demand in the fuels business accelerating to the extent that it now expected its results to be “significantly ahead” of previous expectations.

It said cash generation remained strong, with lower net debt anticipated at year-end.

“In fuels, the strong reported outperformance in the first half has continued,” the board said in its statement.

“Amidst significant volatility in the oil price, the business has seen elevated demand in the short term, with customers valuing the high levels of service provided across our depot network.

“Food has performed as planned with storage levels having increased quickly as manufacturers and importers respond to the strong demand seen in the first half.”

In feeds, with price increases continuing to be implemented, NWF said cost inflation had been recovered, with its focus still on developing long-term volume growth.

“Since the start of the conflict on 24 February the impact to date has been most significant in fuels, with the price of Brent crude over $120 per barrel and with very significant volatility leading to elevated levels of demand,” the board added, referring to Russia’s unprovoked and violent invasion of Ukraine.

“To date, there have been no major supply issues and we continue to meet demand across the country.”

Feeds commodity prices, including wheat and barley, had increased to unprecedented highs, but with most raw materials now purchased for the winter period it said that impact would be most keenly felt in May, moving into the summer trading period.

“We continue to monitor the situation very closely and our thoughts are with all the people and their families impacted by this crisis.”

At 1529 GMT, shares in NWF Group were up 1.84% at 212.85p.