Wynnstay puts in resilient performance in tough year for sector

Agricultural products and services company Wynnstay reported “resilient” results for the 2020 financial year on Wednesday, in what it described as a “year of unprecedented challenges” for the sector.

Revenue came in at £431.4m, down from £490.6m, which the board said was affected by commodity deflation and reduced volumes in certain traded commodities, in particular grain.

The AIM-traded firm said the 2019 autumn planting season was “historically poor”, with the 2020 UK harvest at a 20-year low.

It also reported subdued farmer confidence and investment, reflecting weaker farmgate prices in the first half of the year ended 31 October, as well as Brexit uncertainty, and the impact of the Covid-19 pandemic.

Wynnstay did report a 4% improvement in its underlying pre-tax profit to £8.37m, while reported profit before tax slipping to £6.98m from £7.55m.

Basic earnings per share, including non-recurring items, totalled 27.73p, down from 30.95p year-on-year.

Net cash at year-end was up £8.42m to £14.71m before the implementation of IFRS 16, while net assets improved to £98.18m or £4.92 per share at year-end, from £94.95m or £4.79 per share a year earlier.

The board proposed a final dividend of 10p, up from 9.4p for 2019, taking the total distribution for the year to 14.6p, up 4.3% over the prior year.

Looking at the 2021 financial year, Wynnstay said farmer confidence had “significantly” improved, with the EU trade deal agreed and stronger farmgate prices evident.

It said the UK Agriculture Bill would create “significant opportunities”, with farmers now incentivised for efficiency and environment initiatives.

Trading so far in the new financial year was in line with management expectations.

“Wynnstay's strengths have been clearly demonstrated in what was an exceptionally difficult year for both the agricultural sector and wider society,” said chief executive officer Gareth Davies.

“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.”

Davies said the company remained focussed on developing its 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.”

At 1051 GMT, shares in Wynnstay Group were down 1.51% at 359.5p.