Wynnstay reports record profits as confidence returns to sector

Agricultural supplier Wynnstay reported record underlying and reported pre-tax profit in its interim results on Wednesday, as sector confidence returned, helped by stronger farmgate prices, greater clarity with the completion of the EU settlement, and the enactment of the UK Agriculture Bill.

The AIM-traded firm said revenue was up 9% year-on-year for the six months ended 30 April, to £249.71m, with commodity price inflation accounting for around 65% of the rise, and a combined first-time contribution of £5.5m from two bolt-on acquisitions.

Underlying pre-tax profit rose 23% to £5.53m, and reported profit before tax was 25% higher at £5.36m.

Basic earnings per share, including non-recurring items, was ahead 24% over the prior year at 21.62p.

Wynnstay reported net cash on 30 April of £4.01m on a pre-IFRS 16 basis, excluding leases, rising from £1.28m a year earlier, even after commodity inflation and a period of peak working capital use.

Net assets, meanwhile, were up to £101.05m or 504p per share at period end, compared to £96.84m or 487p per share at the end of 2020’s first half.

The board confirmed an 8.7% rise in the interim dividend, to 5p.

“These record interim results reflect strong recovery in farmer confidence, driven by higher farmgate prices, and clarity provided by the EU settlement and the landmark Agriculture Act,” said chief executive officer Gareth Davies.

“They also demonstrate the benefits of the group's broad spread of activities, supplying both livestock and arable farmers.

“We made good strategic progress, extending our reach in the eastern side of England with two bolt-on acquisitions, completing a major hire for our reorganised senior management team, and creating a dedicated role in support of the group's environmental, social and governance strategy.”

Davies said prospects for the second half of the financial year were “very encouraging”, with farmgate prices firm and a good harvest expected.

“We will continue to invest in the business to increase the group's manufacturing capacity and improve production efficiencies, and will look for further complementary acquisitions.

“With our strong balance sheet and good cash flows, we view the future with confidence.”

At 1151 BST, shares in Wynnstay Group were up 8.48% at 499p.