Low farmgate prices impacts Wynnstay results

Lower farmgate prices had a big impact on Wynnstay Group in 2015, with its agricultural customers keeping their wallets closed.

The AIM-traded agricultural products firm described its performance for the year ended 31 October 2015 as "resilient" despite challenging trading conditions, with low farmgate prices impacting farmers.

Group revenue was £377.38m, down from £413.56m in 2014, which the company said was impacted by commodity price deflation.

Wynnstay's pre-tax profit, before share based payments and exceptional charges, increased by 4% to £9.05m.
The company's underlying earnings per share were up 3% to 36.32p, and its net assets increased 7.3% to £82.86m.

Net cash at year end was down to £2.14m, from £2.75m.

"These robust results were supported by recent acquisitions as well as increased volumes and efficiency gains in some sectors," said Wynnstay chief executive Ken Greetham.

"We continued to expand out business during the year, including the acquisition of Agricentre at the year end, which brings eight new outlets and extends the group's presence into a major new geographic region," he added.

Greetham said farmgate prices remained a challenge for the industry, which the prices still below the realistic cost of production for many farmers.

"With the consequent impact on farm sentiment, it is prudent to take a more cautious view on trading for the year ahead," he said.

"However the longer term macroeconomic growth drivers for the sector remain compelling and we intend to continue to build on the solid foundations, developing Wynnstay's presence both organically and through further acquisitions."

Wynnstay Group proposed a final dividend of 7.4p per share, which would take the total dividends for the year to 11.1p - up from 10.2p in 2014.