Record year for acquisition-hungry NWF
Cheshire-based agriculture company NWF Group posted record annual results today.
In the year to May 31, the group generated turnover of £611m, a 9.9% increase on last year’s £555.8m figure, while pre-tax profits soared 44.8% from £6.7m to £9.7m.
NWF said its performance benefited from “exceptional conditions” and said it is considering hitting the acqusition trail.
It achieved revenue growth in all three divisions of fuels, food and feed, reflecting increased activity and higher commodity prices, with an outstanding result from fuels.
It also enjoyed a lower level of debt as a result of strong cash conversion and continued working capital improvements, while the renewal of a five-year £65m funding facility with RBS will support future development.
The fuels division posted a headline operating profit of £6.9m, compared with £4.5m in 2017. It said this was an outstanding result from delivering excellent service during a long, cold winter from its 19 depots with an increase in volumes, especially heating oil sales, and pence per litre profit.
In food the headline operating profit of £700,00 compared with £3m previously. The division was successful in winning 20,000 pallets of new contracted business, but endured significant challenges in the on-take of new customers with warehouse reorganisation and recruitment of new staff.
Feeds made a headline operating profit of £3m (2017: £1.5m). The group said the results were in line with plan with returns increasing as a consequence of investment in the prior year and improved market conditions with more stable milk prices.
Chief executive Richard Whiting said: “NWF has delivered a record performance in exceptional conditions.
“The fuels division has benefited from providing high levels of service to customers across the country through a long, cold winter.
“Food has won contracts that underpin its future development and we have delivered the planned increase in returns in feeds as a result of the capital investment in the prior year and effective management of the business against a backdrop of more stable milk prices.
“The benefits of the record year have been converted into cash and the lower level of debt is supported by a renewed five year banking facility.
“We are proposing an increased dividend and continue to see opportunity for further strategic and operational progress.”
He added: “Trading in the current financial year to date has been in line with our expectations.”
Looking ahead, today’s statement said: “With regards to Brexit, the fundamentals of our markets are unchanged and we continue to monitor and plan contingencies with customers and suppliers.
“The group has established a solid platform for further development, has strong cash flows and flexible banking facilities to fund growth and a strong asset base that provides resilience.
“We will, therefore, continue to consider acquisition opportunities, building on our successful track record of acquiring and integrating businesses as well as investment in organic development.”
