First half results meet NWF Group’s expectations
NWF Group, the Cheshire food and fuel distributor, said half year revenues and profits declined, but described its interim performance as “solid”.
Revenues for the six months to November 30, were £309.4m, down 11.3% from £348.9m, while pre-tax profits declined by 16.7% from £2.4m to £2m.
Net debt rose by 26% to £42.2m.
The group has declared a 1p interim dividend, the same as last year. The group has a progressive dividend policy and has increased the annual dividend by approximately five per cent in each of the past five years.
Results are behind prior year, as anticipated, with the resilience of the group demonstrated by consistent trading, despite Brexit uncertainty and the ongoing challenge of COVID-19, NWF said.
All divisions fully operational in the current lockdown, with employees designated as key workers and there have been no significant change in demand levels.
The fuels division showed a headline operating profit of £1.9m (H1 2019: £1.4m), with positive trading across the network and increased underlying sales of gas oil offsetting lower underlying demand for heating oil and diesel, alongside a positive contribution from acquisitions.
In food, the headline operating profit was £500,000 (H1 2019: £1.4m). There was increased activity with the new Crewe warehouse fully operational and performing as planned. The group experienced significant demand volatility due to the COVID-19 lockdowns and Brexit creating inefficient working in the short term and a changed business mix with a lower proportion of high value foodservice volumes.
Feeds achieved a headline operating profit of £0.7m (H1 2019: £0.7m) with a stable performance from lower feed volumes offset by a focus on cost control and commodity purchasing in highly volatile commodity markets.
As revealed last November, the group became aware of unauthorised access to its IT systems and acted promptly to instigate its cyber response plan. It is satisfied the incident has been contained and additional security measures have been applied to all the group’s IT systems to provide further resilience.
No information material to the running of the business was irretrievably lost as a result of the incident and the one-off costs, net of recoveries under the group’s existing cyber insurance, are not expected to be material.
Chief executive, Richard Whiting, said: “We had a solid first half with trading in line with our expectations and those for the full year remain unchanged.
“This performance is a further demonstration of the resilience of the group, which, given the challenges of keeping our people safe, managing demand volatility and responding to a cyber incident, have demonstrated our teams’ strong capabilities.
“We remain confident in our growth potential and our strong financial position gives us the flexibility and capacity to continue to target development opportunities.”
