City round-up: NWF Group; James Halstead; Altitude Group

NWF Group, the Nantwich-based food, fuel and feed business, issued a trading update for the year ending May 31, 2022, today, saying it expects full year results to be “significantly ahead” of its revised expectations.

This follows its positive trading update released on March 8, 2022, which contained the board’s expression of increased expectations for its full year results.

However, since then, NWF said it has continued to outperform, which has been led by the fuels business as a result of the “exceptional circumstances” with the very significant short-term volatility in oil prices and a constrained UK fuel market.

In the March update the group said that the impact of Russia’s invasion of Ukraine has been most significant in fuels, with the price of Brent Crude over $120 per barrel and market volatility which led to elevated levels of demand.

It added that that there had been no major supply issues and the group had continued to meet demand across the country.

Following today’s announcement, Panmure Gordon analyst Adrian Kearsey said: “NWF continues to enjoy stronger than expected momentum. In a second unscheduled trading update this month, management has confirmed that the fuel division continues to outperform and ‘the board now anticipates full year results will be significantly ahead of the revised expectations’. As a consequence, we are raising our FY22 PBT estimate from £12.5m to £16.5m (+32% upgrade).

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Mark Halstead CEO of James Halstead

Bury-based floorings group, James Halstead, said it has delivered a “solid performance” for the half year, to December 31, 2021, against a volatile background.

Revenues rose from £130.45m in 2020 to £136.7m this time round, although the pre-tax profit of £25.4m was down from £26m the previous year.

However, the board is recommending an interim dividend of 2.25p per share, up from 2.125p last year. The group had cash of £69.4m at December 31, 2021.

Chief executive Mark Halstead, said: “I, and the board, believe we have delivered a solid performance given the continued tumult that has challenged our businesses, compounded by inflationary pressures not seen in a generation. These challenges continue and we are fully focused on the balance of the financial year armed with our collective experience and committed workforces as major assets.”

The company said it no longer trades with Russia.

Updating the market on trading in the second half of the year, chairman, Anthony Wild, said the group has made several key product launches that have been well received, and that increased prices in the first half do not seem to have affected demand. He said, in key markets, and “most emphatically” in February and March, sales have increased.

“Given that December itself was at a record level, we can be reasonably confident that stock bought by distributors in advance of an increase in prices in January 2022 has been sold onwards.”

However, he added: “As a manufacturer we are experiencing levels of inflation not seen in a generation. The passing on of costs is a necessary consequence and whilst we do not know yet we are mindful that demand may be affected. The probable increases in interest rates through the coming months may exacerbate the issue. To date they have not.”

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Nichole Stella

Altitude Group, the Manchester-based operator of a leading marketplace for the global promotional products industry, said it is experiencing accelerated recovery post-COVID and continues to successfully navigate the current business climate, in a trading update for the year to March 31, 2022, today.

The AIM-listed group said it has increased its core business revenue, replacing the £1.9m FY2021 of one-off Personal Protective Equipment sales. With strong trading in FY2022, and key financial metrics tracking ahead of last year, the group expects to report FY2022 revenue of circa £12.0m (FY2021:£7.7m) and adjusted operating profit of approximately £1.0m (FY2021: £0.6m), representing increases of around 56% and 80%, respectively.

At March 31, 2022, the group is expecting to report net cash of at least £1m.

Altitude also announced it has secured a new working capital credit facility with TD Bank NA, with an initial 12 month revolving facility of $700,000. The facility has no significant financial covenants and is secured by the assets of the US group with a parental guarantee from Altitude.

Chief executive, Nichole Stella, said: “We have emerged in the post-pandemic era with positive momentum. Throughout this difficult period we have shown consistent and organic revenue growth and we have not needed to raise any forms of finance, neither equity or debt.

“It is testament to the resilience and hard work of our team, our strong supplier relationships and our market-leading customer proposition, that we are able to report such a positive statement. As such, we are focused on our strategy to scale the business and are well placed for accelerated future growth.”