Expected decline in fuel prices hits NWF interims, but full year outlook unchanged
Nantwich-based food, feed and fuel distributor, NWF Group, felt the impact – albeit expected – of the fall in fuel prices as it revealed its half year figures for the period ending November 30, 2023, today.
Revenues fell 12.7% to £472.9m, while pre-tax profits declined by 35.6% to £3.8m.
Net debt improved by 52.3%, from £30m to £14.3m.
The board has approved an unchanged interim dividend per share of 1p, in line with its policy.
The group’s banking facilities of £61m are committed to May 2026, and NWF said it continues to operate with substantial headroom.
The Fuels division delivered a headline operating profit of £0.7m (H1 2022: £2.6m). Volumes were ahead of the prior year, driven by commercial demand, but offset by the expected normalising of margins from the abnormally elevated level experienced in the prior year, alongside lower demand for domestic heating oil.
In Food, the headline operating profit was £2.9m (H1 2022: £2.1m). It produced a strong performance with increased storage volumes and distribution activity from the continued high level of customer demand.
And Feeds saw a headline operating profit of £0.4m (H1 2022: £2.1m). Volumes were lower than the prior year, reflecting the reduction in the overall market. A lower milk price and reduced volatility in raw material prices compared with the prior year resulted in the expected normalising of margins.
The group said it has a strong financial position, with £13.3m in cash at the end of the half year, supporting the £8.5m investment in the fit out of the Lymedale warehouse as well as a pipeline of potential acquisition opportunities in Fuels.
NWF agreed a lease on the Lymedale warehouse earlier this month. The investment follows on from the success of its 240,000 sq ft Crewe warehouse, which opened in 2020.
It said the board’s full year trading expectations remain unchanged ahead of the seasonally more significant second half.
CEO designate, Chris Belsham, said: “We have experienced a more challenging first half than in recent years, but our underlying expectations for the full year remain unchanged.
“Our performance in Food has been particularly positive and has, in part, offset the less supportive market conditions in Fuels and Feeds.
“Our recently announced investment in the new Lymedale warehouse highlights the growing customer demand in the Food business, increasing our capacity by 39%.”
He added: “We continue to focus on our long term growth strategy of development by both organic investment and through targeted acquisitions, supported by our strong financial position and confidence in NWF’s potential and future prospects.”
