Positive first half, despite fall in NWF revenues and pre-tax profits
Nantwich-based food, feed and fuel distributor, NWF Group, said it has achieved a “positive first half” despite revenues and pre-tax profits falling.
The group is also conducting an investigation over a conflict of interests which has so far cost it £600,000 in exceptional fees.
NWF published figures for the six months to November 30, 2024, today, which revealed turnover of £454.3m, down from £472.9m in 2023, and pre-tax profits of £2.1m, 44.7% down from the previous year’s £3.8m.
Net debt more than doubled from £14.3m to £39.1m – due to the addition of the £22m lease liability of the group’s new Lymedale warehouse onto the balance sheet rather than a change in bank debt – while net cash fell slightly from £13.3m the previous year to £11.4m.
In the Food division headline operating profit was £2.5m, down from £2.9m. The group said performance lagged the prior year reflecting the start-up costs of its new warehouse operation in Staffordshire.
Fuels achieved a headline operating profit of £1.7m, up from £700,000 a year ago, driven by improved margins and a lower cost base.
Feeds improved its headline operating profit from £400,000 the previous year to £800,000.
CEO, Chris Belsham, said: “The group has delivered a positive first half and we are trading in line with our expectations for the year as a whole.
“We are pleased with the improved performance in both Fuels and Feeds which has offset the short term weaker performance in Food as we continued the stock build in the Lymedale warehouse.
“Our pipeline of target acquisitions in Fuels is strong as we continue to consolidate the fragmented fuels distribution market.”
He added: “We have also continued to progress our key performance initiatives, aimed at enhancing our commercial approach and operational efficiency across the group.”
Ahead of the seasonally more significant second half he said: “Supported by our strong financial position, our outlook is unchanged and we remain confident in NWF’s growth potential and prospects.”
The group also revealed that during the period it uncovered a conflict of interest in relation to a commercial arrangement, which has since been terminated, for the provision of transport services including drivers.
It said the individuals linked to the commercial arrangement are no longer employed by the business. There is also additional complexity as to the payroll (IR35) tax treatment in relation to those services, it added.
The board appointed an independent accountancy firm to investigate this matter, with the costs of the work to date being reported within exceptional costs incurred in the period.
The investigation is ongoing and NWF will update shareholders further in its full year results in August 2025, but at this stage the group does not expect this to have a material impact on its headline performance in the year.
