NWF hoping for ‘normal winter’ after profits fall
DISTRIBUTION group NWF confirmed a sharp fall in annual earnings as a result of a triple whammy affecting demand in its fuel business.
The Cheshire-based group – which also stores and disrributes foods for supermarkets and suppliers such as Princes – and makes and supplies feed to farmers, said profits in the year to the end of May fell 33% to £5.1m (£7.6m in 2011) on record revenue of £540.2m, up 16.5%.
Having flagged-up the challenges faced by the fuels business to the City in June, NWF said the results were in line with expectations.
The fall in profits was caused by three key external factors – the extremely mild winter, surging oil prices and the weak economic backdrop -which all dented customer demand for oil to heat their homes and businesses.
Chief executive Richard Whiting said: “We are where we said we would be in both feed and foods, but obviously the fuels result has affected the profit number.
“We have streamlined that business and made sure we have the right team in place, and are confident that with more normal winter conditions we will be moving in the right direction again.”
He said careful cash and debtor management had enabled to cut debt to £15.5m, some £5m less than analysts had predicted.
In the Feeds business operating profit fell from £4m to £2m due to continued volatility of commodity prices and high feed prices.
In Food operating profits rose 33% to £3m as a result of more efficient operations, better management of overflow warehousing last autumn and cost reduction activity following the exit of a customer in the second half.
The Fuels business made an operating profit of £600,000, compared with £3.3m in 2011.
Chairman Mark Hudson said: “Progress in the new financial year has been in line with the board’s expectations with all divisions performing as planned.
“Whilst the overall economic outlook remains uncertain the markets for the Group’s products and services remain resilient and robust. We continue to build the three divisions in the group and review development opportunities.”
Despite the fall in profits NWF pegged its dividend at 4.5p per share.
