Warm summer and rising commodity prices dent NWF profits
Half-year profits at Cheshire-based agriculture group NWF have been hit by a weak first quarter performance due to a warm summer and a rapid rise in commodity prices.
In the period to November 30 the Nantwich-headquartered company’s pre-tax profits fell 23.1% to £2m year-on-year and operating profit dipped 21.4% to £2.2m.
Revenue grew by 13.9% across its feed, food and fuels divisions to £255.9m, reflecting the contributions of its acquired companies, higher activity levels and increased commodity prices in feeds and fuels.
New Breed and Jim Peet Agriculture in the feeds division and Staffordshire Fuels in its fuels division are all recent acquisitions.
The company said a £10m investment in acquisitions and the development and expansion of the feed mill structure at a site in Scotland and at its plant in Wardley in Cheshire was being delivered successfully.
Fully diluted earnings per share fell 23.3% from 4.3p to 3.3p.
The company has also announced an interim dividend of 1p, as it did in the corresponding period in 2016.
Chief executive Richard Whiting told TheBusiness Desk said: “The key thing is that H1 is the smaller part of the year. We make most of our profit in the winter.
“The positive thing is that revenue is up which shows increased activity and bodes well for our headline profit.”
“NWF has delivered growth across all three divisions in the first half of the year despite difficult market conditions.
“The group’s investment in the expansion and development of new mill capacity in the North and Cheshire has proceeded as planned and net debt (£19.1m, a rise of 83.7%) is in line with expectations. Current trading is in line with the board’s full-year expectations.”
Meanwhile, Chris Belsham has been appointed as the listed company’s group finance director and will join the board in June.
After 10 years’ service as chairman, Mark Hudson says he will step down at the company’s annual meeting in September. Phil Acton, currently non-executive chairman of the remuneration committee will become new chairman.
