Record results reported for agricultural supplier Wynnstay Group

Wynnstay Group plc (AIM: WYN), the agricultural supplies group, has today reported record results for the year ended 31 October 2021, significantly ahead of initial market expectations.

Image credit: StateofIsrael on Flickr
(CC BY 2.0)

Strong farmgate prices and the lifting of uncertainties around Brexit and future financial support drove a strong trading backdrop and a return to farm investment, which Wynnstay benefitted from. The good 2021 harvest benefitted the Group's arable activities, and fertiliser-blending activities generated a windfall gain from the increase in selling prices towards the end of the financial year.

Underlying pre-tax profit increased by 37 percent to set a new high of £11.44m (2020: £8.37m) and revenues increased by 16 percent to £500.39m (2020: £431.40m), also a record high. Both these results were significantly ahead of initial market expectations.

Growth was seen in both the Agriculture Division and Specialist Agricultural Merchanting Division, benefitting from the significant improvement in the trading environment as well as improvements to productivity and efficiencies.

The total dividend for the year rose six percent to 15.5p, marking the eighteenth consecutive year of dividend increases.

Key points of the report are listed below:

Financial

• Record results, benefiting from: improved farmer sentiment post Brexit, strong farmgate prices and exceptional gains from fertiliser blending activities
• Revenue up 16 percent to £500.39m (2020: £431.40m), including significant commodity price inflation
• Underlying pre-tax profit up 37 percent to £11.44m (2020: £8.37m) /Reported pre-tax profit increased to £10.99m (2020: £6.98m after £1.2m of non-recurring items)
• Basic earnings per share up 60 percent to 44.40p (2020: 27.73p including non-recurring items)
• Net cash up 10 percent to £9.24m (31 October 2020: £8.42m)
• Net assets up eight percent to £105.72m/£5.25 per share (31 October 2020: £98.18m/£4.92 per share)
• Proposed final dividend of 10.50p (2020: 10.00p); total dividend up six percent to 15.50p (2020: 14.60p)
• Eighteenth consecutive year of dividend increases

Operational

• Agriculture Division – revenue up 19 percent to £358.96m (2020: £302.58m), operating profit contribution up 47 percent to £4.22m (2020: £2.88m) 

1. total feed volumes 6.5 percent ahead year-on-year. After higher production and distribution costs, operating profit was in line with prior year
2. arable activities benefited from a return to more normal harvest tonnages and yields and a good autumn 2021 planting season
3. outperformance from Glasson, benefiting from three-fold price increase across the market in fertiliser raw material prices in H2

• Specialist Agricultural Merchanting Division – revenue up 10 percent to £141.43m (2020: £128.81m) operating profit contribution up 24 percent to £7.15m (2020: £5.78m)

1. excellent performance reflected increased farmer confidence and return to farm investment
2. strong sales across all major product categories, including bagged feed and hardware

• Two bolt-on acquisitions, acquired in Q2 2021, have integrated well, added new customers, and expanded trading area
• New digital trading portal launched in H1; steady adoption from customers as expected
• Investment programmes to increase manufacturing and processing capacity progressed well
• Non-executive Board appointment and key senior management appointments made, including, Commercial Sales & Marketing Director, Group Engineering Manager and Environmental & Sustainability Manager

Outlook

• Trading in new financial year has started in line with expectations, and Group is well positioned to achieve its growth objectives for the year

Gareth Davies, Chief Executive of Wynnstay Group plc, comments, 'These record results reflect the significantly improved trading environment as well as our initiatives to drive growth, productivity and efficiency. Strong farmgate prices and the lifting of uncertainties around Brexit and future financial support have promoted a return to farm investment. Results also benefited from a strong second half across the Group, especially for our arable operations. The 2021 harvest was good, with tonnages and yields reverting to more normal levels, and our fertiliser blending activities generated a windfall gain in a highly disrupted marketplace.

'Trading in the new financial year has begun well, in line with our expectations. We have a clear growth plan with strategic investment programmes under way, and new opportunities. While there are challenges with rising costs, we are confident that Wynnstay is well-positioned to achieve its growth objectives for the year, and view prospects for continuing development very positively.'

For more information about Wynnstay Group visit the website, HERE. 

The Global Miller
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