Wynnstay to invest £1.2 million in new Shrewsbury warehouse

The Mid Wales-based company, which produces feed and seed for the farming industry and runs retail operations around the country, is hoping to increase production at its Harlescott operation once the work is complete.

It is currently awaiting planning permission.

The additional warehousing is expected to create two or three new jobs at Wynnstay's Shrewsbury site.

"It will be a big complex allowing us to increase productivity at the site, and that will be more people coming into the business as well," said chief executive Ken Greetham.

Wynnstay also said it was seeing signs of recovery in prices paid to farmers, and hopes that will lead to an increase in its own revenues this year.

The seed and feed company saw revenue and profits decline in the year to October 31, pointing to farm gate price deflation as one of the major causes.

The Llansantffraid-based group, which also has a large seed production operation on the edge of Shrewsbury, saw revenue drop by 2.44 per cent to £368.14 million in the year to October 31. Pre-tax profits were down 12 per cent at £7.29 million.

Finance director Paul Roberts said prices paid to farmers for their goods had fallen significantly since 2013, and the volume of produce sold last year would have been worth £90 million more had prices held up in the last three years.

Chief executive Ken Greetham said the results were "in line with market expectations" but that they reflect the tough trading environment faced by farmers.

"If farmers are not getting as much for their produce they don't invest so much, don't buy so many inputs, and are very price sensitive," he said. "That affects us to a certain extent."

He added: "There are early signs of recovery. What we have to be very aware of is milk prices dropped below the realistic price of production.

"Now as the price is beginning to increase the spot price has increases but contracts are taking longer to come through.

"Certainly the analysts who are the ones who give the indication of what is happening in the market would point to a stronger year this year, but from our point of view it's too early to call. The winter months are very important to us."

The agricultural division generated revenue of £249.74 million, which was affected by the downturn in the sector, particularly in dairy.

Its retail division, which has expanded on the back of the takeover of Agricentre in October 2015, achieved sales of £118.28 million.

Mr Greetham added that the company was continuing to invest despite the difficulties in the market, including in its new warehousing in Shrewsbury.