Wynnstay sees profits dip after challenging year

The firm, which has operations in Llansantffraid and near Shrewsbury, saw underlying pre-tax profit fall from £9.6 million to £8 million for the year, while reported profit before tax fell by about £2 million to £7.5 million.

It said farmers tightened spending in response to weaker farmgate prices and political uncertainty.

The group saw revenue in the year to October 31, 2019, rise to £490.6 million from £462.6 million, but Wynnstay said this mainly reflected commodity price inflation.

In its agriculture division, revenue for the year was £358.6 million and operating profit was £2.9 million.

It said feed sales were impacted by the abnormally warm winter and lower volumes were in line with the sector. But it saw arable activities perform well, including grain trading.

In its specialist agricultural merchanting division, revenue was £131.8 million and operating profit was £5.2 million.

Acquisitions

Like-for-like sales were 3.5 per cent down, mainly reflecting reduced demand for bagged feed and feed-related products.

But total sales were up, with the group benefitting from first full year contributions from acquisitions, including Countrywide depots.

Despite challenges in the agricultural market, the group hailed its strong balance sheet and said it was well-placed to navigate these as well as seize opportunities.

Gareth Davies, chief executive of Wynnstay, said: "This has been a difficult year for the agricultural market as a whole, and Wynnstay's results reflect this.

"Weather conditions reduced demand for some of our core products, particularly feed, while reduced farmgate prices and ongoing political uncertainty lowered farmer confidence and spending across the sector.

"As we look across the new financial year, we expect another challenging period. Nonetheless, we are well-placed to navigate through, and see opportunities to potentially strengthen our position within the agricultural supply chain sector, supported by our strong balance sheet."