Record profits for Wynnstay Group

The Llansantffraid-based group said it reflected increased sector confidence due to stronger farmgate prices, greater clarity with the completion of the EU settlement and the enactment of the UK Agriculture Bill.

Half year revenue rose 8.9 per cent to £249.7 million with the profit before tax up 25 per cent to £5.36m.

Wynnstay, which raised its interim dividend by 8.7 per cent to 5p, reported strong feed sales and activity from Glasson Grain in the agriculture division compensating for expected weaker performance from arable operations due to last year’s poor harvest impacting grain trading and seed sales.

In its specialist agricultural merchanting division, demand for bagged feed was strong as well as for hardware sales as farmers returned to investing in their businesses

The agriculture division had revenue of £180.7m and the specialist agricultural merchanting division £68.8m.

The strong trading conditions support a good performance in the second half of the year with farmgate prices firm and the 2021 harvest on track to revert to more normal yield and tonnage.

Its board remains very confident about the group’s longer term prospects, supported by its strong financial position and growth initiatives that are in place.

Chief executive Gareth Davies said: “These record interim results reflect strong recovery in farmer confidence."

He said they also demonstrated the benefits of the group’s broad spread of activities in supplying both livestock and arable farmers.

“We made good strategic progress, extending our reach in the eastern side of England with two bolt-on acquisitions, completing a major hire for our reorganised senior management team, and creating a dedicated role in support of the group’s environmental, social and governance strategy.

“Prospects for the second half of the financial year are very encouraging, with farmgate prices firm and a good harvest expected. We will continue to invest in the business to increase the group’s manufacturing capacity and improve production efficiencies, and will look for further complementary acquisitions. With our strong balance sheet and good cash flows, we view the future with confidence," added Mr Davies.

Chairman Steve Ellwood, who took up his post in March, said: "These results also demonstrate the resilient nature of our balanced business model and the benefits of recent growth and efficiency initiatives. The breadth of the group’s activities, supplying products into both livestock and arable farming enterprises, and the natural hedging this establishes provides significant advantages. In addition, over the last 12 months, we have been focusing on increasing our exposure to those activities where demand is typically more consistent year-on-year."

The acquisitions in the period were of the agricultural division of the Armstrong Richardson Group, which supplies inputs to farmers in the North East of England, and the fertiliser manufacturing business and assets of HELM Great Britain, which serves South Yorkshire

"As we emerge from a period of a significant level of general economic uncertainty, we are confident that Wynnstay is well positioned in a sector that is emerging from a prolonged period of inertia created by Brexit uncertainties. We expect to make good progress with our investment plans and growth initiatives in the second half of the financial year," said Mr Ellwood.