Wynnstay expectations hit by trading challenges but optimism remains longer term

The Llansantffraid-based agricultural supplies and specialist merchanting group said in a trading update for the financial year ending October 31, that the trading environment in the second half of the financial year was more difficult than the first, with lower

farm-gate prices adversely affecting farmer spending patterns.

It said, in addition, the seasonally critical final quarter has been impacted by abnormally wet weather.

The update added: "The Agriculture Division suffered from disruption to post-harvest farming activities caused by the heavy rains, which resulted in lower sales of winter seed products, particularly in October.

"It also saw reduced demand for feed and fertiliser, reflecting both good on-farm grass growth and weaker farm-gate prices, especially for milk.

"As anticipated at interims, the Specialist Merchanting Division faced inflationary pressures and saw lower volumes of bagged feed sales and hardware products. By contrast, the Group’s grain marketing business, GrainLink, which is accounted for within the Agriculture Division, delivered a record performance. Its strong results reflected both the good-sized harvest and higher market penetration.

"The three Joint Ventures businesses recorded another strong total contribution, which is expected to be slightly ahead of the prior financial year."

The business said, with uncertainty over milk and other farm-gate prices, farmer sentiment is likely to remain cautious in the short-term.

However, the update said: "With a strong market position and balanced business model, the Board still anticipates that the next financial year will show an improvement over FY23.

"The Group expects to announce its results for the year ended 31 October 2023 towards the end of January 2024 and will provide a further update on current trading at that time."