29th Jun 2016 09:33
LONDON (Alliance News) - Agricultural products company Wynnstay Group PLC on Wednesday said pretax profit and revenue were pulled lower by a poor trading environment in the first half of its financial year, but it pushed up its dividend on confidence the market cycle will turn.
Wynnstay said it made a pretax profit of GBP4.1 million in the six months to the end of April, down from GBP4.8 million a year earlier, as revenue declined to GBP193.2 million from GBP200.6 million.
Wynnstay said the results were in line with its expectations and reflected a poor trading environment, with prices for farmers products remaining low for the second year in a row.
The company's agricultural division was hit by lower demand for dairy-related feed products, though arable product sales grew year-on-year following a slow start. The specialist retail unit, meanwhile, was affected by wider sector conditions, through general trading at Wynnstay Stores was "encouraging" generally, the company said.
Wynnstay said it will pay an interim dividend of 4.00 pence, up 8.1% from the 3.70p paid a year earlier, in line with its progressive dividend policy and reflecting confidence the downturn in agricultural markets will be cyclical.
Despite challenges in the short term, Wynnstay said it is well-placed to achieve its targets for the year to the end of October.
"While the macroeconomics of the market suggest a return to more acceptable pricing, which will bring renewed vigour to the sector, the recovery in output prices for farmers is difficult to predict. Notwithstanding this and the emerging implications of the EU referendum result, we believe that Wynnstay remains positioned to achieve its targets for the financial year and continue to view long term prospects positively," said Chief Executive Ken Greetham.
Wynnstay shares were down 3.3% to 382.00 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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