21st Jan 2015 09:56
LONDON (Alliance News) - Wynnstay Group PLC Wednesday reported higher pretax profit for its last financial year, buoyed by the growth of its specialist rural retail business which more than offset weakness in its agricultural division, and said that while the UK agriculture sector looks challenging for the short-term, it's confident for the longer-term.
The company reported a pretax profit of GBP8.6 million for the year to October 31, up from GBP8.1 million a year earlier when it had booked GBP0.35 million of exceptional costs related to its acquisition of Carmarthen & Pumsaint Farmers. Revenue was almost static at GBP413.6 million, as growth in the specialist retail business offset a drop in agricultural.
It had GBP2.8 million of net cash at the end of the year, up from GBP2.5 million of net debt a year earlier, and said it will pay a final dividend of 6.80 pence, taking its total dividend to 10.20 pence, up from 9.30 pence a year earlier.
Operating profit in the agricultural division, which sells things like seeds, animal feeds and fertilisers to farmers and wholesalers, dropped to GBP3.8 million, from GBP4.9 million a year earlier, as revenue dropped to GBP308.7 million, from GBP323.0 million, and margins came under pressure. It said the unit had traded higher volumes, but it was hit by the drop in grain prices to 2008 levels and margins had come under pressure across its main product ranges.
Its specialist retail division, which includes the agriculturally-biased Wynnstay Stores, Just for Pets and Youngs Animal Feeds, reported an operating profit of GBP4.9 million, up from GBP4.4 million a year earlier, as revenue rose to GBP104.6 million, from GBP90.2 million. It said Carmarthen & Pumsaint Farmers had boosted revenue and had performed above its initial expectations.
"The trading backdrop was markedly different to the comparable period last year, with price deflation, falling output prices and a significant variation in weather conditions. However the broad business base has once again provided a buffer against the challenges arising from the varied trading conditions during the year," Chief Executive Ken Greetham said in a statement.
"The macro economic factors driving long term prospects for UK agriculture remain compelling despite the short term issues resulting from the decline in output prices, which has been particularly evident in the dairy sector. While there are only limited signs of a reversal for our farmer customers at this point, we expect global food and energy demand to return output prices to more realistic levels, bringing renewed vigour to the sector," he added.
Wynnstay Group shares were down 0.6% at 543.00 pence Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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