21st Mar 2019 08:50
LONDON (Alliance News) - Agricultural supplier Wynnstay Group PLC warned Thursday a significant weakening of the market means both interim and full year results are likely to come in behind a year before.
Shares were down 22% on Thursday in early trade, at a price of 331.25 pence apiece.
In its financial year ended October 2018, Wynnstay posted "record" results, it said, while the start to its current financial year was "encouraging".
However, market conditions have now severely deteriorated, mainly due to a warmer-than-usual winter which reduced the requirement for feed and other weather-related products.
The annual comparison will not be helped by the winter of 2017 to 2018 being exceptionally cold and long, lifting demand that year, while Brexit has also undermined the confidence of farmers this year.
"The impact has been felt across both the group's divisions. Results for the first six months of the financial year are therefore expected to be substantially behind those of last year," said Wynnstay.
"Given these prevailing uncertainties, management currently believes it prudent to anticipate the full year outturn is likely to be substantially below current market expectations."
In recent weeks, demand for arable products has improved, Wynnstay did say, with spring cereal seed margins to be higher year-on-year for its first half, though volumes will fall. Grain volumes will improve, but margin pressure remains.
Wynnstay is booking extra costs related to Brexit, mainly involving the import of specialist materials to ensure supply can continue.
"The board believes despite current trading conditions, Wynnstay remains well placed to capitalise on opportunities in the agricultural sector and that prospects over the longer term are positive as agriculture adjusts to the changing economic landscape," said Wynnstay.
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