Interim Results

AIM: WYN

Wynnstay Group Plc

("Wynnstay" or "the Group" or "the Company")

Agricultural supplies and services group

Interim Results for the six months ended 30 April 2025

Encouraging first half

Project Genesis firmly under way and Group on track for full year forecasts

KEY POINTS

1Adjusted operating profit excludes amortisation of acquired intangibles, share-based payment expenses, gains or losses on mark to market of derivatives and non-recurring items.

2Adjusted profit before taxation excludes amortisation of acquired intangibles, share-based payment expenses, gains or losses on mark to market of derivatives, non-recurring items and the share of tax incurred by joint ventures.

3 Adjusted earnings per share takes into account the tax effect of adjusting items.

4Net (debt) / cash excluding IFRS 16 leases.

Financial

· Profitability improved, reflecting management initiatives, effective margin management and early benefits from Project Genesis.

· Revenue decreased to £304.9m (2024: £328.5m) due to reduced feed and grain trading activity, and lower commodity prices.

· Gross profit up 7% to £42.0m (2024: £39.2m).

· Adjusted PBT up 41% to £5.4m (2024: £3.8m), reflecting cost discipline and better unit margins.

· Balance sheet remains strong, with net cash (pre-IFRS 16) of £10.3m (2024: £18.5m) at 30 April, which is typically the highest point in the Group's annual working capital requirement and hence the lowest point in the annual cash cycle.

· Increased interim dividend declared of 5.7p per share (2024: 5.6p), in line with progressive policy.

Operational

· Feed and Grain

o  Adjusted PBT up to £0.9m (2024: £0.4m); revenue lower at £160.5m (2024: £190.3m).

o  Manufactured feed volumes decreased by 6%, mainly reflecting lower poultry volumes.

o  Grain trading volumes down 13%, reflecting poor 2024 harvest (down 21%) and lower market prices.

o  Exit of Twyford Mill completed, delivering expected cost savings; its poultry feed production has been outsourced.

o  Unit margins improved through targeted pricing actions.

· Arable:

o  Adjusted PBT up to £1.4m (2024: £0.4m), revenue up to £71.4m (2024: £69.1m).

o  Fertiliser volumes up 6% and seed sales improved 5%, helped by favourable spring conditions.

o  Gross profit margin increased by 170 bps.

o  New fertiliser blending plant opened in Avonmouth, Bristol, extending Group's geographic footprint in the South West and improving efficiencies.

· Stores

o  Adjusted PBT up to £3.1m (2024: £3.0m); revenue up to £73.0m (2024: £69.0m).

o  Activity levels - footfall and transaction volumes - in line with prior period.

o  Proactive pricing actions partially offset inflationary pressures.

· Project Genesis launched and on track - a three-year programme to establish a more efficient operating model to drive higher margins, profits and cash generation and to support the wider growth plans. Significant management and operational changes made, as planned.

Outlook

· Farmgate prices remain firm across most sectors, supporting farmer sentiment despite ongoing uncertainties around governmental financial support mechanisms.

· Trading in H2 to date has been in line with management expectations and the Group remains on track to deliver a stronger full-year performance compared to FY24, in line with market expectations.

Alk Brand, Chief Executive Officer of Wynnstay Group Plc, commented:

"The Group has delivered a strong recovery in the first half, with the improved profitability reflecting the benefits of our operational initiatives. The new management team is now in place and is delivering improvements, supported by a clear plan and strong leadership focus. Project Genesis is progressing well and, together with ongoing investments, supports our ambitions to create a stronger, fitter business, which provides our customers with the highest service levels and our shareholders with improved returns. Current trading is encouraging, and the Group remains well-positioned to achieve market expectations for the full year."

Steve Ellwood, Chairman of Wynnstay Group Plc, commented:

"We now have a refreshed executive management team in place, which is focused on integration, execution, and driving shareholder returns. Project Genesis is firmly established and progressing well, and we expect to complete the development of our Group growth strategy in the second half. It will complement and build on the foundations already laid. The Group has a strong balance sheet and solid financial platform, and we are investing in initiatives that will benefit our customers and drive earnings per share and long-term value for shareholders."

Wynnstay will be hosting an online presentation of the Company's results on Wednesday, 9 July 2025 at 12.30 p.m.. Shareholders and potential investors wishing to join the event can register at https://bit.ly/WYN_FY24_results_webinar. Further information can be obtained from KTZ Communications.

OPERATING REVIEW

Overview

The Group's first half results show a significant improvement on the same period last year, with profitability recovering from last year's lows. All three segments, Feed and Grain, Arable, and Stores contributed higher levels of profitability.

One of the most important actions we took in the first half of the new financial year was the launch of Project Genesis. This is our Group-wide operational change programme, which is designed to create a more efficient operating model that will help to drive increased profitability and facilitate future growth plans. It is a three-year programme, so still at an early stage, but we are pleased to report a good start and initial benefits. 

The Group's improvement in profitability reflects decisive operational action taken to support efficiencies. This includes the decision to exit early the Twyford Mill poultry manufacturing site and move production to a third party.

Market conditions were generally more favourable than last year, with firmer farmgate prices in key sectors, including dairy, red meat and free-range eggs, and good weather conditions in the spring planting season, in sharp contrast to the prior year. These better conditions helped to support farmer sentiment despite the ongoing uncertainties around governmental policy. 

Cost inflation remained challenging and was most evident in labour, energy and logistics. We took mitigating action, including with pricing, which helped to partially offset the effects, and continued to manage costs tightly.

Financial Results

Group revenue for the period decreased by 7% to £304.9m (2024: £328.5m), reflecting lower manufactured poultry feed and traded grain volumes, and lower commodity prices.

Gross profit increased by 7% to £42.0m (2024: £39.2m), and adjusted operating profit rose by 41% to £5.2m (2024: £3.7m). This was the result of a sharper focus on margin management and operational efficiency.

Adjusted profit before taxation increased by 42% to £5.4m (2024: £3.8m), and adjusted earnings per share rose by 43% to 18.1p (2024: 12.6p). Statutory profit before tax increased to £5.5m (2024: £4.4m). This turnaround mainly reflected management actions across the business.

Balance Sheet and Cash Flow

The Group remains in a strong financial position. Net cash (excluding IFRS 16 lease liabilities) at the half-year end, which is typically the peak point in the Group's working capital requirements, and hence the lowest point in the annual cash cycle, was £10.3m (30 April 2024: £18.5m). The year-on-year reduction in cash reflects the working capital investment required to stock the new Avonmouth fertiliser facility and the timing of certain supplier payments around the half year. We expect the majority of this impact to unwind in the second half.

The Group has undrawn committed facilities in place, which provide significant financial liquidity, and the Board has a revised capital allocation framework to support long-term growth.

Capital Allocation

The Board is committed to maximising long-term shareholder returns through the disciplined deployment of capital. The Group's capital allocation framework is structured around four key principles:

· improving internal efficiency through simplifying the operating model;

· investing for organic growth where capacity is constrained or market opportunity exists;

· pursuing strategic, value-accretive acquisitions; and

· maintaining regular and progressive returns to shareholders.

Return on capital currently varies across the Group, reflecting differences in business performance, market conditions and historical investment. In the near term, our focus is on strengthening the operational platform through targeted investment and transformation. Our objective is to raise returns across all three segments and generate consistent, attractive Group-level returns over time.

Dividends

The Board is pleased to declare an increased interim dividend of 5.7p per share (2024: 5.6p). This is payable on 31 October 2025 to shareholders on the register at 26 September 2025. It is in line with our progressive dividend policy, supported by the Group's underlying cash generation, and reflects our confidence in prospects for the year.

Segmental Review

Feed and Grain

Wynnstay manufactures and supplies a wide range of feeds and animal nutrition products, principally for the dairy, beef, sheep and poultry sectors. The Group operates two feed mills and three blending plants, manufacturing feed that is offered in compounded, blended and meal forms, and sold both in bulk and in bags. Bagged feed is predominantly sold through the Group's store network. Wynnstay also sells a range of raw materials for feed through its Wynnstay and Glasson Grain brands. Farmers are offered grain and combinable crop marketing services through the GrainLink business.

Feed and Grain activities delivered an improved contribution, with adjusted profit before tax of £0.9m (2024: £0.4m), driven by management action to improve margins and reduce manufacturing costs. This was despite decreased revenue of £160.5m (2024: £190.3m), which reflected lower grain trading volumes and prices and lower overall feed volumes.

Manufactured feed volumes decreased by 6%, reflecting the expected loss of poultry volumes following the planned transition of supply associated with the closure of the Twyford Mill. Underlying volumes were flat in a market that grew by approximately 4% over the same period (source: Agriculture and Horticulture Development Board ("AHDB"), GB animal feed statistics). We completed the closure of Twyford Mill in January 2025, as planned. This has delivered a significant reduction in fixed overheads and, coupled with a greater focus on product margin, cost efficiency has been improved across the network. This has led to an improvement in unit margins. The sale of the moth-balled facility at Calne, to the acquiror referred to in the Annual Report, is now expected to complete in the autumn.

Grain trading volumes were 13% lower year-on-year. This largely reflected the reduced availability of combinable crops following the second lowest UK harvest on record (21% down, according to AHDB) as well as reduced grain prices, which also subdued grower selling activity. We expect grain trading levels to improve in line with volume recovery. Crop production in 2025 is expected to improve on the weak 2024 harvest, though the extent of the recovery remains to be seen. Our focus is on converting increased grain availability into higher sales through strong execution and customer engagement.

In the period, we restructured the commercial team and put in place measures to manage margin recovery. This helped to support overall profitability in the period, with the benefits continuing. Project Genesis will deliver further operational benefits, including removing production bottlenecks and enhancing capacity utilisation across our feed manufacturing sites.

Following the completion of our earlier investment programme at our feed plant in Carmarthen, we have now started a further phase of investment. This will increase Carmarthen's production capacity by over 20,000 tonnes and deliver attractive returns. We have also commissioned a new combined heat and power installation ("CHP") at our Llansantffraid plant, which is expected to generate strong returns. As well as improving efficiencies, these investments will help to support future growth.

Arable

The Group supplies a full range of high-quality, Wynnstay-branded agricultural fertiliser products (compound, straight, and blended), and the Glasson fertiliser blending operation is the UK's second largest. Our specialists offer farmers bespoke fertiliser programmes. These address specific soil conditions, thereby increasing the efficiency of the fertiliser and improving plant growth. The Group also supplies a wide range of seeds (spring, autumn, grass, maize, catch & forage, and environmental seeds), and operates a major seed processing facility in Shrewsbury, Shropshire.

Arable activities generated increased revenue of £71.4m (2024: £69.1m) and adjusted profit before tax showed a strong recovery at £1.4m (2024: £0.4m). 

Fertiliser volumes increased by 6%, and seed sales improved by 5%, both operations benefiting from the favourable planting conditions in the period, in contrast to last year.

Gross profit margin improved by 170bps, driven by disciplined commercial execution and strong pricing management.

We completed and opened our new fertiliser blending plant at Avonmouth, Bristol, on time and within budget, and the new facility is operating very well. Its commissioning was a key operational milestone and the new plant strengthens our fertiliser production capacity and improves our distribution network in the region.

Stores

Wynnstay operates a network of 51 stores catering mainly for the needs of farmers but also rural dwellers. Stores are mostly located within the livestock areas of England and Wales. The store network is supported by multiple routes to market, including a digital sales platform, sales trading desk, regional field sales teams and specialist catalogues.

Stores generated increased revenue of £73.0m (2024: £69.1m) and higher adjusted profit before tax of £3.1m (2024: £3.0m), a robust performance. Activity levels remained in line with the prior year, with footfall and transaction volumes stable.

Cost pressures in logistics, energy, and labour were managed as effectively as possible. We continued to act proactively on pricing and to focus on service levels, which has helped to support the Stores' performance.

Project Genesis

Project Genesis, our three-year transformation programme, progressed well in the period. The overall objectives of the programme are to deliver a more integrated and efficient operating model, improve margins, and create a strong platform for sustainable growth.

Each of our planned workstreams has been firmly established and are designed to deliver specific improvements to the business. To date, we have implemented a new divisional structure, simplified management layers, and invested selectively in process efficiency. Early benefits are coming through, and we remain confident of the programme's potential to materially enhance Group performance.

Our Group-wide asset review is progressing as planned. As part of this initiative, we are integrating the Youngs Animal Feeds business into our core animal feed operations, moving away from the stand-alone model. The associated non-recurring cash and non-cash items of this action, alongside other rationalisation initiatives under consideration, will be reflected in in the second half of the current financial year. The improvement in return on capital will come through fully in the next financial year.

Update on Health and Safety Executive ("HSE") Investigation

The HSE investigation that opened following a tragic fatality in January 2025 remains ongoing. As reported in the Group's 2024 Annual Report, we continue to assist all relevant authorities with their inquiries. We will provide a further update, as appropriate. Our deepest sympathies remain with the family, friends, and colleagues affected.

Outlook

Farmgate prices remain supportive across most sectors, underpinning farmer sentiment despite ongoing uncertainties around some governmental support schemes.

The Group is trading in line with full-year market expectations and should deliver a stronger overall performance for FY25 compared to FY24, as anticipated.

We remain committed to delivering enhanced shareholder value through focused execution, disciplined investment, and incremental improvement. The foundations we are laying down through Project Genesis will provide a solid base for both near-term improvement and longer-term growth. The Group remains in a strong financial position, with a robust balance sheet and good cash flows, which supports our positive view of prospects.

Alk Brand Rob Thomas

Chief Executive Officer Chief Financial Officer

WYNNSTAY GROUP PLC 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1Adjusted operating profit excludes amortisation of acquired intangibles, share-based payment expenses, gains or losses on mark to market of derivatives and non-recurring items.

2Adjusted profit before taxation excludes amortisation of acquired intangibles, share-based payment expenses, gains or losses on mark to market of derivatives, non-recurring items and the share of tax incurred by joint ventures.

WYNNSTAY GROUP PLC

CONSOLIDATED BALANCE SHEET

As at 30 April 2025

WYNNSTAY GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 30 April 2025

WYNNSTAY GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 April 2025

WYNNSTAY GROUP PLC

NOTES TO THE ACCOUNTS

GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES

Wynnstay Group Plc has a number of operations. They are described in note 4 segmental reporting.

Wynnstay Group Plc is a company incorporated and domiciled in the United Kingdom. The address of its registered office is shown in note 3.

1. BASIS OF PREPARATION

The Interim Report was approved by the Board of Directors on 1 July 2025.

The condensed financial statements for the six months to the 30 April 2025 have been prepared in accordance with International Accounting Standard (IAS) 34 and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority, except disclosure in note 3.

The financial information for the Group for the year ended 31 October 2024 set out above is an extract from the published financial statements for that year, which have been delivered to the Registrar of Companies. The auditor's report on those financial statements was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.

The information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The financial information for the six months ended 30 April 2025 and for the six months ended 30 April 2024 are unaudited. The consolidated financial statements are presented in sterling, which is also the Group's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.

The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 October 2024, which have been prepared inaccordance with UK adopted International Accounting Standards.

2. GOING CONCERN

The Directors have prepared the condensed consolidated interim financial statements on a going concern basis, having satisfied themselves that the Group has adequate resources to continue in operational existence for the foreseeable future from a review of internal budgets and forecasts and current banking facilities.

The Group has a sound financial base and forecasts that show profitable trading and sufficient cash flow and resources to meet the requirements of the business, including compliance with banking covenants and on-going liquidity. In assessing their view of the likely future financial performance of the Group, the Directors consider industry outlooks from a variety of sources, and various trading scenarios. This analysis showed that the Group is well placed to manage its business risks successfully.

In conclusion, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES

The condensed financial statements have been prepared under the historical cost convention other than shared-based payments, which are included at fair value and certain financial instruments which are explained in the annual consolidated financial statements for the year ended 31 October 2024.

The condensed consolidated interim financial statements for the six months to 30 April 2025 have been prepared on the basis of the accounting policies expected to be adopted for the year ending 31 October 2025. These are anticipated to be consistent with those set out in the Group's latest annual financial statements for the year ended 31 October 2024. A copy of these financial statements is available from the Company's Registered Office at Eagle House, Llansantffraid, Powys, SY22 6AQ.

The Board believe that Adjusted operating profit and Adjusted profit before taxation better reflect the adjusted commercial trends and performance of the Group and provides investors and other users of the accounts with useful information on these trends.

Adjusted operating profit is statutory operating profit after adding back non-recurring items, amortisation of acquired intangible assets, share-based payment expenses and unrecognised fair value derivative gains/(losses). Adjusted profit before taxation is statutory profit before taxation after adding back non-recurring items, amortisation of acquired intangible assets, share-based payment expenses, unrecognised fair value derivative gains/(losses) and the share of tax incurred by joint ventures.

Non-recurring items

Non-recurring items are items that the Board believes are material and one-off or non-operating in nature and are better disclosed separately in the income statement. Events which may give rise to non-recurring items include, but are not limited to, gains or losses on the disposal of subsidiaries/businesses, gains or losses on the disposal or revaluation of properties, gains or losses on the disposal of investments, the restructuring of the business, the integration of new businesses, acquisition related costs, changes to estimates in relation to deferred and contingent consideration for prior period business combinations and asset impairments including impairment of goodwill.

4. SEGMENTAL REPORTING

IFRS 8 requires operating segments to be identified on the basis of internal financial information about the components of the Group that are regularly reviewed by the chief operating decision maker ("CODM") to allocate resources to the segments and to assess their performance. The chief operating decision maker has been identified as the Board of Directors ("the Board"). The Board reviews the Group's internal reporting in order to assess performance and allocate resources. The Board has determined that the operating segments, based on these reports are Feed and Grain, Arable and Stores. 

Feed and Grain - Wynnstay manufactures and supplies a wide range of feeds and animal nutrition products for a range of sectors, including, dairy, beef, sheep, and poultry. The business operates three feed mills and three blending plants, and offers nutrition products in compounded, blended and meal forms, both in bulk and in bags. Bagged feed is predominantly sold through our stores. In addition, we sell a range of feed raw materials through both the Wynnstay and Glasson Grain brands, as well as offering grain and combinable crop marketing services through the GrainLink business.

Arable - Our arable operations supply a wide range of services and products to arable and grassland farmers. These include seeds, fertilisers and agrochemicals. Our fertiliser manufacturing business, Glasson Fertiliser, is the second largest fertiliser blender in the UK.

Stores - Wynnstay operates a network of 51 stores catering mainly for the needs of farmers but also rural dwellers. Stores are mostly located within the livestock areas of England and Wales. The network is supported by a multi-channel sales route to market, which includes a digital sales platform, a sales trading desk and specialist catalogues.

The Board assesses the performance of the operating segments based on a measure of profit before tax (Adjusted profit before tax). Other information provided to the Board is measured in a manner consistent with that in the financial statements.

5. OTHER OPERATING INCOME

6. AMORTISATION OF ACQUIRED INTANGIBLE ASSETS, SHARE-BASED PAYMENTS AND NON-RECURRING ITEMS

7. TAXATION

The tax charge for the six months periods ended 30 April 2025 and 30 April 2024 are based on the apportionment of the estimated tax charge for the respective full years.

The effective tax rate is 23.7% (6 months ended 30 April 2024: 25.3%).

8. CASH (USED IN) / GENERATED FROM OPERATIONS

Cash and cash equivalents

Cash and cash equivalents are all non-restricted balances and are all cash at bank and held with HSBC UK Bank Plc, except for £981,000 (2024: £Nil) which is held at International FC Stones for wheat futures hedging purposes. HSBC UK Bank Plc's credit rating per Moody's for long-term deposits is Aa3 (2024: Aa3). £940,000 of the cash and cash equivalent balances are denominated in foreign currencies, EUR (98%) and USD (2%) (2024: £2,690,000, in EUR (51%) and USD (49%)). All other amounts are denominated in GBP and are booked at fair value.

Borrowings

Bank loans and overdrafts are secured by an unlimited composite guarantee of all the trading entities within the Group. The outstanding bank loan of £Nil (2024: £5,691,000 has interest of 1.75% over the daily SONIA rate up to the point of repayment.

Loan stock is redeemable at par at the option of the Company or the holder. Interest of 5.0% (2024: 3.7%) per annum is payable to the holders.

9. LEASES

*Disclosures in the six-month period to 31 October 2024 have been restated to reflect certain fully depreciated property leases renewals. Upon renewal, the accumulated depreciation was reversed through reclassification to reinstate the right of use assets at an updated carrying amount, reflecting the renewed lease terms. Rather than disclosing as a reclassification, these renewals are better reflected in an addition to cost value and lease liabilities in the period.

10. NET CASH

11. FINANCIAL INSTRUMENTS

12. EARNINGS PER SHARE