29th Sep 2005 11:57
Wynnstay Group PLC29 September 2005 Wynnstay Group Plc Establishment of Joint Feed Distribution Company and Trading Update Wynnstay Group Plc ("Wynnstay"), the agricultural supply and rural retailbusiness is pleased to announce that it has entered into a joint venture withtwo other animal feed producers to establish a joint distribution and salescompany for the efficient supply of animal feeds in Wales and the borders. This new company, which will trade as Bibby Agriculture Ltd, has acquired thetrade previously carried out by W & J Pye Ltd in this area prior to thatbusiness going into administration. Bibby Agriculture Ltd is owned 50% by Carrs Billington Agriculture Ltd (a jointventure between Carr's Milling Industries Plc & Edward Billington & Sons Ltd);25% by Wynnstay; and 25% by Welsh Feed Producers Ltd, a company in whichWynnstay has a 50% shareholding. The new company will maximise the sales opportunities in the area whileconsolidating production facilities and achieving economies of scale in the keyarea of distribution. Each of the parties will provide production facilitiesfrom their respective mills, Stone Mill (Carrs Billington), Llansantffraid Mill(Wynnstay) and Carmarthen Mill (Welsh Feed Producers). The Shrewsbury factory,previously operated by W & J Pye Ltd, will cease production at the end ofSeptember. Whilst the initial equity investment made by Wynnstay is only £15,000, eachparty has subscribed a further £580,000 for Redeemable Preference Shares in thenew company to finance the business. This is an important strategic move for Wynnstay in that it will help to reducethe oversupply of animal feed that continues to affect the industry, assist ineconomic fleet management and enable the company to manage the supply of feed ina more efficient manner. Wynnstay will handle distribution for the new venture,operating an increased fleet of vehicles. The additional feed volumes available to Wynnstay's production and distributionactivities introduced by this initiative will require a reorganisation in thesefunctions and to recognise the potential costs associated with these changes,the Company will be taking a provision of £250,000 in the current financial yearending 31st October 2005. Bernard Harris, Managing Director of Wynnstay said today "This is an excellentoutcome for us and for the other parties to the joint company. At Wynnstay weare pleased to have played a pivotal role in the strategic restructuring of theUK animal feed supply industry. The new grouping will manufacture and distributesome 420,000 tonnes of compound and blended feeds annually." Current Trading The Board of Wynnstay is confident that despite recent cost rises in fuel andelectricity, the Company will achieve market expectations for the currentfinancial year before taking into account the provision for reorganisationassociated with the Bibby Agriculture joint venture. Press enquiries: Wynnstay Group plc Bernard Harris, Managing Director T: 01691 828512 Paul Roberts, Finance Director Biddicks Zoe Biddick T: 020 7448 1000 WH Ireland Limited David Youngman T: 0161 832 6644 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
WynnstayCarrs Group