NWF revenue up to £611m as fuels and feeds prosper

Chesire-based NWF Group plc, the agricultural and distribution business that delivers feed, food and fuel across the UK, said on Tuesday its revenue rose 9.9% to £611 million for the year to May 31, 2018.

Statutory profit before tax soared 44.8% to £9.7 million and total dividend per share rose 5% to 6.3p.

The year included the renewal of a five year £65 million funding facility with RBS to support future development for NWF Group.

NWF said its fuels division made headline operating profit of £6.9 million, up from £4.5 million, “from delivering excellent service during a long, cold winter from our 19 depots with an increase in volumes, especially heating oil sales, and pence per litre profit.”

The group’s feeds business doubled its headline operating profit to £3 million “with returns increasing as a consequence of investment in the prior year and improved market conditions with more stable milk prices.”

However, the food business of NWF saw its headline operating profit fall to £0.7 million from £3 million amid “significant challenges in the on-take of new customers with warehouse reorganisation and recruitment of new staff.”

NWF Group CEO Richard Whiting said: “NWF has delivered a record performance in exceptional conditions.

“The Fuels division has benefited from providing high levels of service to customers across the country through a long, cold winter.

“Food has won contracts that underpin its future development and we have delivered the planned increase in returns in Feeds as a result of the capital investment in the prior year and effective management of the business against a backdrop of more stable milk prices.

“The benefits of the record year have been converted into cash and the lower level of debt is supported by a renewed five year banking facility.

“We are proposing an increased dividend and continue to see opportunity for further strategic and operational progress.

“Trading in the current financial year to date has been in line with our expectations.

In its outlook, NWF Group said: “In Fuels, we have a proven depot operating model and have demonstrated that the business can deliver an outstanding performance when service is at a premium.

“Volumes remain stable for the time of year. Richard Huxley is leading the business in its next stage of development.

In Food, we are focused on improving efficiency working with our new customers and improving the effectiveness of the additional members of staff recently recruited.

“We remain focused on continuing to provide excellent levels of service and value to our customers and supermarkets across the UK.

In Feeds, current margins and volumes are in line with our expectations for this time of the year.

“Our mills in the North, Cheshire and the South West are aligned to the needs of our farming customers in these key areas of the country.

With regards to Brexit, the fundamentals of our markets are unchanged and we continue to monitor and plan contingencies with customers and suppliers.

The group has established a solid platform for further development, has strong cash flows and flexible banking facilities to fund growth and a strong asset base that provides resilience. 

“We will therefore continue to consider acquisition opportunities, building on our successful track record of acquiring and integrating businesses as well as investment in organic development.

Performance to date in the current financial year has been in line with the board’s expectations, which assume a return to more normal trading conditions in Fuels.

“Overall, the board continues to remain confident about the group’s future prospects.”