Shares of Chesire-based NWF Group plc, the agricultural business that delivers fuel, food and feed across the UK, rose about 4% on Tuesday after it announced a strong trading update for the half year ended November 30, 2021, and gave details on its proposed chair succession process.
NWF said it expects to report underlying results for the first half “which will be significantly ahead of the prior year.”
NWF said its current non-executive chair Philip Acton will be stepping down from the board at the AGM in September 2022, having completed nine years’ service with NWF.
David Downie, currently senior independent non-executive director, will be appointed chair at that time.
On trading, NWF said: “The board is pleased to report that trading in the latter part of the period remained strong, with underlying trends in the group’s markets being consistent through the half.
“As a result, NWF expects to report underlying results for the first half which will be significantly ahead of the prior year, demonstrating a return on recent investments and the continued resilience of the group.
“This strong first half performance provides a solid platform for the business entering the seasonally important third quarter and consequently the board remains confident of delivering its full year expectations.”
On fuels, NWF reported a “strong performance, which was ahead of expectations and the prior year comparative period.”
The fuels division saw a short-term benefit “arising from increased demand related to the fuel shortages in the Autumn, with the group maintaining continuity of supply at all depots across the country.”
NWF said it experienced no supply shortages during this period and has a full complement of drivers to meet demand.
The firm said it continues “to appraise earnings enhancing acquisition opportunities in line with the strategy of consolidating a fragmented UK fuels market.”
NWF said its food business performed “well ahead of the prior year, as the business benefitted from its enlarged capacity, experiencing strong demand through the period, as well as enhanced efficiency with stock in optimum locations.”
It said there remains “some near term volatility in market conditions, as customers experience difficulties in manufacturing and importing ambient groceries and supermarkets have increased stock levels as a consequence of concerns around driver availability and supply chain issues.”
On feeds, NWF reported a “disappointing performance, behind prior year as a result of lower volumes, significant commodity price and cost inflation and the challenges of passing this though to customers in the short term.”
It said that in the latter part of the period “price increases were implemented to cover the inflationary pressures and there has been an element of volume recovery, albeit still lower than prior year.”
NWF CEO Richard Whiting said: “We have delivered a very strong first half performance, despite volatile market demand and significant inflationary pressures.
“The group has been able to retain labour and drivers, ensuring we have continued to service our customers’ needs.
“Both fuels and food have delivered significant year on year growth in the first half, more than offsetting a weaker feeds result and we enter our seasonally busier second half with good momentum.
“We continue to focus on the long-term growth of the group, with a clear strategy which is supported by a very strong financial position.”