NWF buys Sweetfuels, reports strong first half

Chesire-based NWF Group plc, the business that delivers fuel, food and agricultural feeds across the UK, on Thursday published a strong trading update for the six months ended November 30, 2022, and announced the £10 million acquisition of Oxfordshire-based Sweetfuels Limited.

“Sweetfuels is a 20 million litre fuel distributor based in Faringdon, Oxfordshire, supplying fuel to predominantly domestic customers across the Cotswolds,” said NWF.

“The acquisition further expands and infills NWF’s geographic coverage of its Fuels business within the UK and is aligned to the group’s development strategy of consolidating the highly fragmented fuels market whilst expanding its existing geographical footprint.

“The acquisition is expected to be immediately earnings enhancing to the group.

The group will implement its proven post-acquisition integration plan, retaining the local brand and customer facing parts of the business whilst centralising suppport services.

“In the 12 months to 31 August 2021, Sweetfuels generated EBITDA of £1.3 million, profit before tax of £1.2 million and had net assets of £2.8 million.

The total consideration is £14.3 million which includes £4.3 million of adjustments for surplus cash and normalised working capital.

“The net consideration is therefore £10.0 million which will be funded from the group’s existing financial resources.

“The group reported net cash of £9.0m (excluding IFRS16 lease liabilities) as at its financial year ended 31 May 2022, together with substantial bank facilities to fund investment in its development opportunities.”

In its trading update, NWF said: “The board is pleased to report that trading in the first half has been strong.

“The group’s overall results for the period were ahead of the prior year, with all three divisions trading ahead of the board’s expectations …

“The group has made a strong start to the current financial year, with the seasonally more material winter months to come.

“As such the board’s full year expectations are unchanged at this stage, save for the anticipated contribution from the Sweetfuels acquisition …

The first half has built on the strong performance in the prior year and we continue to have confidence in the group’s prospects.

“We also continue to target strategic development opportunities supported by our strong balance sheet and banking facilities.”

NWF CEO Richard Whiting said: “We are delighted with our performance in the first half and to announce the acquisition of Sweetfuels which adds a 26th depot to our UK footprint in an attractive new geography for NWF.

“We have a strong platform for continued growth as we leverage the benefits from the further expansion of our growing network.

“The industry remains highly fragmented, with many small operators, which provides us with further opportunities to consolidate the market and increase our market share.

“Our pipeline of acquisition prospects remains healthy and this remains a focus for our development activity.”