Cheshire-based NWF Group plc, the business that delivers fuel, food and agricultural feeds across the UK, said its revenue for the half year ended November 30, 2023, was 12.7% lower at £472.9 million “primarily as a result of lower commodity prices in fuels and feeds.”

Statutory profit before tax was down 35.6% to £3.8 million.

Shares in the firm fell as much as 7%.

“Normalising market conditions in Fuels and Feeds resulted in lower margins and therefore lower profitability as expected,” said NWF.

“The Food business delivered a strong performance supporting the recently announced investment in the new Lymedale warehouse.”

An unchanged interim dividend per share of 1p has been approved.

On its “outlook and future prospects” the company said: “As the board expected, profitability in the first half was lower than in recent prior years, as pricing is normalising in Fuels and Feeds.

“In addition, the mild autumn weather impacted demand for both domestic heating oil and ruminant animal feed.

“In Fuels, demand for heating oil has increased as we moved into winter, albeit the weather has been comparatively mild to date.

“In Food, high demand has continued to be efficiently managed and we will continue to require overflow storage facilities until Lymedale capacity starts to become available in early autumn.

“In Feeds, margins and costs are being effectively managed as market volumes remain subdued and commodity prices stable.

“With the winter months to come, which are typically more material to the group’s performance, the board’s expectations for the full year are unchanged, with a more significant second half weighting than last year.

“However, as stated in the announcement of the Lymedale investment, the initial ramp-up costs are expected to impact headline PBT in the current financial year ending 31 May 2024 by approximately £1.7 million.

“The net impact in the financial year ending 31 May 2025 is expected to be zero, as ramp-up costs are offset by revenue, with a full run rate of profitability achieved during the financial year ending 31 May 2026.

“Our financial position is strong and we continue to focus on development opportunities, both organic and through targeted acquisitions, which underpin our continued confidence in NWF’s growth potential and future prospects.”

NWF Group CEO Chris Belsham said: “We have experienced a more challenging first half than in recent years, but our underlying expectations for the full year remain unchanged.

“Our performance in Food has been particularly positive and has in part offset the less supportive market conditions in Fuels and Feeds.

“Our recently announced investment in the new Lymedale warehouse highlights the growing customer demand in the Food business, increasing our capacity by 39%.

“We continue to focus on our long-term growth strategy of development by both organic investment and through targeted acquisitions, supported by our strong financial position and confidence in NWF’s potential and future prospects.”