REG - NWF Group PLC - Acquisition of lease & Notice of Half Year Results

NWFAnnouncement

10/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240110:nRSJ1669Za&default-theme=true

RNS Number : 1669Z  NWF Group PLC  10 January 2024

For release 7.00am 10 January 2024

NWF Group plc

 

NWF Group plc: Acquisition of lease and Notice of Half Year Results

Third warehouse marks further significant expansion of Food division

NWF Group plc ('NWF' the 'Company' or the 'Group'), the specialist
distributor, is pleased to announce the signing of a lease (the "Lease")
between its subsidiary Boughey Distribution Limited ("Food"), Aver Property
General Partner Limited and Aver Property Nominee Limited for a 332,000ft(2)
warehouse at Lymedale Business Park in Newcastle-under-Lyme ('Lymedale' or the
'Warehouse').

The investment follows on from the success of the Group's Crewe 240,000ft(2)
warehouse, which opened in 2020, and is in line with the Group's strategy for
its Food business to target warehouse expansion backed by customer and
retailer demand. The Lease is for a period of 15 years with a tenant only
break clause after 12 years and will be supported by a parental guarantee from
the Group.

Highlights:

The newly constructed warehouse is conveniently located close to the M6 and
the Group's existing sites in Crewe and Wardle, allowing the business to
utilise its in-house expertise to bring the Warehouse into operation.

The capacity of the Food division will increase by 52,000 pallets to a total
of 187,000 pallets spaces, supporting strategic growth and ongoing demand from
its customers for ambient grocery consolidation and distribution. The Group's
capacity was 100,000 pallet spaces prior to the opening of the Crewe
warehouse.

The fit out of the Warehouse will commence immediately and the site is
expected to be fully operational by the early Autumn of this year, backed by
an active pipeline of customer demand supported by our high levels of service
and customer recommendations.

Financial guidance resulting from the additional warehouse:

·    In its first full financial year of operational activity, the year
ending 31 May 2026, Lymedale is expected to deliver additional annualised
operating profits of approximately £2.8 million. As a result of IFRS16
interest in respect of the Warehouse lease and associated additional leased
vehicles, this will result in incremental annualised headline PBT of
approximately £1.2 million in the financial year ending 31 May 2026
increasing to £2.5 million in the financial year ending 31 May 2035 as the
IFRS16 lease liability reduces.

·    The balance sheet position of the Group will increase by a
right-of-use asset of £26.5 million and an associated lease liability of
£25.2 million.

·     The initial capital expenditure will be approximately £8.5
million, which will be funded using the Group's current cash balance.

·      At this early stage in the project, 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 financial year
ending May 2026 as noted above.

·      Lymedale is expected to deliver an IRR of approximately 20%.

 

Chris Belsham, Chief Executive Designate of NWF Group said:

"We are delighted to start the new calendar year by announcing the signing of
the agreement to lease Lymedale. The addition of 52,000 pallet spaces in our
Food business allows us to meet the growing demand for our first-class
services and will drive further growth in line with our strategy for our Food
business. Once opened, we will have nearly doubled our capacity in Food over
the last five years and transformed the contribution of the business to the
Group's growth and profitability."

 

Announcement of Half Year Results

NWF Group plc will announce its half year results for the six months ended 30
November 2023 on Wednesday 31st January 2024.

 

There will be a webcast and conference call for analysts at 9.30am start on
the day of the results hosted by Chris Belsham, Chief Executive Designate, and
Katie Shortland, Chief Financial Officer. Please contact MHP for further
details at nwf@mhpgroup.com.

 

Information for investors, including analyst consensus forecasts, can be found
on the Group's website at www.nwf.co.uk.

Company compiled analyst consensus is for headline profit before tax of
£14.4m (FY 2023: £19.6m).

 

Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014),
as it forms part of domestic law by virtue of the European Union (Withdrawal)
Act 2018) ("MAR") prior to its release as part of this announcement and is
disclosed in accordance with the Company's obligations under Article 17 of
those Regulations.

 

 Richard Whiting, Chief Executive          Reg Hoare / Catherine Chapman  Mike Bell / Ed Allsopp
 Chris Belsham, Chief Executive Designate  / Christian Harte
 Katie Shortland, Chief Financial Officer

 NWF Group plc                             MHP                            Peel Hunt LLP
                                           nwf@mhpgroup.com               (Nominated Adviser and broker)
 Tel: 01829 260 260                        Tel: 020 3128 8100             Tel: 020 7418 8900

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQSSEEEUELSESF