REG - NWF Group PLC - Trading Update

NWFAnnouncement

13/12/2023 07:15

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RNS Number : 5491W  NWF Group PLC  13 December 2023

For release 7.00am Wednesday 13 December 2023

NWF Group plc

 

NWF Group plc: Trading Update

 

NWF Group plc ('NWF' the 'Company' or the 'Group'), the specialist distributor
today provides a trading update for the half year ended 30 November 2023 (the
"Period").

Trading update

The Board reports that Group's overall profitability for the first half was,
as expected, behind the prior year as conditions in the Fuels and Feeds
markets continue to normalise, following an extended period of volatile
underlying commodity prices which had contributed to elevated returns. The
Food business, in part offsetting the less supportive market conditions in
Feeds and Fuels, delivered a strong performance in the Period, with trading
ahead of the prior year and continued growth momentum providing opportunity
for further expansion.

 

Fuels:

 

Volumes in the Period were ahead of the prior year, but margins reflect the
expected normalisation from the abnormally elevated level experienced in the
prior year. This performance is aligned to the stable supply conditions,
competitive pricing of diesel and gas oil, and lower demand for heating oil
reflecting the mild autumn weather.

 

The price of Brent crude oil started the Period at $74 per barrel, peaked at
$97 per barrel and finished the Period at $82 per barrel as the business
enters its busier winter months. Having acquired Geoff Boorman Fuels in the
Period, which expanded the divisions coverage and customer base in the
South-East, the Board continues to consider acquisition opportunities for
Fuels in line with the stated strategy and supported by a robust financial
position.

 

Food:

 

The business traded strongly in the Period and ahead of the prior year.
Storage volumes reached a peak of just over 141,000 pallet spaces (capacity
135,000 pallet spaces) which required the business to continue utilising
overflow storage facilities efficiently, as planned. Outload and associated
backhaul activity were higher than the prior year reflecting the high storage
levels.

 

To support the continued high level of customer demand for its services and
drive further growth in the division, the Group is well advanced with plans to
establish a new warehouse, aimed at replicating the success of its Crewe
warehouse which was opened in 2020.

 

Feeds:

 

Volumes were behind the prior year, reflecting a reduction in the overall
market with high levels of forage available to farmers following warm and wet
weather throughout the summer and autumn. A lower milk price than the prior
year and reduced volatility in raw material prices has resulted in the
expected normalisation of margins following the significant outperformance in
the prior year.

 

Outlook

 

The results for the first half are anticipated to be in line with the Board's
expectations. With the winter months to come, which are typically more
material to the Group's performance, the Board's expectations(1) for the full
year are unchanged, with a more significant second half weighting than last
year.

 

NWF expects to announce its results for the half year ended 30 November 2023
in late January.

Chris Belsham, Chief Executive Designate of NWF Group said:

"It has been a more challenging first half than in recent years as market
pricing normalised following a lengthy period of beneficial volatile
conditions for Fuels and Feeds. In contrast, the strong performance of Food is
encouraging us to advance our plans for a third warehouse to meet the growing
customer demand for our first class services and drive further growth in the
division.

"With the winter months to come, which are more material to the Group's
performance, our expectations(1) for the full year are unchanged."

 

 

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

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

 

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

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

 

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