REG - NWF Group PLC - Trading Update

NWFAnnouncement

12/12/2024 07:00

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RNS Number : 7516P  NWF Group PLC  12 December 2024

For release 7.00am 12 December 2024

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 2024 (the
"Period").

Trading update

Overall, the Group traded in line with Board expectations in the Period,
delivering encouraging year-on-year growth in headline operating profit. As
expected, headline profit before tax was lower than the prior year, reflecting
the increased IFRS16 interest arising from the acquisition and fit out of the
Lymedale warehouse. Cash generation focus remained strong in the Period and
the Group retains a robust financial position with net cash as at 30 November
2024.

 

In Fuels, volumes were in line with the prior year, but with improved margins
and the benefit of a lower cost base following continued strong cost
management taken early in the Period. The initiatives to improve both
commercial and domestic sales models and optimise fleet efficiency are
progressing well.

 

There has continued to be stable supply and low volatility in the oil price in
the Period. The price of Brent crude oil started at $81 per barrel, peaked at
$87 per barrel, and finished the Period at $73 per barrel as the business
enters its busier winter months.

 

The Board is actively pursuing several acquisition opportunities for Fuels in
line with its stated strategy and supported by a strong financial position.

 

In Food, the business has increased stock levels as the Lymedale warehouse was
filled, with total storage volumes reaching a peak of just under 167,000
pallets (141,000 pallets in the comparative period). Headline operating profit
contribution in the Period was behind the prior year, reflecting a number of
factors including lower throughput related to specific customers, a slightly
slower build-up of additional customer stock and higher than anticipated costs
of moving stock from offsite storage into Lymedale. The business continues to
progress its customer pipeline which is delivering additional volume.

 

In Feeds volumes were ahead of the prior year, reflecting an increase in the
overall market following the wet summer and autumn and an increasing milk
price supporting feed demand. The milk price has steadily increased since
September whilst feed commodity prices have been stable.

 

Outlook

 

The Group delivered a solid first half performance, 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.

 

NWF expects to announce its results for the half year ended 30 November 2024
in late January.

Chris Belsham, Chief Executive of NWF Group said:

"We had a good first half and are trading in line with our expectations, with
improved performance in Fuels and Feeds offsetting the short-term weaker
performance in Food. During the period, we continued to progress our key
performance initiatives, aimed at enhancing our commercial approach and
operational efficiency, and remain active in our pursuit of Fuels acquisitions
in line with our strategy. Supported by a very strong financial position, we
remain confident in our growth potential and prospects."

 

 

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 operating profit of
£15.9m (FY2024: £14.2m) and Headline profit before tax of £11.7m (FY 2024:
£12.5m).

 

 Chris Belsham, Chief Executive            Reg Hoare / Veronica Farah  Mike Bell / Ed Allsopp
 Katie Shortland, Chief Financial Officer

 NWF Group plc                             MHP                         Peel Hunt LLP
                                                                       (Nominated Adviser and broker)
 Tel: 01829 260 260                        Tel: 07710 117 517          Tel: 020 7418 8900

 

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