REG - Wynnstay Group PLC - Trading Update

WynnstayAnnouncement

30/11/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231130:nRSd1316Va&default-theme=true

RNS Number : 1316V  Wynnstay Group PLC  30 November 2023

AIM: WYN

WYNNSTAY GROUP PLC

("Wynnstay" or "the Group")

 

TRADING UPDATE

 

The Board of Wynnstay, the agricultural supplies and specialist merchanting
group, provides an update on trading for the financial year ended 31 October
2023 ("FY23").

 

The trading environment in the second half of the financial year was more
difficult than the first, with lower farm-gate prices adversely affecting
farmer spending patterns. In addition, the seasonally critical final quarter
has been impacted by abnormally wet weather. As a result, the Group's results
for the financial year are now expected to be below current market
expectations.

 

The Agriculture Division suffered from disruption to post-harvest farming
activities caused by the heavy rains, which resulted in lower sales of winter
seed products, particularly in October. It also saw reduced demand for feed
and fertiliser, reflecting both good on-farm grass growth and weaker farm-gate
prices, especially for milk. As anticipated at interims, the Specialist
Merchanting Division faced inflationary pressures and saw lower volumes of
bagged feed sales and hardware products. By contrast, the Group's grain
marketing business, GrainLink, which is accounted for within the Agriculture
Division, delivered a record performance. Its strong results reflected both
the good-sized harvest and higher market penetration.

 

The three Joint Ventures businesses recorded another strong total
contribution, which is expected to be slightly ahead of the prior financial
year.

 

Looking ahead, with uncertainty over milk and other farm-gate prices, farmer
sentiment is likely to remain cautious in the short-term, but with a strong
market position and balanced business model, the Board still anticipates that
the next financial year will show an improvement over FY23.

 

The Group expects to announce its results for the year ended 31 October 2023
towards the end of January 2024 and will provide a further update on current
trading at that time.

 

Accounting Note:

 

As previously reported, in the financial year ended 31 October 2022,
Wynnstay's Agriculture Division recorded a non-cash, nominal accounting gain*
of c.£434,000. This non-cash gain reversed in FY23, and in addition, by the
same accounting treatment, the Agriculture Division is expected to recognise a
non-cash, nominal accounting loss on derivative contracts of c. £375,000 for
FY23, which will reverse in FY24. This accounting treatment has no effect on
the grain trading book of Wynnstay's Agricultural Division, where the
derivative contracts in place at the financial year-end are used to
commercially hedge physical contracts to be executed in the next financial
year. It simply accelerates the recognition of the fair value from the
relevant transactions.

 

*This resulted from the accounting treatment of financial derivatives, in
accordance with International Financial Reporting Standard 9, which requires
that certain open derivative contracts be valued by reference to a recognised
market price as at the financial year-end.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

Enquiries:

 

 Wynnstay Group plc     Gareth Davies, Chief Executive                                             T: 01691 827 142

                        Paul Roberts, Finance Director

 KTZ Communications     Katie Tzouliadis / Robert Morton                                           T: 020 3178 6378

 Shore Capital          Stephane Auton / Tom Knibbs / Rachel Goldstein (corporate advisory) Henry  T: 020 7408 4090

                      Willcocks (corporate broking)
  (Nomad and Broker)

 

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  TSTNKCBQFBDDDDB