22/06/2007
A balanced business spread enabled agricultural and retail group Wynnstay to deliver redoubtable interim figures to 30 April in challenging markets.
The Wales-based manufacturer and supplier of fertiliser, seeds and animal feeds to farmers (plus supplying animal healthcare products and pet and equine food to its country-dwelling customer base) grew pre-tax profits by 39% to £1.96m on turnover up 53% to £80m.
Earnings advanced to 12.4p, allowing for a 7.1% dividend increase to 1.875p, with the positive financials reflecting recovery in the fertiliser market after last year’s sharp dip (boosting sales at the arable division), as well as a triumphant six months from £2.5 million August acquisition Glasson Group. Contributing £23m to the top line, Glasson proved a particular beneficiary of rising raw material prices, enhancing its trading activities. Fertiliser market recovery also assisted Glasson’s blending operations in Lancashire.
In contrast, input hikes hit Wynnstay’s existing feeds manufacture and sales business, where performance was also depressed by flagging demand amid milder weather conditions.
Overall, the group strategy remains clear. Chief executive Bernard Harris plans further consolidation of the agricultural sector while expanding the higher-margin retail side of the business. Significantly, the stores division had a good first half, a first dedicated pet store (Just for Pets) is open and further stores are planned.
Investors put off by escalating costs and margin pressure across parts of the business should bear in mind the group’s progressive dividend and the fact that the valuation is supported by net assets of £26.8m.
| Market cap: | £32.6m |
| PE Historic: | 15.3 |
| Share price: | 277p |
| AIM | £27.54m |
191.50p
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-2.00p
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| Other company articles: |
| 08/08/2008 |
| 21/02/2008 |
| 07/01/2008 |
| 22/06/2007 |
| 24/01/2007 |
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