Wynnstay delivers resilient half year results
Agricultural group Wynnstay saw profits rise in the six months to the end of April despite a fall in turnover due to commodity price deflation and challenging market conditions caused by the coronavirus crisis.
Chief executive Gareth Davies said they had been "resilient" results in the face of the headwinds created by the coronavirus pandemic, continuing Brexit uncertainty and subdued farmgate prices.
He added that it demonstrated the robustness of the business.
"Wynnstay’s broad spread of agricultural activities is a significant strength, acting as a natural hedge against sector variations.
“We are proud of the way staff responded to the challenges of trading under the Government’s emergency ‘lockdown’ measures, which meant that we were able to maintain the supply of products and services to customers, albeit with necessary adaptations.
“The group is well-placed financially and operationally to navigate the ongoing coronavirus crisis. While we expect the remainder of the year to remain challenging, our confidence in the long-term prospects for Wynnstay remain undiminished," said Mr Davies.
The group, which has its head office in Llansantffraid, Powys, and Wynnstay stores across the region including in Astley, Craven Arms, Leominster, Newport, Pontesbury, Oswestry, Welshpool, Newtown and Whitchurch, had a four per cent rise in pre-tax profits to £4.3 million on revenue down 12 per cent from £260.5m to £229.2m.
The results benefited from the group’s balanced spread of agricultural activities, which provide a natural hedge against sector variation
Its agriculture division's revenue was down from £195m a year before to £166.4m with the extreme wet weather in the autumn adversely affecting the winter planting season, reducing demand for arable.
Safety during the lockdown affected some ancillary sales for the specialist agricultural merchanting division with revenue down from £65.4m to £62.8m. An order and collect system was established across its network of 55 depots to minimise infection risks.
Chairman Jim McCarthy said remote working arrangements were put in place and as an essential service provider Wynnstay continued to trade across all areas of activity.
All depots, except for three, have now returned to more normalised operating procedures, with appropriate safe working practises in place.
Wynnstay did not have to make use of the Government’s Coronavirus Job Retention Scheme and not staff were furloughed.
The board has declared an interim dividend of 4.6p per share – the same as last year - reflecting continuing confidence in the underlying business while recognising the broader economic uncertainty.
Mr Davies said they were very pleased to have been able to retain the dividend.
The group's net debt had also reduced from £14.7m a year before to £2.5m.
He said the lockdown had been an exceptionally challenging period and the group was pleased to have come through it in good shape, but still faced the political uncertainty over Brexit.
Finance director Paul Roberts said the business had incurred some additional costs to meet regulations and had taken on 25 additional staff during lockdown to meet changes in its way of operating.
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