LONDON (ShareCast) - (Sharecast News) - Shares in Wynnstay Group tumbled on Thursday, after the agricultural supplies specialist warned on profits.
Updating on trading for the year to 31 October, the firm said lower farm-gate prices and abnormally wet weather had made for a "difficult" second half.

In particular, heavy rain meant there had been lower sales of winter seed products in the critical final quarter, as well as reducing demand for feed and fertiliser.

Its merchanting division, meanwhile, was hit by inflationary pressures.

As a result, Wynnstay said that results for the year were now expected to come in below current market expectations.

As at 1100 GMT, the stock had lost 14%, at 371.05p.

The AIM-listed firm noted: "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 the 2023 full year."

It also noted that in contrast to the agriculture and merchanting divisions, its grain marketing business, GrainLink, had delivered a "record" performance, boosted by both a good sized harvest and higher market penetration.

Shore Capital, which has a target price of 430p on the stock, said: "We reduce our 2023 full-year adjusted pre-tax profits by around 12%, to £9.4m, and adjusted earnings per share by around 9%, to 33.2p.

"Despite the near-term headwinds, which are external factors and not controlled by the group, we believe Wynnstay is well placed in the long term to take advantage of the structural growth drivers across the agricultural industry, in particular with its focus on progressing and developing its specialist advisory offering to target the higher end of the food value chain."

Shore Capital is Wynnstay's nominated advisor and broker.

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