Wynnstay reports decline in full-year revenue, profit
By Josh White
Date: Tuesday 11 Feb 2025
(Sharecast News) - Wynnstay Group reported a decline in revenue and profit for the financial year ended 31 October on Tuesday, reflecting challenging market conditions and commodity price deflation.
The AIM-traded firm said revenue fell to £613.1m from £735.9m in the prior year, with commodity deflation accounting for the majority of the decline.
Gross profit remained relatively stable at £79.2m, compared with £79.9m in 2023, despite lower activity levels and weaker margins in fertiliser manufacturing and grain marketing.
Adjusted operating profit declined to £7.9m from £10.2m, while adjusted profit before tax fell to £7.6m from £10.3m.
Statutory profit before tax was £4.1m, down from £8.7m, due in part to non-recurring costs of £2.3m related to business reorganisation and asset impairments.
Earnings per share dropped to 12.12p from 30.74p.
However, the company maintained a robust balance sheet, with net cash rising to £32.8m from £23.7m.
The board proposed a final dividend of 11.9p per share, up from 11.75p, bringing the total dividend for the year to 17.5p, reflecting strong cash generation and confidence in future prospects.
Segmental performance was mixed - the feed and grain division reported an adjusted profit before tax of £0.7m, significantly lower than the £5.7m recorded in 2023, as manufactured feed volumes declined, particularly in poultry feed, and a poor harvest impacted grain trading.
The fertiliser and seed division saw an increase in adjusted profit before tax to £1.4m from £0.8m, although sales were affected by adverse weather conditions and margins remained under pressure due to falling raw material prices.
Depot merchanting performed strongly, with adjusted profit before tax rising to £5.5m from £3.8m, driven by margin improvements that offset higher operational costs.
The company said it had launched 'Project Genesis', a three-year initiative aimed at creating a more efficient operating model to drive higher margins, profits, and cash generation.
Wynnstay said the restructuring would include a new integrated divisional structure, which was already being implemented.
Alk Brand joined as chief executive officer on 1 October to lead the initiative.
Looking ahead, Wynnstay said it expected to deliver a stronger performance in the 2025 financial year, supported by operational improvements and resilient farmgate prices, despite ongoing uncertainties around government agricultural policies.
"It was a disappointing year for the group, reflecting a number of challenges, including adverse weather, which impacted planting and growing conditions, falling commodity prices and underperformance in certain areas of the business," said chief executive officer Alk Brand.
"More positively, investments progressed, cash flows were good, and the Group's balance sheet remains strong.
"Together with the board, I have reviewed the business, and we have launched Project Genesis."
Brand described it as a three-year transformation programme, focussed on establishing a more efficient operating model to drive performance.
"We are confident that this will better position Wynnstay for future growth and long-term success, and create substantial value for shareholders.
"Trading in the new financial year is in line with management expectations, and we anticipate an improved performance over last year, helped by the actions we have already taken."
At 0931 GMT, shares in Wynnstay were up 8.68% at 308.66p.
Reporting by Josh White for Sharecast.com.
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