Richard Whiting, CEO, updates on £NWF FY results, with PTP up 2.5% and EPS up 3%, all achieved with lower revenues, reflecting lower commodity costs, which doesnt affect profits. The dividend is increased by 5%.
CAPEX investment and 3 acquisitions has cost £10m, although debt is still only £9.9m (less that 1x EBITDA), due to NWFs strong cash generation.
Achievement across each division:
1. Feeds increased volumes and market share
2. Foods at capacity, added repacked work
3. Record fuel volumes
Market conditions have been difficult dairy farmers have faced low milk prices; food distribution is competitive; the warm autumn and winter meant less demand for heating oil - however, in spite of this growth has been achieved.
Whiting runs through each division, outlining the challenges and opportunities; and where the acquisitions fit in.
Brexit: hasnt had much impact to date; and NWF dont anticipate any implications.
Ultimately, he says, NWF has strong management, who spot growth opportunities, with the asset backing to take advantage of them. Highly focussed on good cash generation and optimising share holder returns.
NWF are trading in line with expectations for the first two months of new financial year; and the increase in dividend highlights the confidence in the future for the group.
True, it does increase NWF's sales in Cumbria. Carrs Billington would not have been able to justify keeping the two JPA sites open if they had bought the company. It will potentially save NWF fuel costs in transporting feed from their Wardle site into north Cumbria and southern Scotland. It probably makes sense all round and is less disruptive to the market than if Mole Valley had bought the business.
NWF have bought Jim Peet Agriculture in Cumbria, one of the last independent animal feed producers in the region. It increases NWF's market share at a time when the feed industry is under pressure due to the mild winter weather and low milk and meat prices. There should be some overhead cost savings and raw material buying efficiencies.
There are probably other independent feed manufacturers thinking about selling up now that times are tough.
Interim results out on Tuesday 2nd. Profits will be around £2.5m and earnings per share just under 4p. At the trading update they maintained expectations for the full year. I just wonder if they will be guiding analysts down slightly with a further 6 weeks results under their belts. The animal feed industry continues to get more competitive with growing overcapacity at a time when milk prices are under pressure and the weather has remained mild.
I would have thought a takeover was unlikely and certainly any party that might be interested would not be buying in the market.Although the agricultural side is the biggest part NWF also has oil distribution business & Boughey grocery storage/transport division.
Carr's results were quite decent so maybe we have just attracted some interest or maybe as many of the shares are owned by their customers Cheshire & NW farmers are not doing as badly as they claim and are buying a few more.As a holder I probably should not say this but the shares are probably fairly fully valued at the moment!
It's puzzling as the other two animal feed companies, Carr's Group and Wynnstay have also been strong this week. I'm not aware of anything positive happening with the milk price or extra support for farmers etc which could justify such a rise. It could be that some investor is buying relatively defensive shares as tobacco stocks have also been good performers this week. Possibly Forfarmers who bought the BOCM Pauls business have been talking about expanding further in the UK. In other words I haven't really got a scooby but the wife of the Carr's chairman has just sold some shares so she thinks it's a selling opportunity.
"Companies that consistently grow their dividend also tend to provide investors with capital growth. Although many AIM companies do not have a long track record there are some that have grown their dividends over a decade or more. Some of these ..."
"Distributor NWFâs full-year results reported earlier this month describe business as usual for this relatively stable company.A mild winter meant prices for heating oil and animal feed weakened and, compared to the previous year which was marked ..."
Probably not a share that attracts iii punters.Oddly enough I was about to reply to your post to say that the slightly "soggy" performance of the agriculural division on top of last years poor(ie warm)winter for oil suppliers meant that the fall in share price was justified.
However for reasons unknown we have seen a modest recovery in price.I still retain a holding.
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