Final Results
NWF Group PLC
11 August 2003
Strictly Embargoed until 07.00, 11 August 2003
NWF GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2003
NWF Group plc ('NWF'), today announces record results for the year ended 31 May
2003.
Commenting on the results, Roy Willis, Chairman said: 'I am very pleased to be
able to report to shareholders that the Group has again performed well with a
sixth successive year of increased profits and dividends. This has resulted from
growth in all four areas of our activities, demonstrating the underlying
strength of our strategy of promoting progress in several sectors.'
Financial Highlights:
• turnover up 9% to £169m (2002: £155m)
• record pre-tax profit, up 20 % to £5.05m (2002: £4.21m)
• increased profits again from all four businesses
• basic earnings per share up to 42.6p (2002: 36.7p)
• dividend per share increased again to 14.8p (2002: 13.0p)
• six years of compound double-digit growth
On the outlook for the coming year Roy Willis added: 'My colleagues and I are
confident that the Group can continue on its path of generating excellent
returns for shareholders.'
Graham Scott, Chief Executive, commented: 'There are growth opportunities in all
of our businesses. In every year, we aim to run each business at its maximum
capacity but also to bring forward plans to raise the capability of the
business, as we have done consistently in the past, by investment, acquisition
or cold start as appropriate.'
For further information please visit www.nwf.co.uk or contact:
Graham Scott, Chief Executive John West
Alan Fulker, Finance Director Claire Melly
NWF Group plc Tavistock Communications
Tel: 01829 260 260 Tel: 020 7600 2288
Chairman's Statement
Financial highlights for 2003:
• turnover up 9% to £169m (2002: £155m)
• record pre-tax profit, up 20 % to £5.05m (2002: £4.21m)
• increased profits again from all four businesses
• basic earnings per share up to 42.6p (2002: 36.7p)
• dividend per share increased again to 14.8p (2002: 13.0p)
• six years of compound double-digit growth
I am very pleased to be able to report to shareholders that the Group has again
performed well with a sixth successive year of increased profits and dividends.
Pre-tax profits increased by 20% to £5.05m (2002: £4.21m) on a turnover which
was up by 9% to £169m (2002: £155m). Basic earnings per share increased 16% to
42.6p (2002: 36.7p). This has resulted from growth in all four areas of our
activities, demonstrating the underlying strength of our strategy of promoting
progress in several sectors.
Trading results
Operating results showed record levels in each activity. The Distribution
division had a year of full warehousing utilisation with corresponding levels of
transport and handling work. Our Feeds business increased market share again and
expanded its geographical territory. The Fuels division had an outstanding year
and turned in the best-ever performance by a NWF business. The Retail division
performed well in aggregate with the garden centres in particular outperforming
the previous year.
Cash flows and funding
The Group generated £8.7m cash (2002: £6.8m) from operating activities and net
cash flow was £1.8m (2002: £1.6m). The uses of funds included £2.2m of net
capital expenditure (2002: £1.3m) and £0.8m (2002: £2.3m) in acquisition
payments as investments in the future ability of the Group to sustain and grow
earnings. Interest cover for the year remained very comfortable at 10.8 times
(2002: 7.5 times). Year-end gearing fell to 46% from 69% at the end of 2002.
Acquisitions and investments
The Group acquired T Splitt, a fuel business in Burnley, in January 2003 and
will use this opportunity to rearrange the operating boundaries of our Cheshire
and Lancashire fuel depots. Capital expenditure in the year has again related
mainly to vehicles for the various businesses and to a number of IT and
operational projects. The Feeds business is establishing a blending and
distribution base in Cumbria.
Dividend
At the Annual General Meeting, we intend to propose a final dividend of 10.8
pence per share (2002: 9.4 pence per share), bringing the total for the year to
14.8 pence per share. This represents an increase of 13.8% on last year's total
of 13.0 pence per share. This total dividend for the year would have a cover of
2.9 times post-tax earnings (2002: 2.8 times). Shareholders will have seen their
annual dividend rise by a factor of 41/2 times from 3.35p per share ten years
ago. Subject to shareholder approval at the forthcoming AGM of the Company, the
final dividend will be paid on 1 November 2003 to shareholders on the register
at the close of business on 22 August 2003. The shares will trade ex-dividend on
20 August 2003.
Outlook for the current year
My colleagues and I are confident that the Group can continue on its path of
generating excellent returns for shareholders. In common with many other
companies, we face sharply increasing costs in areas such as pensions and
insurances which have been taken into account in formulating our plans for the
year. The Distribution division will continue to optimise its use of facilities
centred on Wardle. Feeds has plans in place for consolidating new territories.
Fuels will seek to move on again from this year's gains. Retail is aiming to
benefit from organic improvements to existing garden centres while looking for
other opportunities to enhance performance.
Customers, colleagues and shareholders
As I noted in my Interim Statement, Tony Stanton retired in November 2002 after
nine years service as a non-executive director. Tony brought extremely valuable
experience and judgement to the affairs of the company for which we thank him
and wish him well in retirement.
Finally, my thanks for a splendid year go to all members of the NWF community -
to both customers and suppliers for their business partnerships, to all of my
colleagues (now numbering some 750) for their successful efforts and to
shareholders old and new who have supported the Group through this financial
year.
J Roy Willis
Chairman
11 August 2003
Chief Executive's Review
The Group
The Group has had another very successful year with most of the businesses
improving their operating margins and with all achieving individual record
profits.
Overall, Group sales rose 9% from £154.7m to £168.6m. Within this, Feeds sales
value fell slightly on a higher physical volume of sales, due to lower world
prices for feed ingredients, while the underlying higher cost of oil drove Fuels
turnover even higher than its higher physical volume would indicate. Some £58m
of Fuels turnover consists of Excise Duty, a point to consider when comparing
sales-based ratios. Retail turnover included a first full year of Dukeries
Garden Centre.
Distribution
Boughey Distribution ran at or above capacity, by temporary use of offsite
storage, during the year. Sales increased by 12% from £12.6m to £14.1m.
Operating profit increased by 10% from £1.318m to £1.447m as a result of
optimised utilisation of the division's warehousing capacity and improved
operating procedures. The balance of income moved towards warehousing and
handling rather than transportation and the packing activity was a little
quieter than in the previous year. Investment is in train to upgrade Boughey's
garage facilities to the advantage of all of the Group's Wardle-based vehicles.
Chris Foster, one of our warehouse managers, won the UK Warehousing
Association's 2003 'Warehouseperson of the Year' award.
Feeds
NWF Agriculture raised its volume and market share of cattle feeds yet again
with total sales of compound feeds and feed blends at some 268,000 tonnes, 11%
higher than in 2002 (2002: 241,000 tonnes). Over 95% of the products were
manufactured at Wardle. Sales value was lower at £43.6m (2002: £44.1m) on this
higher sales volume. Operating profit was up 1% at £1.426m from £1.408m in the
prior year. We have extended our sales force coverage and have established a
satellite operation in Kirkbride, Cumbria, which will improve distribution to
customers both sides of the Border. Most local deliveries of compound feeds,
together with the production of feeds blends using plant transferred from
Wardle, will be based on this site. The blending plant at Wardle will be
replaced by a larger unit which will be able to satisfy the growing demand in
the remainder of NWF's territory for blended feeds.
Fuels
NWF Fuels had an outstanding year with volumes 7% higher at 230 million litres
(2002: 215 million litres) with increases in each of the product categories.
Sales value was £94.6m (2002: £84.3m) an increase of 12%, indicating the strong
oil price during the year, particularly in the first quarter of 2003. The
division's operating profit was an NWF record at £1.716m, an increase of 22%
from £1.408m last year. Particular progress was made in developing our trade
with retail garages and there are now 84 sites under contract within the Group.
The business of T Splitt, which was acquired in January 2003, has allowed us to
move our activity around Manchester to a new base in Burnley.
Retail
The Retail business saw turnover rise by 18% to £16.3m from £13.8m.
Like-for-like sales in the three Garden Centres were 7% up on the previous year
with both Christmas and Spring trading proving satisfactory. Operating profit
for Retail increased by 36% to £0.977m from £0.720m driven by the Garden Centres
with a particular contribution from the first full year of Dukeries, acquired in
late April 2002. The Group is currently developing the indoor retail area at
Wheatcroft Garden Centre, which will more than double this site's existing
indoor space. In addition, a new canopied area will be added to the present
planteria to allow improved customer access. The new space, with its associated
product ranges, will be ready for the 2003 Christmas season.
Outlook for 2003/2004
There are growth opportunities in all of our businesses. In every year, we aim
to run each business at its maximum capacity but also to bring forward plans to
raise the capability of the business, as we have done consistently in the past,
by investment, acquisition or cold start as appropriate. In Distribution, we
will consider how best to provide further warehousing capacity by extending our
own Wardle site or by obtaining facilities in the locality. In Feeds, we will
utilise the investments being made in raw materials storage at the feed mill and
in blending capacity at Wardle and in Cumbria. Our feed mill took from 1980 to
1998 to manufacture its first million tonnes and we delivered our two-millionth
tonne of compound feeds in July 2003, testament to the acceleration of our feed
volume. In Fuels, we will consolidate recent moves and seek further territorial
expansion to add to the steps already taken in recent years. In Retail, there
are improvements in train at existing Garden Centres and we will review further
steps to expand and improve the returns in this business. The Chairman has,
however, already alluded to the increased costs faced by the whole Group in the
new year, particularly those associated with employees.
In this new financial year, Group trading performance is in line with
expectations in what is normally the quietest quarter of our year.
Graham Scott
Chief Executive
11 August 2003
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
2003 2002
£'000 £'000
TURNOVER 168,553 154,741
Cost of sales (151,842) (140,513)
GROSS PROFIT 16,711 14,228
Administrative expenses (11,145) (9,374)
OPERATING PROFIT 5,566 4,854
Interest payable (517) (648)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 5,049 4,206
Taxation (1,658) (1,300)
PROFIT AFTER TAXATION 3,391 2,906
Equity dividends (1,178) (1,035)
RETAINED PROFIT TRANSFERRED TO RESERVES 2,213 1,871
Earnings per share
Basic 42.6p 36.7p
Diluted 41.9p 36.7p
All of the Group's turnover is derived from continuing operations.
STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES
2003 2002
£'000 £'000
PROFIT FOR THE FINANCIAL YEAR AFTER TAXATION 3,391 2,906
PRIOR YEAR ADJUSTMENT - (178)
TOTAL GAINS RECOGNISED SINCE LAST ANNUAL REPORT 3,391 2,728
CONSOLIDATED BALANCE SHEET
2003 2002
£'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 2,954 2,634
Tangible assets 17,411 17,158
20,365 19,792
CURRENT ASSETS
Stocks 5,317 5,256
Debtors 19,625 18,887
Cash and bank balances 23 218
24,965 24,361
CREDITORS - Amounts falling due within (22,984) (22,399)
one year
NET CURRENT ASSETS 1,981 1,962
TOTAL ASSETS LESS CURRENT 22,346 21,754
LIABILITIES
CREDITORS - Amounts falling due after
more than one year (4,215) (5,741)
PROVISIONS FOR LIABILITIES AND CHARGES
Pension provision (105) (113)
Deferred Taxation (715) (802)
NET ASSETS 17,311 15,098
CAPITAL AND RESERVES
EQUITY SHARE CAPITAL 1,990 1,990
RESERVES
Share premium 535 535
Revaluation reserve 1,598 1,624
Other reserves 302 302
Profit and loss account 12,886 10,647
TOTAL EQUITY SHAREHOLDERS' FUNDS 17,311 15,098
CONSOLIDATED CASH FLOW STATEMENT
2003 2002
£'000 £'000 £'000 £'000
NET CASH INFLOW FROM OPERATING 8,727 6,753
ACTIVITIES
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
Interest paid (543) (695)
TAXATION
Corporation tax paid (1,631) (1,082)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
Purchase of tangible fixed assets (2,263) (1,348)
Sale of tangible fixed assets 109 39
NET CASH OUTFLOW FROM CAPITAL (2,154) (1,309)
EXPENDITURE
ACQUISITIONS AND DISPOSALS
Acquisition of businesses (616) (1,657)
Cash acquired with businesses - 178
Deferred payment for businesses acquired (187) (800)
in prior year
NET CASH OUTFLOW FOR ACQUISITIONS (803) (2,279)
EQUITY DIVIDENDS PAID (1,066) (911)
NET CASH INFLOW BEFORE FINANCING 2,530 477
FINANCING
Medium term loan received - 1,600
Medium term loan repayments (739) (454)
Shares issued for consideration - 19
including premium
INCREASE IN CASH IN THE YEAR 1,791 1,642
NOTES
TAXATION
2003 2002
£'000 £'000
UK Corporation tax at 30% (2002 - 30%) 1,758 1,345
Deferred tax (81) 8
1,677 1,353
Prior year - current tax (13) (38)
- deferred tax (6) (15)
1,658 1,300
SEGMENTAL INFORMATION
Business Turnover Operating Net
profit operating
assets
2003 2002 2003 2002 2003 2002
£'000 £'000 £'000 £'000 £'000 £'000
Distribution 14,071 12,565 1,447 1,318 9,296 9,257
Feeds 43,555 44,134 1,426 1,408 7,410 7,998
Fuels 94,645 84,260 1,716 1,408 4,301 3,962
Retail 16,282 13,782 977 720 4,757 5,233
168,553 154,741 5,566 4,854 25,764 26,450
EARNINGS PER SHARE
The calculation of basic earnings per share is based on profit after tax for the
financial year divided by 7,960,241 ordinary shares being the weighted average
number of ordinary shares in issue (2002 - 7,918,652).
Earnings per ordinary share is adjusted to a fully diluted basis by adding to
the weighted number of shares in issue, in the calculation, the weighted average
number of 135,000 (2002 - 9,000) diluted ordinary shares in respect of
outstanding share options.
RECONCILIATION OF OPERATING PROFIT TO NET
CASH INFLOW FROM OPERATING ACTIVITIES
2003 2002
£'000 £'000 £'000 £'000
Operating profit 5,566 4,854
Goodwill amortisation 143 53
Depreciation charge 2,038 1,879
Loss/(profit) on sale of tangible assets 11 (34)
Increase/(decrease) in stocks (56) 238
Increase/(decrease) in debtors (738) 477
Increase/(decrease) in creditors 1,771 (694)
Decrease in pension provision (8) (20)
969 1
Net cash inflow from operating activities 8,727 6,753
ANALYSIS OF NET DEBT
Other
At 31 May non-cash At 31 May
2002 Cash flow changes 2003
£'000 £'000 £'000 £'000
Cash and bank balances 218 (195) - 23
Bank overdraft (4,968) 1,986 - (2,982)
(4,750) 1,791 - (2,959)
Debt due within one year (739) 739 (1,026) (1,026)
Debt due after one year (4,941) - 1,026 (3,915)
Total (10,430) 2,530 - (7,900)
FINANCIAL CALENDAR
Annual Report to be published 1 September 2003
Annual General Meeting 25 September 2003
Dividend:
- to be paid 1 November 2003
- ex-dividend 20 August 2003
- record date for shareholders 22 August 2003
Annual Report: This preliminary announcement does not form the Group's statutory
accounts. The figures shown in this release have been extracted from the Group's
full financial statements which, for the year ended 31 May 2002, have been
delivered, and for the year ended 31 May 2003 will be delivered to the Registrar
of Companies. Both carry an unqualified audit report.
The financial statements for the year ended 31 May 2003 have been prepared in
accordance with applicable accounting standards, using the same accounting
policies as set out in the Annual Report for the year ended 31 May 2002.
After 1 September, copies of the Annual Report can be obtained from the
Company's registered office at Wardle, Nantwich, Cheshire, CW5 6BP or viewed on
the Company's Website: www.nwf.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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