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Wynnstay Group PLC (WYN)

  Print      Mail a friend       Annual reports

Wednesday 26 January, 2011

Wynnstay Group PLC

Final Results

RNS Number : 0737A
Wynnstay Group PLC
26 January 2011
 



AIM: WYN

WYNNSTAY GROUP PLC

("Wynn stay" or "the Group")

 

Final Results

For the year ended 31 October 2010

 

Key Points

 

·      Record results - supported by increased revenues across all operations

 

·      Revenues up 13% to £243.74m (2009: £214.95m) including:

agricultural supplies contribution of £178.02m

specialist retailing contribution of £65.47m

 

·      EBITDA increased by 18% to £9.0m (2009: £7.62m)

 

·      Group pre-tax profit* rose 14% to £5.95m (2009: £5.20m)

 

·      Earnings per share up 4% to 27.48p (2009: 26.42p)

 

·      Net assets up 20% to £47.37m (2009: £39.49m)

 

·      Final dividend of 4.70p proposed, taking total dividend to 7.10p, up 9% (2009: 6.50p)

 

·      Acquisition of Woodheads Seeds establishes Group as major participant in UK seed processing sector - more than doubled seed processing capacity

 

·      Agricultural supplies business benefited from increased volumes across feed and fertiliser activities

 

·      Specialist retailing businesses continue to grow strongly:

Just for Pets chain; roll-out continues with two further store openings in year

Wynnstay Stores; like-for-like sales up 10%, underpinned by store refurbishments

 

·      Board remains very positive about growth outlook

 

* Group pre-tax profit includes the Group's share of pre-tax profits from joint ventures & associate investments

 

 

Ken Greetham, Chief Executive, commented,

 

"Wynnstay has achieved its best set of results to date, with record levels of revenues and profit. This excellent performance was supported by increases in revenues and profits across all divisions and the breadth of our activities continues to be a major strength.

 

Our purchase of Woodheads Seeds, in the second half, was a particular corporate highlight in the year and positions Wynnstay as a major participant in the seed sector in the UK. 

 

The Group has a strong financial base, with low gearing and good cash flows.  Looking ahead, we remain very positive about the long term macro economic trends supporting UK agriculture and our own trading prospects. Our strategy to grow the business both organically and via acquisition remains. Within the agricultural sector, we will continue to seek acquisitions which complement our existing activities. We also see further scope to enlarge our specialist retailing businesses, continuing the steady roll out of Just for Pets and enlarging our Wynnstay Stores network over time."  

 

 

Enquiries:

Wynnstay Group plc

Ken Greetham, Chief Executive

Paul Roberts, Finance Director

T: 01691 828512

T: 020 3178 6378 (today)




Biddicks

Katie Tzouliadis

 

T: 020 3178 6378

WH Ireland Limited (Nominated Adviser & Joint Broker)

Robin Gwyn

Stuart Forshaw

Nicola Rayner

 

T: 0161 832 2174

T: 0161 832 2174

T: 0121 265 6300

Shore Capital (Joint Broker)

Andrew Raca

T: 020 7408 4090

 

 

CHAIRMAN'S STATEMENT

 

Trading Overview

 

Trading results for the year show the Group's revenues and profits at record levels, with revenues at £243.74m, up 13% on last year and pre-tax profits at £5.95m, up 14% year on year. The breadth of our activities continues to be a major strength for Wynnstay and this excellent performance was achieved as a result of increases in revenues and profits across both the Group's agricultural and specialist retailing operations. 

 

During the year, we made two acquisitions which further strengthen Wynnstay's broad agricultural base, buying Woodheads Seeds Ltd ("Woodheads") in May 2010 and the remaining 50% of Youngs Animal Feeds, which we did not already own, in November 2009.  Woodheads and Youngs Animal Feeds contributed a combined £19.18m of revenues to this year's result.  More importantly, the addition of Woodheads significantly scales Wynnstay's seed processing capability and establishes the Group as one of the leading participants in this marketplace. Woodheads also moves the Group into a new geographic trading area, Yorkshire, an important arable and livestock region, which will offer us additional trading opportunities over time.  Overall, the Group's revenues from our agricultural supplies activities show year on year growth of 11%.

 

Our specialist retailing activities, comprising Wynnstay Stores and Just for Pets, our pet products store chain, continue to generate pleasing results. In line with our expansion plans, we opened two further Just for Pets stores during the year and, after the year end, opened an outlet in Bristol.  This takes the number of Just for Pets stores to 17, with more planned in the current financial year.  We are continuing with the refurbishment programme at Wynnstay Stores.  With its product offering geared principally towards the farming community, sales at Wynnstay Stores remain very robust, with a significant proportion of farmers' spend at our stores being non-discretionary.  Over time, we plan to add further branches within our trading regions. 

 

Financial Results

 

For the year to 31 October 2010, total revenues increased by 13% to £243.74m (2009: £214.95m). The Group's agricultural supplies activities contributed revenues of £178.02m (2009: £160.72m) and specialist retailing contributed £65.47m (2009: £54.03m) to this result, both areas showing encouraging growth. The Group's pre‐tax profit was £5.95m (2009: £5.20m), representing a rise of 14% on last year.  The operating profit contribution from agricultural supplies activities was £2.88m (2009: £2.51m) and from specialist retailing activities was £3.46m (2009: £3.02m).  The Group's joint ventures and associate business contributed £0.25m (2009: £0.26m) to operating profits.  Net finance cost amounted to £0.38 (2009: £0.55m) and the Group taxation charge was £1.71m (2009: £1.38m).  Earnings per share increased by 4% year on year to 27.48p (2009: 26.42p).   This is based on the weighted average number of ordinary shares in issue during the year of 15.400m (2009: 14.465m).

 

Wynnstay has a strong balance sheet and net assets as at 31 October 2010 have increased by 20% to £47.37m over the same point last year (2009: £39.49m).  This represents £3.08 per share (2009: £2.73). Gearing remains low and has reduced by 8 percentage points to 7% (2009: 15%), based on the year end net debt position of £3.47m (2009: £5.72m). Return on net assets was 13.5% (2009: 13.2%).

 

Dividend

 

The Board of Directors is pleased to propose the payment of a final dividend of 4.70p per share.  Together with the interim dividend of 2.40p per share, paid on 29 October 2010, this takes the total dividend for the year to 7.10p and shows an increase of 9% on last year (2009: 6.50p). The final dividend will be paid on 28 April 2011 to shareholders on the register on 1 April 2011. A scrip dividend alternative will continue to be available as in previous years. The last date for the election for the scrip dividend will be 14 April 2011.

Outlook

 

As we have commented previously, the UK agricultural industry stands to be a beneficiary of macro economic trends, specifically the supply of food and energy to a rapidly increasing World population. These powerful trends, combined with the UK Government's commitment to national food security, provide long term underpinning to our activities and ongoing growth. Wynnstay's scope of activities, encompassing manufacturing, processing and trading, gives the Group a strong presence across the agricultural sector in its trading regions.  In addition, the Group's scale is such that it provides a valuable route to market for agricultural products for which we are not the primary producer. 

 

Our growth plans are based on continuing careful expansion by acquisition as well as organically.  Within the agricultural sector, we will continue to seek acquisitions which complement our existing activities. We see further scope to enlarge our specialist retailing businesses, continuing the steady roll out of Just for Pets but also looking for suitable acquisitions for our Wynnstay Stores network. 

 

The Group has a strong financial base, with low gearing and good cash flows.  We remain very positive about the growth outlook and expect Wynnstay to continue to develop as the UK industry evolves to meet the challenges of the developing World market.

 

John Davies

Chairman

 

 

 

 



CHIEF EXECUTIVE'S REVIEW

 

INTRODUCTION

 

Wynnstay's results for the year to 31 October 2010 are very encouraging.  All divisions have performed well, generating the Group's best set of trading figures to date. 

 

The purchase of Woodheads Seeds, at the beginning of the second half of the financial year, was a particular corporate highlight in the year.  More than doubling our seed processing capability, it positions Wynnstay as a major participant in the seed sector in the UK. The acquisition of the remaining 50% of Youngs Animal Feeds we did not already own, in the first half, has brought us full control of this equine feed producer and pet products distributor.   

 

Our agricultural activities benefited from an increase in volume across all major products, including feed and fertiliser, reflecting industry trends.  We also saw a significant uplift in seed sales, as expected with the addition of Woodheads. 

 

Our specialist retailing activities continue to grow strongly. Our chain of country stores, Wynnstay Stores, serving the rural communities, saw like-for-like revenue growth, helped by our ongoing refurbishment programme.  The roll out of Just for Pets, our pet products chain based in the West Midlands, continued, with further store openings.  More are planned this financial year.   

 

Review of Activities

 

Agricultural Supplies

 

Agricultural revenues increased by 11% over last year to £178.02m (2009: £160.72m) and accounted for approximately 73% of the Group's total income. The profit contribution increased by 15% year on year to £2.88m (2009: £2.51m).  The balanced nature of our agricultural activities, which span the supply of products and services to both livestock and arable farmers, gives our business an underlying strength and allows the Group to benefit from all aspects of agricultural production.  Reflecting the wider industry trend, we saw an increase in demand for feed and fertiliser over the year and as a result of the Woodheads Seeds acquisition, there was also a significant increase in sales of cereal seed.

 

Feed Division

 

The Feed Division, which operates two compound feed mills and one blending plant, offers a full range of animal nutrition products to the agricultural market. The mills' locations allow for logistically efficient delivery of our products throughout our trading area. We also use third party mills for feed manufacture in order to satisfy additional seasonal and geographic requirements.

 

Feed sales for the year were excellent, with increased volumes of blends and compound products from all manufacturing sites contributing to 14% like-for-like growth over a more difficult year in 2009. We saw volatility in raw material prices, however, this was carefully managed by our buyers and as a result, we were able to benefit from sales opportunities throughout the year. Having started at levels significantly below the previous year, raw material prices rose steeply towards the end of the financial year.  While the majority of the increase was recovered in product pricing, it has created an inflationary effect on sales revenue. Gross margins for feeds in the new financial year are in line with our expectations and the business has contracted sales with a number of customers for the first quarter.

 

The Group continues to supply a balanced range of animal feeds into the traditional dairy, beef and sheep markets, with additional volume going into the poultry sector. Our poultry feed sales have increased significantly over recent years and this year showed further good progress.  In line with our strategy to build our presence as a supplier to the free range eggs market, we made further investment in our feed mill at Carmarthen during the year and we continue to work closely with Stonegate, the major egg marketing business, to secure contracts for our farmer customers. Farmgate milk prices remain relatively low, challenging the profitability of dairy farmers.  However, our strategy to spread feed activities across the ruminant and monogastric sectors minimises our exposure to any one element of livestock farming.

 

Glasson Group

 

The Glasson business, which operates from Glasson Dock near Lancaster, has again achieved outstanding results for the Group. Traditionally a raw materials trader and fertiliser blender, Glasson's activities now include the packaging of added value products supplied to specialist animal feed retailers.

 

Glasson's strong performance reflects the reputation of the business as a supplier of choice for the range of products within its portfolio.

 

Arable Division

 

The Arable Division supplies a wide range of products to arable and grassland farmers throughout the trading area. The Group is recognised as a significant supplier of fertiliser, acting as a principal supplier for GrowHow but also supplying our own 'Wynnstay Top Crop' brand of fertiliser.  Seed is processed in Shropshire at the arable base as well as at Woodheads Seeds near Selby in Yorkshire. Agrochemicals are supplied to complete the range of products and the Group offers a grain marketing service to arable farmers, providing an important link with flour and feed mills throughout the trading area.

 

The Group benefits from its relationship with GrowHow, the only UK manufacturer of ammonium nitrate fertiliser, offering an important route to market for its products whilst also marketing the Wynnstay own brand fertiliser range to an increasing customer base throughout the trading area. Fertiliser sales rose significantly as demand in the UK market returned to a more normal level. Grassland farmers purchased more base nutrients than last year when high prices led to a reduction in usage. Sales forecasts for the early Spring are strong but with further price increases possible, ongoing demand may be affected.

 

Our purchase of seed processing and supply business, Woodheads, in May 2010 was an important strategic acquisition, which significantly increased our presence in this market and extended the Group's geographic trading area.  Our seed volumes in the Autumn season more than doubled as a result of the acquisition and the business is now recognised as one of the major processors in the UK.   We are pleased with the performance of the enlarged seed operations although increasing grain costs slightly affected the profitability of the Autumn sales. Herbage sales reached record levels, increasing by 20% over 2009 and Wynnstay is now recognised as a major supplier of herbage seed into the UK market.

 

Grain is traded by regional teams within the Group and over the year under review, the contribution from our grain trading activity returned to more normalised levels compared to the outperformance we saw last year and the year before.  The volatile market was skilfully managed by our teams and our operation continues to provide a valuable service to arable crop producers.   

 

Specialist Retailing

 

Revenues from our specialist retail activities increased by 21% to £65.47m compared to 2009 (2009: £54.03m) and accounted for 27% of the Group's income.  The increase largely reflected the additional contribution from Youngs Animal Feeds, which is now included in this division, but also the benefit of our store refurbishment programme at our country stores chain, Wynnstay Stores, and the opening of two further Just for Pets retail outlets during the year.  The profit contribution rose by 15% to £3.46m over last year (2009: £3.02m).

 

Wynnstay Stores

 

The rural retail outlets, totalling 28 stores, are well established and provide a comprehensive range of products for farmers and rural dwellers. The stores offer an important route to market for a number of suppliers, including pharmaceutical companies with whom the Group works closely to provide specialist professional advice to livestock farmers.

  

Sales increased by 10% over last year on a like-for-like basis, with the uplift principally reflecting the benefits of our store refurbishment programme. Refurbished stores included Tregaron in Ceredigion and Penygroes in Gwynedd where we have increased the product range and enhanced merchandising to attract greater footfall from the rural dweller. Our refurbishment strategy continues and we have increased the number of sales specialists across our stores.  Trained to a recognised standard, these staff members are able to provide specialist advice on pharmaceutical products to customers and so attract additional business to our retail stores. 

 

After the year end, in January 2011, we reopened our store in Dolgellau following its relocation within the existing site.  This has enabled us to significantly upgrade customer services and accessibility. Further store refurbishments are planned during 2011 and we continue to consider suitable acquisition opportunities as they arise.

 

Youngs Animal Feeds has now been fully integrated as a wholly owned subsidiary following the purchase of the remaining 50% of the business we did not already own at the beginning of the financial year. Supplying products to the equine market through wholesalers and retailers in the West of the UK, as well as through our own retail outlets, we have been pleased with its performance this year.  

 

Just for Pets

 

We launched our first dedicated pet products store, trading as 'Just for Pets', in 2007 and, in 2008, acquired a chain of 10 pet superstores based in the West Midlands. The acquisition, subsequently rebranded as Just for Pets, added scale, expertise and increased purchasing power to our activities here. We are now proceeding with a store roll-out plan in our trading area.

 

Revenues continue to increase within this division, reflecting our store opening programme. We opened two new outlets over the year, at Burton upon Trent in November 2009 and in Wolverhampton in March 2010. 

 

In September 2010, we were very pleased to win the Pet Care Trade Association "Retailer of the Year" award, for our Malvern branch.  The award seeks to recognise the highest level of customer care and service offered at an individual store and we believe that our store at Malvern reflects the general culture and service levels across all our Just for Pets stores. 

 

Our roll out strategy for Just for Pets continues and after the year end, in late November 2010, we opened a new store in Bristol, taking the total number to 17.  We have plans for further new store openings over the course of the current financial year and beyond.  Also, in November 2010, we opened an "easipetcare" veterinary concession, including a fully operational surgery, within our Burton upon Trent store and intend to replicate this model in selected outlets.

 

JOINT VENTURES

 

Our two joint ventures (Wyro Developments and Bibby Agriculture) and associate company (Wynnstay Fuels) contributed a combined operating profit before tax of £253,000 (2009: £263,000).  Trading across these businesses was in line with management budgets. 

 

STAFF

 

The Group's continuing successful expansion is underpinned by the hard work and dedication of staff and we appreciate the efforts of all involved. On behalf of the Board I would like to thank all employees for their ongoing commitment and their support in helping to deliver the record results achieved this year.

 

OUTLOOK

 

Wynnstay has very firm foundations, with a broad portfolio of agricultural inputs supplying an industry that has great long term prospects. The breadth of our activities, spanning all aspects of arable and livestock farming, is a major strength and helps to limit the effect of a dip in any one sector.  Strong underlying global demand for food suggests that prices for core raw materials such as grain, whilst still likely to fluctuate, will remain firm; this bodes well for arable farmers and our arable business.  Within the livestock sector however, milk prices are currently disappointing and challenging the perseverance of some dairy farmers.  Nonetheless, the longer term increase in demand should bring stability to the UK dairy industry.

 

The Group is in robust shape financially, generating good cash flows and with very low gearing. This supports our plans to continue the steady expansion of Wynnstay's core activities.  Our strategy to grow the business organically and via acquisitions remains and we continue to seek acquisition opportunities which will enhance our existing operations.  The roll out of our Just for Pets chain will continue, with further store openings planned on busy urban retail parks.

 

The current financial year should be one of continuing progress and I look forward to updating all stakeholders at our forthcoming AGM.

 

Ken Greetham

Chief Executive



WYNNSTAY GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 October 2010


2010


2009


£000

£000


£000

£000







Continuing operations






Revenue


243,744



214,952







Cost of sales


(204,946)



(181,532)







GROSS PROFIT


38,798



33,420

Distribution costs


(28,539)



(24,640)

Administrative expenses


(3,712)



(3,276)







GROUP OPERATING PROFIT BEFORE GOODWILL AND SHARE BASED PAYMENT COSTS


 

 

6,547

 

 


 

 

5,504

Goodwill impairment and share based payments


 

(474)



 

(24)







GROUP OPERATING PROFIT


6,073



5,480







Net finance costs


(381)



(546)







Share of profits/losses in associate and joint ventures

 

253



 

263


Share of tax incurred in associate and joint ventures

 

(68)

 

185


 

(79)

 

184







PROFIT BEFORE TAXATION


5,877



5,118







Taxation


(1,645)



(1,297)







PROFIT FOR THE YEAR


4,232



3,821







Earnings per 25p share


27.48p



26.42p







Diluted earnings per 25p share


27.06p



26.14p

 

 

All of the above are derived from continuing operations.  

There were no recognised income and expenses for 2010 or 2009 other than those included in the Consolidated Statement of Comprehensive Income shown above.

 

 

 

 

WYNNSTAY GROUP PLC

CONSOLIDATED BALANCE SHEET

As at 31 October 2010

 



2010


2009


Note

£000


£000

ASSETS





NON-CURRENT ASSETS





Goodwill


11,455


8,606

Property, plant and equipment


17,040


15,489

Investments accounted for using equity method


3,073


3,771



31,568


27,866






CURRENT ASSETS





Inventories


17,994


12,879

Biological assets


-


441

Trade and other receivables


36,001


25,856

Financial Assets





- loan to joint venture


3,461


3,402

Cash and cash equivalents

8

2,083


957



59,539


43,535






LIABILITIES





CURRENT LIABILITIES





Financial liabilities - borrowings

10

(3,977)


(3,549)

Trade and other payables


(36,583)


(23,645)

Current tax liabilities


(1,067)


(1,074)



(41,627)


(28,268)

NET CURRENT ASSETS


17,912


15,267






NON-CURRENT LIABILITIES





Financial liabilities - borrowings

10

(1,577)


(3,123)

Deferred tax liabilities


(461)


(367)

Government grants


(68)


-

Provisions


-


(151)



(2,106)


(3,641)

NET ASSETS


47,374


39,492

EQUITY





Ordinary shares

11

4,127


3,635

Share premium


16,932


12,931

Other reserves


2,153


1,971

Retained earnings


24,162


20,955

TOTAL EQUITY


47,374


39,492

 

 

 

 



WYNNSTAY GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 October 2010

 


 

Share

capital

Share premium account

General reserves

 

Retained earnings

 

 

Total

Group

£000

£000

£000

£000

£000

 

At 1 November 2008

 

3,605

12,732

1,947

 

18,030

 

36,314

Profit retained for the year

-

-

-

 

3,821

 

3,821

Shares issued during the year

 

30

199

-

 

-

 

229

Dividends

-

-

-

 

(896)

 

(896)

Adjustment in respect of share based payments

-

-

24

-

 

24

At 31 October 2009

 

3,635

12,931

1,971

 

20,955

 

39,492

Profit retained for the year

-

-

-

 

4,232

 

4,232

Shares issued during the year

 

492

4,001

-

-

 

4,493

 

Dividends

-

-

-

 

(1,025)

 

(1,025)

Adjustment in respect of share based payments 

 

-

-

182

 

-

182

 

At 31 October 2010

 

4,127

 

16,932

 

2,153

 

24,162

 

47,374

 

 

 

 

WYNNSTAY GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 October 2010

 



2010


2009


Note

£000


£000

Cash flows from operating activities





Cash generated from operations

12

6,867


10,248

Interest received


31


63

Interest paid


(412)


(609)

Tax paid


(1,712)


(2,171)






Net cash flows from operating activities


4,774


7,531






Cash flows from investing activities





Acquisition of subsidiaries


(3,535)


-

Net liquid debt acquired  


(426)


-

Proceeds from sale of property, plant and equipment


244


71

Purchase of property, plant and equipment


(1,502)


(2,059)

Purchase of investments


(16)


(7)

Dividend received


100


-

Net cash used by investing activities


(5,135)


(1,995)






Cash flows from financing activities





Net proceeds from the issue of ordinary share capital


4,493


229

Finance lease principal repayments


(661)


(503)

Repayment of borrowings


(1,966)


(3,646)

Dividends paid to shareholders


(1,025)


(896)

Net cash generated from financing activities


841


(4,816)






Net increase/(decrease) in cash and cash equivalents


 

480


 

720

Cash and cash equivalents at the beginning of the period


 

535


 

(185)

Cash and cash equivalents at the end of the period

8

1,015


535

 

 

 

 



WYNNSTAY GROUP PLC

 

NOTES TO THE ACCOUNTS

 

1.        The company has taken advantage of the exemption, under section s408 of the Companies Act 2006, from presenting its own income statement.  The profit after tax for the period dealt with in the financial statements under IFRS of the company was £2,820,000 (2009: £1,763,000).

 

2.         SEGMENTAL REPORTING

The chief operating decision-maker has been identified as the Board of Directors ('the Board'). The Board reviews the Group's internal reporting in order to assess performance and allocate resources. The Board has determined that the operating segments, based on these reports are Agricultural Supply, Retail and Other.

 

The Board considers the business from a product/service perspective. In the Board's opinion, all of the Group's operations are carried out in the same geographical segments, namely the United Kingdom.

 

Continuing operations

Agriculture Supply - Manufacturing and supply of animal feeds, fertiliser, seeds and associated   agricultural products.

Retail - Supplies of a wide range of specialist products to Farmers, Smallholders and Pet owners.

Other - Miscellaneous operations not classified as agriculture or retail.

 

The Board assesses the performance of the operating segments based on a measure of operating profit. Finance income and costs are not included in the segment result that is assessed by the Board. Other information provided to the board is measured in a manner consistent with that in the financial statements.

 

Inter- segmental transactions are entered into under the normal commercial terms and conditions that would be available to unrelated third parties. 

 

Primary reporting format - business segments

The segment results for the year ended 31 October 2010 are as follows:

 


Agriculture Supply

 

Retail

 

Other

 

Total

Year ended 31 October 2010

£000

£000

£000

£000






Revenue

178,016

65,470

258

243,744






Segment result

2,878

3,460

(265)

6,073

Share of results of associate and joint ventures

122

-

131

253


3,000

3,460

(134)

6,326

Interest income




31

Interest expense




(412)

Profit before tax




5,945

Income taxes




(1,713)

Profit for the year attributable to equity shareholders



4,232






Segment assets

18,101

26,556

6,188

50,845

Corporate net borrowings




(3,471)

Total net assets




47,374

            

The Group operates in one geographical segment being the UK.

 


Agriculture Supply

 

Retail

 

Other

 

Total

Year ended 31 October 2009

£000

£000

£000

£000






Revenue

160,720

54,034

198

214,952

Segment result

2,511

3,021

(52)

5,480

Share of results of associate and joint ventures

(25)

104

184

263


2,486

3,125

132

5,743

Interest income




63

Interest expense




(609)

Profit before tax




5,197

Income taxes




(1,376)

Profit for the year attributable to equity shareholders



3,821

Segment assets

13,316

25,755

6,136

45,207

Corporate net borrowings




(5,715)

Total net assets




39,492

            

The Group operates in one geographical segment being the UK.

 

3.         FINANCE COSTS - NET

 



2010


2009



£000


£000


Interest expense:





Interest payable on borrowings

(250)


(487)


Interest payable on finance leases

(102)


(100)


Interest payable on other loans

(60)


(22)


 

Interest and similar charges payable

 

(412)


 

(609)







Interest income

31


63


Interest receivable

31


63







Finance costs net

(381)


(546)

  

4.         GROUP OPERATING PROFIT

 

The following items have been included in arriving at operating profit:

 



2010

2009



£000

£000






Staff costs

16,611

15,414






Depreciation of property, plant and equipment:




- owned assets

1,432

1,534


- under finance leases

750

358






Amortisation of government grants

(10)

-






Impairment of goodwill

292

-






(Profit) on disposal of fixed assets

(56)

(43)






Other operating lease rentals payable

1,756

1,248






Repairs and maintenance expenditure on plant, property and equipment

 

1,585

 

1,351






Trade receivables impairment

(51)

233

 

Services provided by the Group's auditors

 

During the year the Group obtained the following services from the Group's auditor

 



2010

2009



£000

£000






Audit services - statutory audit

84

73






Tax services

2

2

 

Included in the Group audit fee are fees of £43,085 (2009: £41,625) paid to the Group's auditor in respect of the Parent Company.

 

5.         SHARE OF POST-TAX PROFIT OF ASSOCIATE AND JOINT VENTURES

 



2010

2009



£000

£000






Share of post-tax profits in associate

107

119






Share of post-tax profits in joint ventures

78

65






Total share of post-tax profits of associate and joint ventures

 

185

 

184

  

6.         DIVIDENDS



2010

2009



£000

£000






Final dividend paid for prior year

630

577


Interim dividend paid for current year

395

319







1,025

896





Subsequent to the year end it has been recommended in the Directors' Report that a final dividend of 4.70p net per ordinary share (2009: 4.30p) be paid on 28 April 2011. Together with the interim dividend already paid on 29 October 2010, of 2.40p net per ordinary share (2009: 2.20p) this would result in a total dividend for the financial year of 7.10p net per ordinary share (2009: 6.50p).

 

7.         EARNINGS PER SHARE



Basic earnings per


Diluted earnings per



share


share



2010


2009


2010


2009



'000


'000


'000


'000











Earnings attributable to shareholders (£'000)

4,232


3,821


4,232


3,821




















Weighted average number of shares in issue during the year (No.'s)

 

15,400


 

14,465


 

15,634


 

14,619




















Earnings per ordinary 25p share (pence)

27.48


26.42


27.06


26.14










Basic earnings per 25p ordinary share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average of ordinary shares in issue during the year excluding those held in the Employee Share Ownership Trust which are treated as cancelled.

 

For diluted earnings per share, the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares (share options and warrants) taking into account their exercise price in comparison with the actual average share price during the year.

 

8.         CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS


Group


2010


2009


£000


£000





Cash and cash equivalents per Balance Sheet

2,083


957

Bank overdrafts

(1,068)


(422)





 

Cash and cash equivalents per Cash Flow Statement

 

1,015


 

535

  

9.         BUSINESS COMBINATIONS

 

During the year the Group completed two acquisitions structured as share purchases.

 

On 2 November the Group purchased the remaining 50% of the share capital in Young's Animal Feeds Limited.

 

Details of the trade, assets acquired, and price paid and trading during the period are provided below.

 

Youngs Animal Feeds Limited

Date of Acquisition





 

2 November 2009


 

Book Value


Fair Value Adjustment


 

Fair Value


£000


£000


£000







Property, plant and equipment

1,159


96


1,255

Cash & cash equivalents

2


-


2

Trade and other receivables

887


-


887

Other current assets

469


-


469

Other current liabilities

(786)


-


(786)

Acquired debt : liquid

(192)


-


(192)

                             non liquid

(135)


-


(135)

Net assets acquired

1,404


96


1,500







Fair Value of previously held equity interest





 

(750)






 

750

Consideration transferred to gain control:






Cash paid





750

 

Revenue in period





 

8,112

 

Operating profit in period





 

159

 

100% of the trade receivables at the Acquisition date have been collected.

 

The gain recognised on the remeasurement of the fair value of the equity interest held in the acquisition before the business combination is deemed immaterial and has been set off against the fair value adjustment.

 

On the 27 May 2010 the Group completed the Acquisition of the entire share capital of Woodheads Seeds Limited, a Yorkshire based seed processing and grain trading business. Details of the trade, assets acquired and price paid and trading during the period are provided below.

 

Woodheads Seeds Limited

Date of Acquisition





 

27 May 2010

 

 





 

Fair Value






£000

Fair value of acquisition






Property, plant and equipment





622

Trade and other receivables





1,330

Other current assets





909

Other current liabilities





(1,982)

Acquired debt : liquid





(236)

Net assets acquired





643







 

Goodwill





 

2,987

 

Total consideration





 

3,630

Consideration transferred to gain control:






Cash paid on completion





2,785

Outstanding balance





95

Maximum contingent consideration





750






3,630

 

Revenue in period





 

11,072

 

Operating profit in period





 

226

 

The contingent consideration to be paid is subject to confirmation of Net Assets and performance targets over the next two years which will result in a payment of up to £750,000.

 

100% of the Trade receivables are expected to be collected.

 

Woodheads Seeds Limited's year end is not coterminous with the Group as the structure of the Share Purchase Agreement was such that the contingent consideration is based on the audited year end accounts as of 30 April. It is the opinion of the Directors that it is in the Group's best interest not to change the year end until the contractual obligation of the contingent consideration has been settled

 

Woodheads Seeds Limited has prepared additional financial statements as at 31 October 2010 which have been used in preparing the consolidated financial statements.

  

10.       FINANCIAL LIABILITIES - BORROWINGS

 

Current




Group




2010


2009




£000


£000








Bank loans and overdrafts due within one year or on demand:






Secured overdrafts


1,068


422


Secured loans


1,597


1,917










2,665


2,339


Loan capital (unsecured)


724


746


Convertible loanstock


18


18


Secured loan notes


-


-


Net obligations under finance leases


570


446










3,977


3,549







Non-current




Group




2010


2009




£000


£000








Bank loans:






Secured


893


2,517










893


2,517


Net obligations under finance leases


684


606










1,577


3,123

 

Bank loans and overdrafts include overdrafts totaling £1,067,569 (2009: £421,925) relating to subsidiary companies, which are secured by debentures over the assets of those companies.

 

Finance lease obligations are secured on the assets to which they relate.

 




Group




2010


2009




£000


£000








Borrowings are repayable as follows:












On demand or within one year


3,977


3,549


In the second year


1,263


1,906


In the third to fifth years inclusive


314


1,217










5,554


6,672








Finance leases included above are repayable as follows:












On demand or within one year


570


446


In the second year


386


311


In the third to fifth years inclusive


298


295










1,254


1,052








The net borrowings are:












Borrowings as above


5,554


6,672


Cash and cash equivalents


(2,083)


(957)








Net debt


3,471


5,715

 

11.       SHARE CAPITAL



2010


2009



No. of shares




No. of shares





'000


£000


'000


£000


Authorised









Ordinary shares of 25p each

40,000


10,000


40,000


10,000











Allotted, called up and fully paid









Ordinary shares of 25p each

16,508


4,127


14,543


3,635










During the year 97,295 shares (2009: 121,066) were issued with an aggregate nominal value of £24,324 (2009: £30,267) and were fully paid up for equivalent cash of £268,317 (2009: £228,418) to shareholders exercising their right to receive dividends under the Company's scrip dividend scheme.

 

A total of 167,504 (2009: £Nil) shares with an aggregate nominal value of £41,876 (2009: £Nil) were issued for a cash value of £373,884 (2009: £Nil) to relevant holders exercising options in the Company.

 

On the 2 June 2010, the Group conducted a placing of shares with institutional and other investors in which a total of 1,700,000 shares were issued for a total net cash receipt of £3,850,000.

 

12.       CASH GENERATED FROM/(USED IN) OPERATIONS

 



Group



2010


2009



£000


£000

Profits for the year


4,232


3,821

Adjustments for:





Tax


1,645


1,297

Depreciation of tangible fixed assets


2,182


1,892

Impairment of intangible fixed assets


292


-

Impairment of investment


69


-

Profit on disposal of property, plant and equipment


(56)


(43)

Interest income


(31)


(63)

Interest expense


412


609

Share of results of joint ventures


(185)


(184)

Loans made to joint ventures


(59)


400

Share based payments


182


24

Changes in working capital (excluding effects of acquisitions and disposals of subsidiaries):





(Increase)/decrease in inventories & biological assets


(3,750)


2,781

(Increase)/decrease  in trade and other receivables


(7,474)


4,959

Increase /(decrease) in payables


9,559


(4,771)

(Decrease)/increase in provisions


(151)


(474)






Cash generated from operations


6,867


10,248

 

13.       ANNUAL REPORT

 

The Annual Report and full Financial Statements will be posted to shareholders during the week commencing

7 February 2011. Further copies will be available to the public, free of charge, from the Company's Registered Office at Eagle House, Llansantffraid, Powys, SY22 6AQ or on the Company's website at www.wynnstay.co.uk. 

 

14.       ANNUAL GENERAL MEETING

 

The Annual General Meeting of the Company will be held at The Sovereign Suite at Shrewsbury Town Football Club, Oteley Road, Shrewsbury on 15 March 2011 at 11.45am.

 

 


This information is provided by RNS
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