Headline pre-tax profits at NWF, which excludes certain items, fell 4.9% to £9.7m for the 12 months to May 31, 2019, said the company.
The UK group’s overall revenue increased by 9.9% to £671.3m compared to the £611m in earnings recorded in the prior year. The revenue hike reflected increased activity and higher commodity prices, it said.
“It has been a strong result in 2019, outperforming original market expectations," said Richard Whiting, CEO NWF, on a webcast about the financial results.
The CEO noted feed demand volatility across the year, with high demand in the summer due to low forage availability, and then lower winter demand arising from the mild conditions and good forage supply, when commenting on the results for that division.
Pricing instability in feed was also evident in the past 12 months based on that demand variation, said Whiting.
“In feed, we have delivered stable performance in spite of volatile market conditions."
The company managed to deliver over 590,000 tons of feed to over 4,750 farmers throughout the UK, he added.
“Operational efficiency, both within our mills and in our transport network, has been critical,” stressed the CEO.
NWF reported that UK milk prices were stable at over 27p per liter, while milk production in the region was up 1.6% and ruminant feed market volumes were down 1.3%.
NWF Agriculture is a leading supplier of ruminant animal feed in the UK; it claims to feed one in six dairy cows in Britain. The business supplies farmers from Scotland to Cornwall. It has feed mills in Cumbria, Cheshire and Devon. It is mainly involved in supplying dairy feed, but also sells into the beef and sheep sectors in the UK.
Developmental strategy
Whiting said the company has a strong balance sheet and long-term funding in place to support future development:
“Turning to our development strategy, a few key things about NWF we have to remember, firstly we have a diversified source of earnings and, critically, we have a very good cash generative business. We have a very capable board and are very focused on strong shareholder return, and we have strong track record.
“In the fuel division, it is about consolidating a very fragmented market. In food, it is all about improving the operating efficiency of our warehouse space. In feed, it is all about consolidating the market, principally for dairy, and broadening the offer of products we supply to farmers up and down the UK,” said the CEO.
In relation to Brexit, he said NWF is operating in large, UK only, stable markets. “We are currently trading in line with the board’s expectations in all three businesses, so we continue to have confidence in the future developmental opportunities for the group.”