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LONDON (Alliance News) - Specialist agricultural and distribution business NWF Group PLC Tuesday posted a drop in both profits and revenue for its last financial year, as warmer UK weather held back demand for its heating oils, although the company raised its dividend for the year.
The group reported a pretax profit of GBP6.9 million for the year ended May 31, down from GBP7.8 million a year earlier.
NWF said the profits in the year were held back by lower profits from its feeds business and its fuels division, which saw lower demand for heating oils on the back of a warm winter and spring. Its food division, on the other hand, delivered an increase in profits, supported by the signing of new long-term contracts.
Revenue in the year fell to GBP537.7 million, down 1.5% from GBP545.8 million a year earlier, on the back of lower oil prices and a slight decrease in overall fuel volumes.
NWF increased its dividend for the year by 6.3% to 5.1 pence per share, and said trading so far in its new financial year has been in line with expectations.
"Progress to date in the current financial year has been in line with the board's expectations with all divisions performing as planned. We continue to focus on development opportunities, both organic and through targeted acquisitions," said Chairman Mark Hudson in a statement.
NWF said its feeds division delivered a good performance, increasing volumes in the dairy and beef sectors, which more than offset lower levels of demand for sheep feed. It said volume growth was boosted by the acquisition of SC Feeds earlier in the year.
However, its fuels and food businesses both faced tough market conditions during the year.
"Market share increased in feeds following investment in sales and marketing. Food delivered a strong result through completing the planned restructuring and agreed long-term customer contracts to fill the Wardle facility. In spite of reduced demand for heating oil in the year resulting from the warm winter and spring, Fuels delivered a solid result through increasing sales of other products, particularly gas oil and focusing on operational efficiencies," the company said.
NWF said it is well funded for future expansion and working capital, supported by new GBP65 million banking facilities in place until October 2019.
NWF shares were up 0.3% at 149.00 pence per share mid-morning Tuesday.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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