(Alliance News) - NWF Group PLC said Thursday it had a "good first half" and its board remains confident of delivering its full-year expectations, as it announced a big new contract and two recent acquisitions.
In the trading update for the half year ended November 30, the fuel, feed, and food distributor said it expects overall trading for the half year to be ahead of the prior year, with net debt as at November 30 in line with expectations.
In line with NWF's strategy to acquire Fuel businesses to expand the geographical footprint and grow market share, the company said it has completed two new acquisitions since its annual general meeting in September.
NWF acquired Caldo Oils Ltd, a 5 million litre business in the north west of England in October and Ron Darch & Sons Co Ltd, a 35 million litre distributor based in Yeovil in Somerset in December. It didn't say how much it paid for the two operations.
NWF Group said the two new acquisitions are expected to add around GBP500,000 million to the Fuels division's profit in the current financial year.
NWF's Food business has traded ahead of the prior year with increased storage and activity levels. It also announced a "significant expansion" of the food division after winning a new five-year contract with a "major food customer".
To support this contract and the "continued organic growth from a number of other customers", the company has signed a lease to operate an additional, newly constructed 240,000 square foot warehouse in Crewe, expected to be fully operational within six months.
It said the new warehouse will have initial start-up costs hitting the current financial year of GBP500,000, but it is expected to add to divisional profitability in the following financial year, ending May 2021.
The investments in the Fuel and Food divisions are expected to add GBP7.0 million to net debt, NWF said.
Richard Whiting, chief executive officer, said: "We had a good first half and are trading in line with our expectations. We remain confident in our growth potential and prospects."
The company will announce its half-year results for the six months ended November 30 on January 28.
In July, NWF had reported pretax profit for the 12 months to May 31 of GBP8.7 million, down 10%. Revenue growth had came from all three divisions - the third being Feeds - lifting overall revenue by 9.9% to GBP671.3 million.
NWF Group shares were up 1.6% in London at 157.00 pence each on Thursday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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