Last checked at 18 Jun 2008 07:00
WYN
WYNNSTAY GROUP PLC
("Wynnstay" or "the Group")
Interim Results for the six months to 30 April 2008
Based in Wales, Wynnstay supplies agricultural products and services to farmers, and operates a network of Country Stores. It has recently expanded into the pet products market, with the brand, "Just for Pets".
Key Points
Turnover rose by 46% to £116.46m (2007: £79.9m)
Operating profit rose by 55% to £3.33m (2007: £2.15m)
Pre-tax profit rose by 51% to £2.958m (2007: £1.963m)
Basic eps rose by 42% to 17.71p (2007: 12.43p)
Net assets increased by 19% to £31.81m (2007: £26.83m)
Interim dividend of 2.00p (2007: 1.875p)
Agricultural businesses traded strongly, benefiting from diversified spread of activities
- improved farm gate prices providing confidence to farmers, especially in arable and dairy sectors
Country Stores performed well with good like-for-like growth
Acquisition of pet superstores chain, Wilsons Pet Centres, in January 2008:
- major step in establishing a large scale pet products retailing arm
- three month contribution to results
New chief executive, Ken Greetham, assumed position in May 2008
Board remains confident about growth prospects for current year and beyond
Ken Greetham, Chief Executive, commented,
"Trading in the first six months of the financial year has been good across both our agricultural business and retail operations. These strong results reflect the strength of our diversified business model as well as the benefit of the acquisitions we made last year.
It is pleasing to see our Country Stores improve like-for-like sales, resulting from a combination of improved product range in our stores and greater discretionary spending by arable and dairy farmers.
The acquisition of pet superstores chain, Wilsons Pet Centres, in January, represented a major step forward in our objective to establish a large scale pet product retailing business. Trading across the pet stores to date has been very strong and appears to be highly resistant to the general downturn in consumer spending.
The general outlook for the business remains positive, with improved farm gate prices and emerging markets for agricultural produce giving a more promising outlook for the industry.
The business enjoys a strong financial base and we see good opportunities for continuing growth as we pursue our twin track strategy of acting as a consolidator in agricultural supplies and developing our retailing activities, especially in the pet products market."
Enquiries:
| Wynnstay Group plc | Ken Greetham, Chief Executive | T: 020 7448 1000 today |
| Paul Roberts, Finance Director | Thereafter: 01691 828512 | |
| Biddicks | Katie Tzouliadis Sophie Lane | T: 020 7448 1000 |
| WH Ireland Limited (NOMAD) | David Youngman Stuart Forshaw | T: 0161 832 2174 |
| Shore Capital | Guy Peters | T: 020 7408 4090 |
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report strong trading results for the first six months of the financial year ending 31 October 2008. Our diversified spread of activities enabled us to achieve maximum advantage from a trading backdrop which combined both rising commodity prices and costs.
Within our Agricultural operations, our decision to buy animal feed ingredients early placed us in a good position to offer commercially attractive feed contracts. As a result, we gained market share and demand was strong particularly into the latter half of the winter, on the back of good milk prices. Within our arable business, rapidly increasing fertiliser prices resulted in buoyant demand as farmers bought ahead of further price rises. While demand moderated in the second quarter, the significant escalation in fertiliser prices and tightening supplies allowed us to improve margins and our fertiliser manufacturing plant within Glasson Group contributed strongly to results from this activity.
Within our Retail operations, the highlight during the first half was the acquisition of Wilsons Pet Centres Limited in January 2008. Comprising 10 pet superstores, based in the West Midlands, the acquisition represented a major step in our strategy to establish a large scale pet products retailing business. The business made a three month contribution to results and we have started the process of its integration within the Group. Elsewhere within our Retail operations, our network of Country Stores traded well, with results boosted by contributions from the acquisitions we made in the latter half of the last financial year.
FINANCIAL RESULTS
The Group's revenue rose by 46% to £116.46m (2007: £79.90m), with our agricultural supplies businesses seeing a 48% increase in revenue to £94.30m (2007: £63.63m) and revenues from our retail operations increasing by 37% to £22.09m (2007: £16.18m). The Group's operating profit increased by 55% to £3.33m (2007: £2.15m), with the contribution from the agricultural supplies businesses rising by 66% to £2.27m (2007: £1.37m) and operating profit at the retail operations increasing by 45% to £1.03m (2007: £0.71m).
Pre-tax profits rose by 51% to £2.96 (2007: £1.96m) and basic earnings per share increased by 42% to 17.71p, benefiting from a lower tax rate (2007: 12.43p).
Net assets at 30th April 2008 stood at £31.8m, up from £26.83m last year, a rise of 18.5%.
DIVIDEND
The Board continues to pursue a progressive dividend policy and is pleased to declare an interim dividend of 2.00p per share, representing a 6.7% increase on last year (2007: 1.875p). The interim dividend will be paid on 31 October 2008 to shareholders on the register on 3 October 2008. A scrip dividend alternative will be available.
REVIEW OF OPERATIONS
AGRICULTURE
Feed Products
Demand for feed during the period has been strong, with the key issue being the management of rapidly increasing raw material costs. Our decision to purchase ingredients early gained us significant new business. This was especially evident in the dairy sector, where feed volumes grew by 48%, helped by increased milk prices which are giving confidence to producers. Sheep feed sales declined, despite strong demand in April due to inclement weather. However, this partly reflected our policy to build a more balanced feed business throughout the year by encouraging dairy tonnage, where there is a more even pattern of demand. Sales of blended feeds were adversely affected by more favourable pricing for compound feeds. However, we believe this will reverse itself in the second half of the year and we have capacity in our plants to meet anticipated demand.
We increased sales of poultry feeds, particularly to our free range egg producing group, which continues to expand its producer base and gain market share for its high quality speciality eggs. We anticipate that demand for more welfare-friendly, free range egg production systems will continue to increase at the expense of the less acceptable battery cage systems and this will generate increased demand for our specialist poultry feed.
Our raw material trading business grew its volumes considerably and managed a very volatile pricing period with great skill. The management of the raw material book was a key factor in enabling us to maintain our competitive position in the dairy feed market.
Arable Products
Fertiliser sales were extremely strong in the first quarter as farmers sought to buy ahead of escalating prices. However, much of the growth tailed off at the end of the first half due to further rapid price increases. Our Glasson fertiliser business benefited from greater demand and from having a long purchase book for fertiliser raw materials ahead of the season. We now have the dual benefit of being both a major distributor for GrowHow, the largest producer of fertiliser in the United Kingdom, and operating our own production facility. This is helpful as strong world demand for fertiliser has led to a tight supply situation in the UK. With tightening supply, margins have also improved.
The ongoing favourable conditions for arable farmers will underpin future demand for fertiliser although we expect livestock producers to reduce their usage wherever possible.
There was a good demand for spring cereal seeds following on from excellent autumn sales. Our production sold out early in the season and we are very optimistic for the important autumn market as demand for cereal crops remains strong.
Shropshire Grain traded well in the period, increasing volumes and managing price volatility to maximum effect. Wheat prices have begun to fall and this is an indication that some of the speculative element is now leaving the market. Shropshire Grain benefits from long term contracts with major processors and we expect a successful second half.
RETAIL
Country Stores
Sales from our network of traditional Country Stores grew by 29.5%, boosted by the acquisitions we made during the latter half of the last financial year. On a like-for-like basis, sales increased by 13.5%. Sales were particularly strong in animal health care products, equine and pet products, where we have been gaining market share, helped by our acquisition policy. Early in the first half, we added three further stores with the acquisition of Wrekin Country Stores and J Hatton Agriculture. These acquisitions enhance our presence in our existing geographic markets, especially within the important livestock area of Lancashire. The opening of a new store at Llansantffraid in December 2007, which also incorporates a Spar convenience outlet, has been very successful and the store exceeded its budgeted performance.
We are continuing with our store refurbishment programme and relocated our store at St Asaph, in North Wales, to a larger facility and incorporated a substantially improved pet products offering. Store refurbishments will continue in the second half, on a selective basis, to improve and streamline our offer.
Pet Products
The acquisition of Wilsons Pet Centres, in January 2008, was a major highlight in the period. The business, which comprised of 10 pet superstores, moved us forward significantly in our objective of developing a substantial stand-alone pet product retailing business. We are currently in the process of re-branding the stores under our own 'Just for Pets' trade name and this is going well. Sales are currently some 13% ahead of the comparable period last year and above budget, which we find very encouraging. Furthermore, we are beginning to see the benefits of our increased purchasing power for pet products impact our retail business as a whole and we are substantially improving our pet related offering in our Country Stores. We are also trialling the use of the 'Just for Pets' brand in some of our retail outlets and I am pleased to report that the initial pilot scheme has proved to be very successful.
Horticulture
The late spring resulted in a very slow start for our horticulture business, Foxmoor. However, sales in May improved and we will be launching an online discount plant offer as well as continuing to act as a facilitator to several TV shopping channels for packing and dispatch to their customers.
JOINT VENTURES AND ASSOCIATE
Wyro Developments Ltd
We have almost fully sold the residential developments at our two sites in Mid Wales and have opened for sale a similar development at Newtown, Powys, where our offer remains value-for-money, low cost, quality housing. While interest in the new site is strong, the lack of mortgage availability is affecting sales. As this problem eases, we are confident that the underlying strong demand for the type of properties we are offering will translate into sales. We are continuing to look for other sites to add to our land bank and are in a strong position to purchase further sites at competitive prices.
Youngs Animal Feeds Ltd
Youngs has enjoyed an excellent period with much improved sales and profits. The consolidation of our manufacturing facilities onto one site in Staffordshire, producing Molichop high fibre horse feeds, has increased efficiencies and the plant is currently working to capacity. Further improvements to the site are planned in order to take advantage of increasing demand. In addition, Youngs will increase its supply of products to our retail outlets.
Welsh Feed Producers
The feed mill in South Wales operated more efficiently during the winter, benefiting from the extensive capital expenditure undertaken in the previous year. However, margin pressures in the latter half of the winter have caused some problems which will impact on this year's financial result.
Wynnstay Fuels (Associate Company)
There has been strong demand for fuel despite the huge price increases experienced recently and the company has been able to improve margins. We note that many of our competitors are experiencing huge pressures regarding working capital demands and believe that this will result in opportunities for acquisitions in the sector in the future.
BOARD CHANGES
As announced previously, at the end of May 2008, Bernard Harris retired as Managing Director, after 28 years with the Group, and Ken Greetham assumed the role of Chief Executive. There were also two other changes to the composition of the Board in May, when Roger Griffiths, Commercial Director, retired and we appointed Andrew Evans, General Manager of Wynnstay's Retail operations as Retail Director.
On behalf of the Board, I would like to take this opportunity, once again, to thank Bernard for his enormous contribution to the business over many years as Managing Director. I would also like to thank Roger for his hard work and commitment which has been much appreciated by us all.
OUTLOOK
Rapid inflation and cost increases remain a real challenge going forward. However, farm gate prices are stronger than they have been for some years and food price inflation is presently a fact of life. This, together with emerging markets for agricultural produce, gives a more promising outlook for the industry.
Within our Agricultural businesses, demand for our products remains strong. However, there is some price resistance, which will result in volume challenges for some inputs, such as fertiliser, going forward. Against that, margins have improved, and the process of cost recovery is continuing.
Some of the gains we have enjoyed in inventory values in the first half will not be available to us in the second half, particularly in our trading activities. However, this should be compensated for by a greater added value income in feed manufacturing and distribution.
Our Retail business is continuing to experience good demand, both across our Country Stores and Pet Stores. Growth in our pet retailing operations is especially strong and this activity appears to be highly resistant to the general downturn in the high street. With the rise in farm gate incomes, we are also seeing greater levels of discretionary spend by farmers, which is encouraging.
We remain committed to our twin track approach to growth and will continue to act as an agricultural consolidator whilst expanding our retail business, especially our pet retailing activities, both organically and by acquisition. The strong financial base the business enjoys means that we are in a good position to take advantage of some of the pressures that many of our competitors are experiencing in the agricultural sector.
The Board remains confident about growth prospects for the current financial year and beyond into 2009. We believe that the general agricultural and commodity outlook remains positive and are, as ever, well placed to act on the opportunities that will undoubtedly present themselves over the coming months.
J.E. Davies
Chairman
CONDENSED, CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30TH APRIL 2008
| Unaudited six months ended 30th April 2008 | Unaudited six months ended 30th April 2007 | Audited year ended 31st October 2007 | ||
|
| Note | £'000 | £'000 | £'000 |
| Revenue from continuing operations | 116,462 | 79,899 | 157,047 | |
| Cost of sales | (100,901) | (67,398) | (133,832) | |
| Gross Profit | 15,561 | 12,501 | 23,215 | |
| Selling and distribution costs | (10,887) | (9,109) | (17,553) | |
| Administrative expenses | (1,341) | (1,247) | (2,535) | |
| Goodwill impairment | 0 | 0 | (257) | |
| Operating profit | 3,333 | 2,145 | 2,870 | |
| Net finance costs | (375) | (182) | (355) | |
| Share of profits/losses in associates and joint ventures | 2 | 0 | 0 | 732 |
| Share of tax incurred in associates and joint ventures |
| 0 | 0 | (184) |
| Profit before Tax | 2,958 | 1,963 | 3,063 | |
| Taxation | 4 | (661) | (530) | (751) |
| Profit for the period |
| 2,297 | 1,433 | 2,312 |
| Earnings per share - Basic | 5 | 17.71p | 12.43p | 19.63p |
| - Diluted | 5 | 17.60p | 11.86p | 18.89p |
CONDENSED, CONSOLIDATED BALANCE SHEET AS AT 30TH APRIL 2008
| Unaudited as at 30th April 2008 | Unaudited as at 30th April 2007 | Audited as at 31st October 2007 | ||
|
| Note | £'000 | £'000 | £'000 |
| Assets | ||||
| Non-current assets | ||||
| Goodwill | 7,930 | 3,156 | 3,614 | |
| Investments - equity method | 3,539 | 3,412 | 3,972 | |
| Property, plant and equipment | 12,836 | 10,949 | 11,534 | |
|
|
|
|
|
|
|
|
| 24,305 | 17,517 | 19,120 |
| Current assets | ||||
| Inventories | 13,096 | 9,957 | 9,186 | |
| Biological Assets | 1,652 | 1,655 | 1,675 | |
| Trade and other receivables | 37,637 | 28,160 | 24,476 | |
| Financial assets : - loans to joint ventures | 3,802 | 4,630 | 4,852 | |
| - cash and cash equivalents | 1,717 | 480 | 722 | |
|
|
|
|
|
|
|
|
| 57,904 | 44,882 | 40,911 |
| Liabilities | ||||
| Current liabilities | ||||
| Trade and other payables | (29,610) | (21,765) | (23,050) | |
| Financial liabilities : - borrowings | (12,991) | (9,724) | (4,763) | |
| Current tax liabilities | (1,449) | (496) | (435) | |
|
|
|
|
|
|
|
|
| (44,050) | (31,985) | (28,248) |
| Net current assets |
| 13,854 | 12,897 | 12,663 |
| Non-current liabilities | ||||
| Financial liabilities : - borrowings | (5,803) | (3,028) | (2,843) | |
| Deferred tax liabilities | (551) | (561) | (551) | |
|
|
| (6,354) | (3,589) | (3,394) |
|
|
|
|
|
|
| Net assets |
| 31,805 | 26,825 | 28,389 |
| Equity | ||||
| Ordinary shares | 6 | 3,292 | 2,933 | 3,125 |
| Share premium | 10,023 | 7,976 | 8,597 | |
| Other reserves | 1,778 | 1,582 | 1,778 | |
| Retained earnings | 16,712 | 14,334 | 14,889 | |
|
|
|
|
|
|
| Total equity |
| 31,805 | 26,825 | 28,389 |
CONDENSED, CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
| Share capital | Share premium | Other reserves | Profit & loss reserve | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
|
|
|
|
|
| |
| Balance at 1 November 2006 | 2,867 | 7,673 | 1,582 | 13,309 | 25,431 |
| Net profit | 1,433 | 1,433 | |||
| Equity dividend paid | (408) | (408) | |||
| Shares issued | 66 | 303 | 369 | ||
| Total shareholders equity at 30 April 2007 | 2,933 | 7,976 | 1,582 | 14,334 | 26,825 |
| Restatement re adoption of IFRS | (89) | (89) | |||
| Net profit | 879 | 879 | |||
| Equity dividend paid | (235) | (235) | |||
| Shares issued | 192 | 621 | 813 | ||
| Adjustment in respect of share based payments | 196 | 196 | |||
|
|
|
|
|
|
|
| Balance at 31 October 2007 | 3,125 | 8,597 | 1,778 | 14,889 | 28,389 |
| Net profit | 2,297 | 2,297 | |||
| Equity dividend paid | (474) | (474) | |||
| Shares issued | 167 | 1,426 | 1,593 | ||
|
|
|
|
|
|
|
| Total shareholders equity at 30 April 2008 | 3,292 | 10,023 | 1,778 | 16,712 | 31,805 |
CONDENSED, CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30TH APRIL 2008
| Unaudited six months ended 30th April 2008 | Unaudited six months ended 30th April 2007 | Audited year ended 31st October 2007 | ||
|
| Note | £'000 | £'000 | £'000 |
| Cash flow from operating activities | ||||
| Cash (used in) / generated from operations | 9 | (4,803) | (5,914) | 1,447 |
| Interest received | 78 | 120 | 287 | |
| Interest paid | (453) | (302) | (653) | |
| Tax repaid / (paid) | 118 | (331) | (686) | |
| Net cash (used in) / generated from operating activities |
| (5,060) | (6,427) | 395 |
| Cash flows from investing activities | ||||
| Acquisition of subsidiaries, (net of cash acquired) | (4,209) | 0 | (769) | |
| Purchase of property, plant and equipment |
| (1,109) | (689) | (1,532) |
| Purchase of intangible assets | (313) | (12) | (114) | |
| Proceeds on sale of property, plant and equipment | 52 | 307 | 375 | |
| Proceeds on sale of investments | 595 | 0 | 0 | |
| Purchase of investments | (162) | (78) | (91) | |
| Dividends received | 0 | 0 | 11 | |
| Net cash used in investing activities | (5,146) | (472) | (2,120) | |
| Cash flows from financing activities | ||||
| Proceeds from the issue of share capital | 1,593 | 369 | 1,182 | |
| Repayments of borrowings | (884) | (595) | (1,501) | |
| Net proceeds from drawdown of new loans | 4,490 | 1,863 | 2,663 | |
| Finance lease principal re-payments | (212) | (150) | (434) | |
| Dividends paid | (474) | (408) | (643) | |
| Net cash generated from financing activities | 4,513 | 1,079 | 1,267 | |
| Net decrease in cash and cash equivalents | (5,693) | (5,820) | (458) | |
| Cash and cash equivalents at beginning of period | (1,154) | (696) | (696) | |
| Cash and cash equivalents at end of period | (6,847) | (6,516) | (1,154) |
NOTES TO THE CONDENSED, CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Basis of preparation.
The Interim Report was approved by the Board of Directors on 17th June 2008.
The condensed financial statements for the six months to the 30th April 2008 have been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") and in accordance with International Accounting Standards (IAS) 34 Interim Financial Reporting.
The financial information for the Group for the year ended 31st October 2007 set out above is an extract from the published financial statements for that year which have been delivered to the Registrar of Companies. The auditors report on those financial statements was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The information contained in this document does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985.
The financial information for the six months ended 30th April 2008 and for the six months ended 30th April 2007 is unaudited.
The group prepares its consolidated financial statements in accordance with IFRS, and the statements have been prepared using the accounting policies set out in the Group's 2007 statutory accounts.
2. Consolidation of share of results of profits in joint ventures & associates.
As the Group has a policy of using audited accounts for the consolidation of its share of the profits of joint venture & associate activities, no such consolidation has occurred during the six months to April 2008. Relevant results will be accounted for during the second half of the financial year.
3. Significant accounting policies
The condensed financial statements have been prepared on a historical cost basis or fair value basis as appropriate.
The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in preparing the Group's financial statements for the year ended 31 October 2007.
4. Taxation.
The tax charge for the six months to 30th April 2008 is based on an apportionment of the estimated tax charge for the full year.
5. Earnings per Share.
Earnings per share have been calculated based on the profit attributable to ordinary shareholders of £2,297,000 (six months ended 30 April 2007: profit of £1,433,000) and the weighted average number of shares in issue of 12,971,238 (2007: 11,526,432). Diluted earnings per share are based on the aggregate weighted average number of shares and all potential shares, adjusted for the proposed issue price, of 13,045,988 (2007: 12,080,448).
6. Share capital.
During the current period a total of 669,201 (2007: 263,957) shares were issued with an aggregate nominal value of £167,300 (2007: £65,990) fully paid up for equivalent cash of £1,592,808 (2007: £369,402). Included in these issues were 56,201 (2007: 64,517) shares allotted to shareholders exercising their rights to receive dividends under the Company's scrip dividend scheme and 120,000 shares (2007: nil) allotted to holders of Warrants in the Company. At the date of this report a total of 13,169,960 shares are in issue.
7. Dividends
In the period an amount of £473,737 (2007:£408,336) was charged to reserves. An interim dividend of 2p per share will be paid on 31st October 2008 to shareholders on the register on 3rd October 2008.
8. Segmental reporting.
The Group's primary reporting format is business segments. A business segment is a component of the Group that is engaged in providing a group of related products and is subject to the risks and returns that are different from other business segments. The Group operates in one geographical segment being the UK.
| The segment results for the period ended 30th April 2008 are as follows : | Agricultural Supply | Retail | Other | Total | |||
| £'000s | £'000s | £'000s | £'000s | ||||
| Unaudited as at 30th April 2008 : | |||||||
| Revenue | 94,302 | 22,087 | 73 | 116,462 | |||
| Operating result | 2,269 | 1,032 | 32 | 3,333 | |||
| Share of result of associates & joint ventures | 0 | 0 | 0 | 0 | |||
| 2,269 | 1,032 | 32 | 3,333 | ||||
| Net interest | (375) | ||||||
| Profit before tax | 2,958 | ||||||
| Taxation | (661) | ||||||
| Profit for the year attributable to shareholders | 2,297 | ||||||
| Unaudited as at 30th April 2007 : | |||||||
| Revenue | 63,633 | 16,180 | 86 | 79,899 | |||
| Operating result | 1,369 | 713 | 63 | 2,145 | |||
| Share of result of associates & joint ventures | 0 | 0 | 0 | 0 | |||
| 1,369 | 713 | 63 | 2,145 | ||||
| Net interest | (182) | ||||||
| Profit before tax | 1,963 | ||||||
| Taxation | (530) | ||||||
| Profit for the year attributable to shareholders | 1,433 | ||||||
| Audited as at 31st October 2007 : | |||||||
| Revenue | 122,133 | 34,627 | 287 | 157,047 | |||
| Operating result | 1,832 | 1,311 | (273) | 2,870 | |||
| Share of result of associates & joint ventures | 194 | 26 | 512 | 732 | |||
| 2,026 | 1,337 | 239 | 3,602 | ||||
| Net interest | (355) | ||||||
| Profit before tax | 3,247 | ||||||
| Taxation | (935) | ||||||
| Profit for the year attributable to shareholders | 2,312 | ||||||
9. Cash (used in) / generated from operations.
|
| |||
| Unaudited as at 30th April 2008 | Unaudited as at 30th April 2007 | Audited as at 31st October 2007 | |
|
| £'000s | £'000s | £'000s |
| Net profit | 2,297 | 1,433 | 2,312 |
| Adjustments for: | |||
| Taxation | 661 | 530 | 935 |
| Depreciation of tangible fixed assets | 696 | 673 | 1,269 |
| Amortisation of other intangible fixed assets | 0 | 0 | 257 |
| Profit on disposal of property, plant and equipment | (12) | (156) | (160) |
| Interest expense | 453 | 302 | 653 |
| Interest income | (78) | (120) | (298) |
| Share based payments | 0 | 0 | 89 |
| Share of results of joint ventures before tax | 0 | 0 | (732) |
| Loans made to joint ventures | 1,050 | (1,880) | (2,102) |
| Changes in working capital (excluding effects of acquisitions and disposals of subsidiaries | |||
| (Increase) / decrease in inventories & biological assets | (3,124) | (1,986) | (1,018) |
| (Increase) / decrease in trade and other receivables | (12,610) | (8,652) | (4,537) |
| Increase / (decrease) in payables | 5,864 | 3,942 | 4,779 |
| Increase / (decrease) in provisions | 0 | 0 | 0 |
|
|
|
|
|
| Cash (used in) / generated from operations | (4,803) | (5,914) | 1,447 |
10. Business Combinations
During the period the Group has completed three acquisitions and details of the trade, assets acquired, price paid and trading during the period are provided below:
| Other Acquisitions | Wilsons Pet Centres Ltd. | Total | |||
| Date of acquisition | 4th Jan 2008 | 11th Jan 2008 | |||
| £'000s | £'000s | £'000s | |||
| Fair value of acquisition: | |||||
| Property, plant & equipment | 70 | 634 | 704 | ||
| Cash & cash equivalents | 0 | 195 | 195 | ||
| Other current assets | 360 | 1,313 | 1,673 | ||
| Other current liabilities | 0 | (881) | (881) | ||
| Net assets acquired | 430 | 1,261 | 1,691 | ||
| Goodwill arising on acquisition | 313 | 4,003 | 4,316 | ||
| Consideration | 743 | 5,264 | 6,007 | ||
| Consideration satisfied by: | |||||
| Cash paid | 530 | 4,298 | 4,828 | ||
| Expenses | 13 | 106 | 119 | ||
| Deferred consideration | 200 | 860 | 1,060 | ||
| 743 | 5,264 | 6,007 | |||
| Revenue in period | 1,057 | 1,886 | 2,943 | ||
| Operating profit in period | (10) | 143 | 133 | ||
Other acquisitions represent the purchase of the goodwill and certain assets from Wrekin Country Stores on 10th December 2007 and the goodwill and certain assets of J. Hatton Agriculture on 4th January 2008.
11. Other reserves
Included in Other reserves are share based payments: The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of the grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. The Group operates a number of share option and Save As You Earn schemes and Fair Value is measured by use of a recognised valuation model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
12. Group financial commitments
There have been no material changes to the Group's contingent liabilities in respect of the guaranteed bank overdrafts of its four associated undertakings and joint ventures.
13. Related Parties
Transactions between the company and its subsidiaries, which are related parties have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures and associates are described below:
| Transaction value | Balance outstanding | |||||
| Six months to 30 April 2008 | Six months to 30 April 2007 | Year to 31 October 2007 | Six months to 30 April 2008 | Six months to 30 April 2007 | Year to 31 October 2007 | |
| Sales of goods to joint ventures and associates | 2,282 | 971 | 2,270 | 974 | 217 | 387 |
| Purchases of goods from joint ventures and associates | 2,942 | 2,483 | 3,746 | 1,910 | 1,584 | 1,637 |
| Interest receivable from joint ventures and associates | 50 | 122 | 287 | 50 | 122 | 0 |
Sales of goods to related parties were made at the Group's usual list prices, less average discounts. Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationship between parties.