RNS Number : 4928O

Wynnstay Group PLC

01 February 2023


Wynnstay Group Plc

("Wynnstay" or the "Group" or the "Company")

Final Results

For the year ended 31 October 2022

Record results and well-positioned for FY 2023



-- Record results reflect a strong trading performance and substantial one-off gains arising from macroeconomic events (which management does not believe will be repeated)

-- Revenue up 42% to GBP713.03 m (2021: GBP500.39m), primarily the impact of commodity inflation

   --      Underlying Group PBT* (incl. one-off gains) up 98% to GBP22.61m (2021: GBP11.44m) 
   --      Reported pre-tax profit up 92% to GBP21.12m (2021: GBP10.99m) 
   --      Basic EPS up 86% to 82.72p (2021: 44.40p) 
   --      Net cash up 53% to GBP14.15m (31 Oct 2021: GBP9.24m) 

-- Net assets up 24% to record GBP130.70m or GBP6.31 per share (2021: GBP105.72m /GBP5.25 per share)

   --      Successful GBP10.3m (net) equity placing in August 2022 supports ongoing growth plans 

-- Proposed final dividend of 11.60p (2021: 10.50p); total dividend up 9.7% to 17.00p (2021: 15.50p)

o 19(th) consecutive year of dividend increases


-- Agriculture Division - revenue up 57% to GBP564.26m (2021: GBP358.96m), segmental profit contribution up 247% to GBP14.66m (2021: GBP4.22m)

o one-off gains from impact of global events on fertiliser operations, with raw material stock values at Glasson substantially boosted by natural gas prices and constricted supply, and very strong contribution from merchanted fertiliser sales even on lower volumes

o feed volumes up by 6%, ahead of national market trends

o grain marketing activity, GrainLink, traded record volumes

o total seed sales decreased, reflecting seasonal factors and exit from lower-margin cereal seed sales, but grass seed performance was ahead of national trend

-- Specialist Agricultural Merchanting Division - revenue up 5% to GBP148.77m (2021: GBP141.43m) segmental profit contribution up 11% to GBP7.95m (2021: GBP7.15m)

o performance better than expected, boosted by strong bagged feed sales and efficiencies

o continued investment in depot network and staff training

   --      Joint Venture businesses contributed ahead of management expectations 

-- Humphrey acquisition is integrating well and contributed in line with management expectations at time of purchase in March 2022. It has added increased feed manufacturing capacity and further growth opportunities

-- Investment in seed processing facility at Astley completed and major investment programme at feed plant at Carmarthen started

   --      ESG strategy supported by the establishment of a Sustainable Farm Advisory Team 


-- Post period acquisition of Tamar Milling Ltd, animal feed business based in Cornwall, in November 2022, extends geographic footprint, farmer customer base and manufacturing capacity

-- Board believes Wynnstay remains well-positioned to attain its growth targets despite the economic headwinds

* Underlying pre-tax profit is a non-GAAP (generally accepted accounting principles) measure and is not intended as a substitute for GAAP measures and may not be calculated in the same way as those used by other companies. Refer to Note 15 for an explanation on how this measure has been calculated and the reasons for its use.

Gareth Davies, Chief Executive of Wynnstay Group plc, commented:

"These results are exceptional and set record highs across all key financial measures. While global events have driven substantial one-off financial gains that we do not expect to repeat, the Group in any case traded very strongly, helped by strong farmgate prices and growth and efficiency initiatives.

"We also made excellent progress with our strategic growth plans. The Humphrey acquisition has significantly expanded our geographic trading area and added feed manufacturing capacity, creating further growth opportunities. Our recent acquisition in November 2022 of Tamar Milling further extends our trading footprint, and we continue to drive investment in capacity, efficiency, and staff across the Group.

"Trading in the new financial year to date has been in line with expectations. While there are economic headwinds, we remain confident of achieving our growth targets."


 Wynnstay Group Plc     Gareth Davies, Chief        T: 020 3178 6378 (today) 
                         Executive                   T: 01691 827 142 
                         Paul Roberts, Finance 
 KTZ Communications     Katie Tzouliadis / Robert   T: 020 3178 6378 
                         Morton / Dan Mahoney 
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  and Broker)            More / Rachel Goldstein 



The Group performed strongly during the year and trading results set new record highs across all key financial measures. It should be noted that results benefited substantially from some singular gains that we do not expect to be repeated in the new financial year.

Underlying pre-tax profit* (which includes these gains) rose by 98% to GBP22.61m (2021: GBP11.44m) and revenues increased by 42% to GBP713.03m (2021: GBP500.39m), with significant inflation primarily driving the uplift in revenue. Reported profit before taxation was GBP21.12m (2021: GBP10.99m). Basic earnings per share, including non-recurring items, rose by 86% to 82.72p (44.40p).

These exceptionally strong results are significantly ahead of initial market expectations. They reflect a combination of factors; the benefits of growth and efficiency initiatives, farmer confidence, which was underpinned by strong farm gate prices across most sectors, but also significant one-off gains, in particular, stock gains in our fertiliser activity, which we do not believe will be repeated.

The advantages of the Group's diversified business model, with its broad spread of products across agricultural supplies, was again evident, with less robust sub-sectors offset by more positive sector performances elsewhere.

Both Divisions contributed increased revenue and operating profit, with almost all the Group's exceptional performance delivered by the Agricultural Division. In this Division, feed volumes were c.6% higher than last year and ahead of industry trends, and arable activities benefited from record commodity prices and a good 2022 harvest. Grain trading at GrainLink, our grain marketing activity, reached record volumes and its contribution also benefited from a significant one-off, non-cash gain at the end of the financial year that has since unwound, as previously announced. Total seed volumes reduced modestly, reflecting seasonal factors although the decrease in cereal volumes also reflected our decision to reduce the number of low-margin wholesale cereal seed trades. In line with industry trends, fertiliser volumes were significantly lower than last year, which reflected the extreme rise in prices created by the highly disrupted natural gas market. These market conditions however also drove very significant stock gains at Glasson Grain Limited ("Glasson"), resulting in an exceptional performance, not expected to be repeated.

The Specialist Agricultural Merchanting Division performed very well, helped by increased efficiency and strong branded bagged feed sales. The unusually dry summer dampened demand for some product lines. We continued to invest in and optimise our depot network, including closing a depot at Bethania in mid-Wales, while successfully transferring sales to neighbouring sites.

Our Joint Venture businesses, Bibby Agriculture Limited, which provides feed and forage products, and WYRO Developments Limited, which develops residential homes, both contributed to the Group's outperformance, delivering significantly higher contributions than originally expected .

The acquisition of the Humphrey Poultry (Holdings) Ltd ("Humphrey") businesses based in Hampshire in March for an expected final consideration of GBP12.1m net of cash acquired, was a strategic highlight in the year. In mid-November 2022, just after the financial year end, we also acquired Tamar Milling Limited ("Tamar"), a manufacturer and supplier of blended and coarse mix feed products based in Cornwall, for an initial consideration of up to GBP1.5m. Both acquisitions are earnings enhancing. In August 2022, we also raised GBP10.3m net, via an equity placing to UK institutional shareholders and these new funds will support our ongoing acquisition and organic growth strategy.

* Underlying pre-tax profit is a non-GAAP measure and is not intended as a substitute to GAAP measures. Refer to Note 15 for a reconciliation on the calculation of this measure and the reasons for its use.


Wynnstay's growth strategy is centered on three key pillars, organic and acquisitive growth, a multi-channel sales approach, and Environmental, Social and Governance ("ESG"). At the forefront of the Board's thinking is our customer base of arable and livestock farmers. We aim to ensure that the Group continues to provide them with trusted advice, a wide range of products and services that cater for their changing needs, and high customer service. Ultimately, our objective is to support farmers to grow food profitably, sustainably and in an environmentally enhancing manner.

Against the context of our growth strategy, I am very pleased to highlight progress in the following areas in particular:

   --      Organic and acquisitive growth 

o Our acquisitions of the Humphrey business and Tamar have significantly expanded the Group's trading footprint. They have materially extended our presence in the South of England as well as in the Midlands and Wales, bringing new farmer customer bases as well as additional supply chain relationships.

o Both businesses have increased our feed manufacturing capability, with the additional capacity also opening up the opportunity to implement operational efficiencies.

o The Humphrey business has significantly increased our market share in poultry feed for free-range egg production, boosting our market share to an estimated c.11% from c.6%.

o We completed our investment projects at our seed processing plant at Astley, which have added new capability and improved efficiency.

o Organic growth also continues to be supported by our investment in our specialist advisory services. Our two industry events , The Arable Event and The Beef and Sheep Event, which resumed in person in the year, also serve to support technical knowledge transfer to farmers across our trading regions and were very well attended.

   --      Multi-channel 

o Increased numbers of customers have now registered for our digital portal, typically using it to access their accounts. While farmers' purchasing habits remain strongly aligned towards depot-based purchases rather than digital purchases, we nonetheless continue to monitor buying patterns closely as we further develop our multi-channel sales strategy.

   --      ESG 

o Our ESG work continued to evolve and we established a Sustainable Farm Advisory Group in the year. It is made up of recognised industry leaders, who are assisting us in the development our ESG strategy and delivery plans.

o We launched a Holistic Whole Farm Solution in the year and further advanced our offering of climate-friendly feeds.

o We intend to invest in on-site solar arrays, which will provide the dual benefits of reducing the Group's carbon footprint and its exposure to the wholesale energy markets.


Group revenue increased by 42% year-on-year to GBP713.03m (2021: GBP500.39m). This rise reflected significant commodity inflation, with the Humphrey acquisition making a first-time partial revenue contribution of GBP31.58m.

Underlying Group pre-tax profit, the Board's alternative performance measure, rose by 98% to a record GBP22.61m (2021: GBP11.44m) over the year. This includes the one-off trading gains (which we do not believe will be repeated), gross share of results from joint ventures but excludes share-based payments and non-recurring items. Reported pre-tax profit increased by 92% to GBP21.12m (2021: GBP10.99m). Basic earnings per share increased by 86% to 82.72p (2021: 44.40p).

Both Divisions contributed to revenue and profit growth, with the Agricultural Division delivering a 57% uplift in revenues to GBP564.26m (2021: GBP358.96m), and the Specialist Agricultural Merchanting Division a 5% rise to GBP148.77m (2021: GBP141.43m). The segmental profit contribution from the Agriculture Division increased by 247% year-on-year to GBP14.66m (2021: GBP4.22m), with the Specialist Agricultural Merchanting Division contributing GBP7.95m (2021: GBP7.15m), an 11% rise.

The Group generates good operational cash flows, with cash generated from operations being GBP13.84m (2021: GBP10.57m) despite the challenges of working capital inflation.

Cash and cash equivalents at 31 October 2022 increased by 53% to GBP14.15m (2021: GBP9.24m). October typically represents the highest point of net cash in the Group's annual working capital cycle.

During the year, 75,891 new ordinary shares (2021: 89,687) were issued to existing shareholders who exercised their right to receive dividends in the form of new shares. The equivalent cash amount totalled GBP0.457m (2021: GBP0.439m). A further 1,965,689 shares were issued via the institutional equity placing and as a result of employee options being exercised, for a total cash consideration of GBP10.58m (2021: GBP0.59 million).

Capital investment in fixed assets amounted to GBP5.31m (2021: GBP5.61m) in the year and GBP10.23m, net of cash acquired, was invested in acquisitions (2021: GBP2.21m).

Group net assets at the financial year end increased by 24% to GBP130.70m (2021: GBP105.72m), a record high. Based on the weighted average number of shares in issue during the year of 20.722m (2021: 20.120m), this equates to GBP6.31 per share (2021: GBP5.25 per share).

Return on assets from underlying pre-tax profits, increased to 17.4% (2021: 10.8%).


The Board is pleased to propose an increased final dividend of 11.60p per share. The final dividend will be paid on 28 April 2023 (2021:10.50p per share) to shareholders on the register on 31 March 2023. Together with the interim dividend of 5.40p per share, paid on the 31 October 2022, this makes a total dividend of 17.00p per share for the year (2021: 15.5p per share), an increase of 9.7% on the previous year. The final dividend is subject to shareholder approval at the forthcoming AGM on 21 March 2023.

The total dividend payment represents the 19(th) consecutive year of dividend growth since Wynnstay joined AIM in 2004. This dividend is covered 4.1 times by earnings after non-recurring items (2021: 2.8 times).


The Board would like to acknowledge the dedication and hard work of the Wynnstay team over the year. Our staff continue to provide customers with an excellent service and on behalf of my fellow Directors, I would like to thank everyone for their vital contribution to the 2022 results.

We are delighted to welcome the senior management teams and staff of Humphrey and Tamar to the Group. We are currently in the process of recruiting a Head of Strategic Delivery to work with senior management on key projects, including acquisitions and their successful integration into the business.

Philip Kirkham, Board Vice-Chairman and Senior Independent Director is due to retire during 2023. We have commenced a recruitment process for an appropriately qualified successor and will make a further announcement on the outcome of this process in due course.


The Group has made strong operational and strategic progress against its goals. While a number of one-off gains drove an exceptional financial performance this year, which we do not expect to be repeated in the new financial year, Group performance was also very strong.

Looking ahead at prospects over 2023, the sector is facing inflationary headwinds, as we have previously commented. We anticipate this to impact raw material prices, as well as the Group's energy, labour and distribution costs. We plan to manage these headwinds through efficiency and productivity improvements and other measures where possible. Farmers are facing similar pressures although there have been some welcome downward moves in energy and distribution costs in recent weeks.

Financially, the Group generates good cashflows and the balance sheet remains robust. This gives a solid platform for continuing development and supports our ongoing investment plans. These include a major programme of works at Carmarthen Mill, renewable energy projects and investments in the depot network. In the meantime, the Board continues to review acquisition opportunities that meet its criteria.

We believe that Wynnstay is in a good position to make further progress and to achieve its growth targets for the financial year.

Steve Ellwood




The Group's financial results this year are exceptional. They reflect a strong performance, which was supported by a favourable trading environment across most sectors, very significant one-off gains (which we do not expect to be repeated) arising from global events, and inflation. These one-off gains predominantly arose from the fertiliser processing activity at Glasson Grain Ltd, which experienced substantial stock gains following the sharp price increases in natural gas over 2022, a key ingredient in fertiliser production, particularly following the invasion of the Ukraine by Russia.

Inflation was a major feature during the year, which impacted grain and feed prices as well as fertiliser prices. It contributed significantly to the Group's revenue outcome. Nonetheless, we managed these inflationary pressures well, particularly in relation to energy, fuel and labour costs. We have also sought to position the business to be able to manage anticipated cost increases in the year ahead.

We are pleased to have outperformed national trends in the sectors in which we operate, and have made material progress in expanding the Group's geographical coverage, as well as increasing Group manufacturing capacity.

The acquisition of Humphrey Poultry (Holdings) Ltd ("Humphrey"), based at Twyford in Hampshire, in March 2022, fulfilled multiple strategic aims. Significantly, it has opened up new geographic areas for us, particularly in the South of England, nearly doubled our market share in poultry feed for free-range egg production, and added additional feed manufacturing capacity, with the potential to further enhance the Group's feed manufacturing operations. A further acquisition, Tamar Milling Ltd, an animal feed business based in Cornwall, which we completed after the end of the financial year, has expanded our geographic reach in the South West of England. Both acquisitions are immediately earnings enhancing.

The Joint Venture businesses, particularly Bibby Agriculture Ltd and WYRO Developments Limited, have performed very well, contributing above our expectations.

We have continued to invest significantly in the business. Our investment project at our seed processing plant in Astley was completed, doubling grass seed mixing capacity and adding new cereal seed processing technology. Our major capital investment programme at the Carmarthen feed mill has started and is on course to be completed in early 2024. We are also considering options to redevelop the mothballed feed plant at Calne in Wiltshire.

Environment, Social and Governance principles ("ESG") is an important pillar of Group strategy. We continue to provide products and services to our customers that will help them deliver their environmental ambitions, including meeting new Government policy and legislation, in particular Environmental Land Management Schemes ("ELMS"), the Sustainable Farming Scheme and Nitrate Vulnerable Zones.



The Agriculture Division manufactures and processes feed, fertiliser and seed, in addition to supplying a comprehensive range of agricultural inputs for both arable and livestock farmers. The Division includes Glasson Grain Limited, GrainLink, the Group's specialist crop marketing business, and, since March 2022, the Humphrey business.

Revenue generated by the Agriculture Division increased by 57% to GBP564.26m (2021: GBP358.96m) and segmental contribution (see Note 2 of the financial statements) rose by 247% to GBP14.66m (2021: GBP4.22m).


Feed products are manufactured at our main feed mills at Llansantffraid, Carmarthen and Twyford (acquired in March 2022), supported by three blending facilities at Rhosfawr, Condover, near Shrewsbury and Whitstone in Cornwall (acquired in November 2022). We manufacture feed for dairy, beef, sheep and free-range egg producers, the wide offering providing an internal hedge against variations in individual sector performance. Feed is offered in compounded, blended or meal form and can be bought in bulk or bagged. The majority of the Wynnstay-branded bagged feed is sold through our depot network. Our customers are also able to source feed raw materials, liquid feeds and feed supplements from us. We support our feed offering with a technical sales team, which provides on-farm specialist advice on animal nutrition. This is a differentiator for us to the wider market.

Our feed volumes during the financial year increased by 6% to a record level and outperformed the national trend. Demand was boosted by the dry summer, which reduced available grass and forage. Dairy feed volumes were up by 7%, poultry by 2% and sheep by 5%. Although feed volumes were strong, margins were affected by raw material volatility and increased fuel and packaging costs, which we were not able to pass on fully. This resulted in the contribution from feed being slightly behind last year.

We have made further progress in enhancing the sustainability of our offering, a key component of our overall strategy. We launched a range of ruminant feeds that include a methane inhibitor approved by the Carbon Trust. We are also working on a collaborative project to reduce phosphate excretion from laying hens in order to reduce water pollution.

The Humphrey business, which was acquired in March 2022, made a good first-time contribution, in line with our expectations. This was very pleasing given the pressures that the egg industry experienced over the year, with feed, energy and labour costs increasing without the corresponding increase in egg price. In addition, Avian Influenza resulted in the culling of laying flocks, which also reduced feed demand, a factor that is likely to continue in 2023, while the organic sector has been affected by consumers trading down to cheaper conventionally-produced eggs. We have successfully reduced our cost base to mitigate these challenges.

Our major investment programme at Carmarthen Mill is well under way and on schedule to be completed by early 2024. It will significantly increase our feed manufacturing capacity as well as drive efficiency. As part of the acquisition of the Humphrey business, we acquired a mothballed feed plant at Calne in Wiltshire. There is an opportunity to redevelop this site and replace the leased facility at Twyford, which was retained by the vendors. We are considering all our options in developing the site to ensure optimal benefits as we expand capacity and take advantage of the opportunities to increase our market share in the South West of England.

The increase in the price of grain during the second half of 2022 resulted in significant feed price rises for the winter of 2022/2023. Additionally, the mild autumn enabled farmers to keep livestock out at grass longer than normal. This reduced feed demand during the early part of the winter.

Arable Products

Our arable operations supply a wide range of services and products to arable and grassland farmers. These include seeds, fertilisers and agro-chemical, as well as grain marketing services.

Overall, the Arable Division performed very well, with significant contributions from GrainLink and our in-house fertiliser trading operation.

GrainLink experienced an exceptional year, increasing volumes traded by 31% to a record high. This reflected the good harvest yields in both 2021 and 2022 and increased market share on the eastern side of the country, where we had invested in additional resource. Grain markets were extremely volatile in the period and GrainLink's already strong contribution to Group results received a significant boost by an unusual and very short-lived surge in the price of wheat contracts on 31 October 2022, our financial year end. As previously reported, this was caused by the Russian Government's decision, which was reversed 72 hours later, to withdraw from an agreement allowing grain to be exported from Ukraine. This short-lived price movement created an additional, non-cash accounting profit of approximately GBP0.4 million.

GrainLink's "Arable Event" successfully returned in June after a break of two years due to the coronavirus. The specialised event attracted around 800 farmers, who came to listen to keynote speakers and obtain information on cutting-edge arable farming technology.

Total cereal seed volumes were 19% lower year-on-year. This reflected an increase in "farmer-saved" cereal seed being used for autumn plantings after the early and good quality 2022 harvest, and our decision to reduce lower-margin wholesale sales. Demand for grass seed was also lower, with the dry spring and summer resulting in a smaller acreage of both conventional and environmental grass seed being sown. Nonetheless, our grass seed volumes, which were down by 9%, were better than the national market trend.

We completed the investment at our seed processing plant at Shrewsbury. This has enabled us to double grass seed mixing capacity. We also installed a colour sorter into the cereal processing facility, which now enables us to process hybrid cereal seed. We are collaborating with seed breeders and stakeholders within the sector to ensure that we continue to deliver innovation to our arable customers.

Merchanted fertiliser sales performed ahead of last year and management expectations. While the dry spring and summer, coupled with significant price increases, flattened demand, particularly from the livestock sector, improved margins more than offset lower tonnage.

A large acreage of winter cereals was planted in the autumn of 2022. This typically results in a reduction of spring sown seed. The large acreage of autumn sown seed bodes well for both demand for crop inputs and a good harvest in 2023, although weather can influence yield. We therefore view the outlook for the arable sector positively, despite farmers' increased input costs.

Glasson Grain Limited ("Glasson")

Glasson is the second largest fertiliser blender in the UK, and is based at Glasson Dock near Lancaster. As well as fertiliser blending, Glasson has two other core activities, the supply of feed raw materials and the manufacture of added-value animal feed products.

Glasson delivered a record result, driven by one-off gains (which we do not believe will be repeated) from the fertiliser blending activity, which benefited from rising and volatile raw material prices. This followed increases in the price for natural gas - a key raw material in the production of fertiliser. Sanction-related restrictions on Russian businesses tightened global supplies of fertiliser products, substantially increasing fertiliser prices. Whilst this reduced demand, it also generated significant stock gains for Glasson. Gas prices rose again in the summer of 2022, resulting in further fertiliser price rises. This was followed by the permanent closure of the CF Industries fertiliser production plant and certain manufacturers suspending production, and the market remains tight.

The specialist animal feed operation experienced lower demand for wild bird food and associated products, and margins were also affected by rising energy and labour costs. The feed trading operation performed ahead of management expectation, maintaining both volumes and margins in a volatile market.


The Specialist Agricultural Merchanting Division comprises a network of 53 depots, located within predominantly livestock areas of England and Wales. The depots supply a range of products that cater predominantly for the needs of farmers but also rural dwellers. The depot network is supported by our multi-channel sales route to market, which includes a sales trading desk, specialist catalogues and a digital platform. The division also incorporates Youngs Animal Feeds, based in Staffordshire, which manufactures a range of equine products. These are marketed throughout Wales and the Midlands region.

Revenue from the Specialist Agricultural Merchanting Division increased by 5% to GBP148.77m (2021: GBP141.43m). Its segmental contribution rose by 11% to GBP7.95m (2021: GBP7.15m), which was well ahead of management expectations and driven by strong sales of higher-margin products, such as own-brand bagged feed, as well as increased efficiencies.

Like-for-like sales at the depots increased by 5% year-on-year. The long, dry summer affected sales of certain product categories such as crop packaging, animal health and fencing products, and spend on certain discretionary items reduced.

We continued with our depot optimisation programme, closing the Bethania depot in Ceredigion in September 2022 while retaining its trade via other depots in the area. We also continued to invest in staff training, so that customers benefit from valuable advice and guidance on products and their usage. Depot staff also continue to work closely with our on-farm specialists.

Youngs Animal Feeds has been affected by the cost-of-living increase, particularly in the second half of the year, with volumes and margins impacted by the squeeze on consumer spending. This is likely to continue into the new financial year.


Wynnstay has three joint venture companies, Bibby Agriculture Limited, WYRO Developments Limited and Total Angling Limited, and an associate company, Celtic Pride Limited.

The combined contribution from our joint ventures and associated company was significantly higher than budgeted at GBP0.80m (2021: GBP0.68 m ). This reflected a strong performance from Bibby Agriculture Limited and the completion of a housing development site at WYRO Developments Limited.


ESG considerations are very important to us as we continue to develop the Group. Our ESG strategy has two fundamental aims. These are to achieve net carbon zero by 2040 and to help farmers feed the UK in an environmentally and sustainable way.

In order to support our ESG strategy, during the year we set up a Sustainable Farm Advisory Team, comprising industry experts. They will work with the Board and with the Environmental and Sustainability Manager and provide counsel on our strategy and delivery plans.

Over the next twelve months we will be focused on developing a roadmap to enable the Group to fully integrate the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures("TCFD"). This will improve and increase the reporting of the Group's climate-related financial information.

Internally, we have a number of programmes under way to reduce carbon emissions and energy consumption. These cover the Group's lighting, vehicle fleet, biofuel use and power requirements. A major initiative is a GBP1 million investment in solar photovoltaic panels at six of our sites that have high electricity usage. We intend this to be the first phase of a multi-site rollout of renewables over the next five years.

In terms of our offering to farmers, Wynnstay is well-placed to provide solutions at all points of food production. Precision farming techniques can play a significant role in reducing carbon emissions and protecting soil, water and air quality. These include precision nutrient use for crops and livestock feeding management. Careful soil management is also critical to better environmental outcomes. New Government policy and legislation in England and Wales, such as ELMS, the Sustainable Farming Scheme and Nitrate Vulnerable Zones, are also requiring farmers to adopt new practices.

We have continued to increase our offering of sustainable products during the year, and launched our Holistic Whole Farm Solution through our sales team. We also introduced into our range of ruminant feeds a methane inhibitor, which has been approved by the Carbon Trust, and are also working on other feed products.

We take our social and community responsibilities very seriously. Our 'Colleagues Forum', introduced in the last financial year, gives our staff the opportunity to more easily offer their views on how to improve the business, and we wish to see this initiative further develop. We continue to support the local communities in which we operate through projects and supporting local charities. We also support the charitable efforts of our staff, which include fundraising events for the Royal Agricultural Benevolent Institution and Children with Cancer.

As a Board, we aim to maintain very high standards of appropriate corporate and commercial governance, which will support the delivery of long-term shareholder value.


I would like to thank all our staff for their loyalty, commitment, and dedication over the year. The Group's record results have been underpinned by their hard work in what was a challenging year, with disruption from coronavirus, supply issues, inflation, and the cost-of-living crisis. Wynnstay colleagues have continued to demonstrate our values, and I am extremely proud of them all.


Trading in the first two months of the new financial year was in line with management expectations, and, looking further ahead, we remain confident of continuing progress against our strategic plans. We are also conscious of inflationary pressures, which will increase costs for our customers, suppliers and consumers, and have taken steps to manage these pressures. Farmgate prices are off the peaks of 2022, and although there is sector variation, especially for free-range eggs, prices are still strong against the average of the last five years.

The year's excellent financial results included substantial one-off profits that we do not believe will be repeated in the new financial year. Nonetheless, the trading performance was also strong, and the Group remains well-positioned to build on this performance.

We remain firmly focused on our long-term growth ambitions and are investing with confidence across the Group and will continue to seek complementary acquisitions.

Gareth Davies

Chief Executive Officer



For the year ended 31 October 2022

                                                                                     2022          2021 
                                                                Note   GBP000      GBP000   GBP000      GBP000 
                                                                      -------  ----------  -------  ---------- 
 Revenue                                                           2              713,034              500,386 
 Cost of sales                                                                  (622,228)            (432,493) 
 Gross profit                                                                      90,806               67,893 
 Manufacturing, distribution 
  and selling costs                                                              (59,386)             (50,072) 
 Administrative expenses                                                          (9,307)              (7,096) 
 Other operating income                                                               335                  361 
 Adjusted operating profit(1)                                                      22,448               11,086 
 Amortisation of acquired intangible 
  assets, goodwill impairment 
  and share-based payment expense                                  4                (416)                (477) 
 Non-recurring items                                               4              (1,094)                    - 
-------------------------------------------------------------  -----  -------  ----------  -------  ---------- 
 Group operating profit                                                            20,938               10,609 
 Interest income                                                          166                  193 
 Interest expense                                                       (656)                (383) 
                                                                   3                (490)                (190) 
 Share of profits in joint ventures 
  and associates accounted for 
  using the equity method                                                 808                  677 
 Share of tax incurred by joint 
  ventures and associates                                               (132)                (105) 
                                                                   6                  676                  572 
                                                                      -------  ----------  -------  ---------- 
 Profit before taxation                                                            21,124               10,991 
 Taxation                                                          7              (3,982)              (2,057) 
                                                                      -------  ----------  -------  ---------- 
   Profit for the year                                                             17,142                8,934 
 Other comprehensive (expense) 
  / income 
  Items that will be reclassified 
  subsequently to profit or loss 
   *    Net change in the fair value of cashflow hedges taken 
        to equity, net of tax                                                     (2,462)                    263 
                                                                                    2,336                      - 
   *    Recycle cashflow hedge to income statement 
 Other comprehensive (expense) 
  / income for the period                                                           (126)                    263 
                                                                      -------------------  -------  ------------ 
 Total comprehensive income 
  for the period                                                                   17,016                  9,197 
                                                                      ===================  =======  ============ 
 Basic earnings per share                                          9               82.72p                 44.40p 
 Diluted Earnings per share                                        9               80.65p                 43.53p 
                                                                      -------------------  -------  ------------ 

(1) Adjusted operating profit are after adding back amortisation of acquired intangible assets, goodwill impairment, share-based payment expense and non-recurring items.



 As at 31 October 2022                          2022        2021 
                                       Note    GBP000      GBP000 
                                             ----------  --------- 
 Goodwill                                      16,133      14,322 
 Intangible assets                              4,936       236 
 Investment property                            1,850      2,372 
 Property, plant and equipment                 20,840      16,746 
 Right-of-use assets                            8,202      11,043 
 Investments accounted for using 
  equity method                                 4,101      3,433 
 Derivative financial instruments                 1          5 
                                               56,063      48,157 
                                             ----------  --------- 
 Inventories                                   71,095      50,550 
 Trade and other receivables                   96,575      72,511 
 Financial assets - loan to 
  joint ventures                                1,067      3,319 
 Cash and cash equivalents              11     31,177      19,641 
 Derivative financial instruments                598        320 
                                               200,512    146,341 
                                             ----------  --------- 
 TOTAL ASSETS                                  256,575    194,498 
                                             ----------  --------- 
 Financial liabilities - borrowings     11     (3,043)     (672) 
 Lease liabilities                      11     (3,344)    (3,995) 
 Derivative financial instruments               (53)        (53) 
 Trade and other payables                     (105,015)   (76,212) 
 Current tax liabilities                       (1,639)    (1,218) 
 Provisions                                     (345)      (243) 
                                              (113,439)   (82,393) 
                                             ----------  --------- 
 NET CURRENT ASSETS                            87,073      63,948 
                                             ----------  --------- 
 Financial liabilities - borrowings     11     (6,640)       - 
 Lease liabilities                      11     (3,999)    (5,731) 
 Trade and other payables                       (36)        (38) 
 Derivative financial instruments               (80)       (140) 
 Deferred tax liabilities                      (1,680)     (474) 
                                              (12,435)    (6,383) 
                                             ----------  --------- 
 TOTAL LIABILITIES                            (125,874)   (88,776) 
                                             ----------  --------- 
 NET ASSETS                                    130,701    105,722 
                                             ----------  --------- 
 Share capital                          10      5,585      5,075 
 Share premium                                 42,130      31,600 
 Other reserves                                 4,267      4,131 
 Retained earnings                             78,719      64,916 
 TOTAL EQUITY                                  130,701    105,722 
                                             ----------  --------- 



As at 31 October 2022

                                                Share                Cashflow 
                                     Share    premium       Other       hedge     Retained 
                                   capital    account    reserves    reserves     earnings       Total 
 Group                              GBP000     GBP000      GBP000    GBP000's       GBP000      GBP000 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 At 1 November 2020                  5,013     30,637       3,525           -       59,003      98,178 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 Profit for the year                     -          -           -                    8,934       8,934 
 Net change in the fair 
  value of cashflow hedges 
  taken to equity, net of 
  tax                                    -          -           -         263            -         263 
 Total comprehensive income 
  for the year                           -          -           -         263        8,934       9,197 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 Transactions with owners 
  of the Company, recognised 
  directly in equity: 
 Shares issued during the 
  year                                  62        963           -           -            -       1,025 
 Dividends                               -          -           -           -      (3,021)     (3,021) 
 Equity settled share-based 
  payment transactions                   -          -         343           -            -         343 
 Total contributions by 
  and distributions to owners 
  of the Company                        62        963         343           -      (3,021)     (1,653) 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 At 31 October 2021                  5,075     31,600       3,868         263       64,916     105,722 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 Profit for the year                     -          -           -           -       17,142      17,142 
 Net change in the fair 
  value of cashflow hedges 
  taken to equity, net of 
  tax                                    -          -           -     (2,462)            -     (2,462) 
 Recycle cashflow hedge 
  to income statement                    -          -           -       2,336            -       2,336 
 Total comprehensive income 
  for the year                           -          -           -       (126)       17,142      17,016 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 Transactions with owners 
  of the Company, recognised 
  directly in equity 
 Shares issued during the 
  year                                 510     10,530           -           -            -      11,040 
 Dividends                               -          -           -           -      (3,339)     (3,339) 
 Equity settled share-based 
  payment transactions                   -          -         262           -            -         262 
 Total contributions by 
  and distributions to owners 
  of the Company                       510     10,530         262           -      (3,339)       7,963 
                                ----------  ---------  ----------  ----------  -----------  ---------- 
 At 31 October 2022                  5,585     42,130       4,130         137       78,719     130,701 
                                ----------  ---------  ----------  ----------  -----------  ---------- 



For the year ended 31 October 2022

                                                          2022      2021 
                                               Note     GBP000    GBP000 
                                                     ---------  -------- 
 Cash flows from operating activities 
 Cash generated from operations                  12     13,839    10,577 
 Interest received                                3        166       193 
 Interest paid                                    3      (399)     (102) 
 Net movement in provisions                                  -      (96) 
 Tax paid                                              (3,342)   (1,462) 
 Net cash generated from operating 
  activities                                            10,264     9,110 
                                                     ---------  -------- 
 Cash flows from investing activities 
 Proceeds from sale of property, plant 
  and equipment                                            264       340 
 Purchase of property, plant and equipment             (3,560)   (1,563) 
 Acquisition of business and assets, 
  net of cash acquired                           13       (98)   (2,156) 
 Acquisition of subsidiary undertaking, 
  net of cash acquired                           13   (10,136)      (82) 
 Decrease in short term loans to joint 
  ventures                                               2,252       570 
 Disposal of investments                                     7         - 
 Dividends received from joint ventures 
  and associates                                             4       753 
 Net cash used by investing activities                (11,267)   (2,138) 
                                                     ---------  -------- 
 Cash flows from financing activities 
 Net proceeds from the issue of ordinary 
  share capital                                         11,040     1,025 
 Proceeds from new bank loan                             9,485         - 
 Lease repayments                                      (4,229)   (4,392) 
 Repayment of borrowings                                 (474)     (900) 
 Dividends paid to shareholders                   8    (3,339)   (3,021) 
 Net cash generated from / (used in) 
  financing activities                                  12,483   (7,288) 
                                                     ---------  -------- 
 Net increase in cash and cash equivalents              11,480     (316) 
 Effects of exchange rate changes                           56      (23) 
 Cash and cash equivalents at the beginning 
  of the period                                         19,641    19,980 
 Cash and cash equivalents at the end 
  of the period                                  11     31,177    19,641 
                                                     =========  ======== 




The Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related notes that form part of this approved financial information.

Basis of Preparation

The Group's financial statements have been prepared in accordance with international accounting standards in accordance with UK-adopted International Accounting Standards and applicable law. The Group financial statements have been prepared under the historical cost convention other than certain assets which are at deemed cost under the transition rules, share-based payments which are included at fair value and certain financial instruments which are explained in the relevant section below. A summary of the material Group accounting policies is set out below and have been applied consistently.

The preparation of financial statements in accordance with UK-adopted International Accounting Standards requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

Going Concern

The directors have prepared the financial information presented for Group and Company on a going concern basis having considered the principal risks to the business and the possible impact of plausible downside trading scenarios. The Board have concluded that they have a reasonable expectation that the entity has adequate resources to continue in operational existence for the foreseeable future. The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report of the Group's Annual Report. The financial position of the Group and the principal risks and uncertainties are also described in the Strategic report.

The Group has a sound financial base and forecasts that show profitable trading and sufficient cash flow and resources to meet the requirements of the business, including compliance with banking covenants and on-going liquidity. In assessing their view of the likely future financial performance of the Group, the Directors consider industry outlooks from a variety of sources, and various trading scenarios. This analysis showed that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. More detail on outlook is contained within the Group's Annual Report.

In conclusion, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.


IFRS 8 requires operating segments to be identified on the basis of internal financial information about the components of the Group that are regularly reviewed by the chief operating decision maker ("CODM") to allocate resources to the segments and to assess their performance.

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 Agriculture, Specialist Agricultural Merchanting 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 segment, namely the United Kingdom.

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

Specialist Agricultural Merchanting - supplies of a wide range of specialist products to farmers, smallholders, and pet owners.

Other - miscellaneous operations not classified as Agriculture or Specialist Agricultural Merchanting.

The Board assesses the performance of the operating segments based on a measure of operating profit. Non-recurring costs and 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. No segment is individually reliant on any one customer.

All revenue during the year has arisen from revenue recognised at a point in time, and there were no revenues from transactions in 2022 or 2021 with individual customers which amounted to 10% or more of Group revenues.in that period.

The segment results for the year ended 31 October 2022 are as follows:

 Year ended 31 October            Agriculture     Merchanting     Other       Total 
  2022                                 GBP000          GBP000    GBP000      GBP000 
                                 ------------  --------------  --------  ---------- 
 Revenue from external 
  customers                           564,263         148,771         -     713,034 
                                 ------------  --------------  --------  ---------- 
 Segment result 
 Group operating profit 
  before non-recurring 
  items                                14,108           7,939      (15)      22,032 
 Share of results of 
  joint ventures before 
  tax                                     553               8       247         808 
                                       14,661           7,947       232      22,840 
                                 ------------  --------------  --------  ---------- 
 Non-recurring items                                                        (1,094) 
 Interest income                                                                166 
 Interest expense                                                             (656) 
 Profit before tax from 
  operations                                                                 21,256 
 Income taxes (includes 
  tax of joint ventures 
  and associates)                                                           (4,114) 
 Profit for the year 
  attributable to equity 
  shareholders from operations                                               17,142 
   Other Information: 
                                 ------------  --------------  --------  ---------- 
 Depreciation and amortisation          3,772           2,591        12       6,375 
 Non-current asset additions           13,490           1,260         -      14,750 
                                 ------------  --------------  --------  ---------- 
 Segment assets                       146,008          75,099     4,212     225,319 
 Segment liabilities                 (80,906)        (24,544)         -   (105,450) 
                                 ------------  --------------  --------  ---------- 
 Add corporate net cash 
  (note 11)                                                                  14,151 
 Less corporate and deferred 
  tax liabilities                                                           (3,319) 
 Net assets                                                                 130,701 
 Included in the segment 
  assets above are the 
  following investments 
  in joint ventures and 
  associates                            2,746             117     1,150       4,013 
   2 .            SEGMENTAL REPORTING (continued) 

The segment results for the year ended 31 October 2021 are as follows:

 Year ended 31 October            Agriculture     Merchanting     Other      Total 
  2021                                 GBP000          GBP000    GBP000     GBP000 
                                 ------------  --------------  --------  --------- 
 Revenue from external 
  customers                           358,961         141,425         -    500,386 
                                 ------------  --------------  --------  --------- 
 Segment result 
 Group operating profit 
  before non-recurring 
  items                                 3,697           7,120     (208)     10,609 
 Share of results of 
  joint ventures before 
  tax                                     524              33       120        677 
                                        4,221           7,153      (88)     11,286 
                                 ------------  --------------  --------  --------- 
 Non-recurring items                                                             - 
 Interest income                                                               193 
 Interest expense                                                            (383) 
 Profit before tax from 
  operations                                                                11,096 
 Income taxes (includes 
  tax of joint ventures 
  and associates)                                                          (2,162) 
 Profit for the year 
  attributable to equity 
  shareholders from operations                                               8,934 
 Other Information: 
                                 ------------  --------------  --------  --------- 
 Depreciation and amortisation          3,463           2,676         -      6,139 
 Non-current asset additions            3,860           2,094         -      5,954 
                                 ------------  --------------  --------  --------- 
 Segment assets                       101,812          66,237     6,808    174,857 
 Segment liabilities                 (56,547)        (20,139)         -   (76,686) 
                                 ------------  --------------  --------  --------- 
 Add corporate net cash 
  (note 11)                                                                  9,243 
 Less corporate and deferred 
  tax liabilities                                                          (1,692) 
 Net assets                                                                105,722 
 Included in the segment 
  assets above are the 
  following investments 
  in joint ventures and 
  associates                            2,386             115       840      3,341 
   3.         FINANCE COSTS 
                                           2022     2021 
                                         GBP000   GBP000 
 Interest expense: 
 Interest payable on borrowings           (399)    (102) 
 Interest payable on finance leases       (257)    (281) 
 Interest and similar charges payable     (656)    (383) 
                                        -------  ------- 
 Interest income from banks deposits         66       57 
 Interest income from customers             100      136 
 Interest receivable                        166      193 
                                        -------  ------- 
 Finance costs                            (490)    (190) 
                                        =======  ======= 


                                                 2022     2021 
                                               GBP000   GBP000 
                                              -------  ------- 
 Amortisation of acquired intangible assets 
  and share-based payments 
 Amortisation of intangibles                      154       39 
 Impairment of goodwill                             -       95 
 Cost of share-based reward                       262      343 
                                                  416      477 
                                              -------  ------- 
 Non-recurring items 
 Business combination costs                       572        - 
 Fair value movement in Investment property       522        - 
                                              -------  ------- 
                                                1,094        - 
                                              =======  ======= 

Non-recurring items in relation to 2022 were:

- Business combination costs relating to the acquisition of Humphrey Poultry (Holdings) Limited.

- The fair value movement in investment property followed a professional valuation carried out by BNP Paribas Real Estate in July 2022.


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

                                                   2022      2021 
                                                  GBP000    GBP000 
 Staff costs                                       37,724    31,085 
 Cost of inventories recognised as an expense     617,170   431,423 
 Depreciation of property plant and equipment: 
 - owned assets                                     2,290     2,165 
 Amortisation of right-of-use assets                4,085     3,974 
 Amortisation of intangibles                          154        39 
 Fair value (gains) / losses on derivative 
  financial instruments                             (627)        23 
 Hedge ineffectiveness for the period                 104       114 
 (Profit) on disposal of fixed assets               (132)      (86) 
 (Profit) on disposal of right of use assets         (86)      (14) 
 Other operating lease rentals payable                349       205 

Services provided by the Group's auditor

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

                                       2022     2021 
                                     GBP000   GBP000 
 Audit services - statutory audit       175      119 
                                               2022     2021 
                                             GBP000   GBP000 
 Total share of post-tax profits of joint 
  ventures                                      676      572 
                                            =======  ======= 
   7.         TAXATION 
                                                  2022     2021 
 Analysis of tax charge in year                 GBP000   GBP000 
                                               -------  ------- 
Current tax 
- Operating activities                           3,627    1,901 
- Adjustments in respect of prior years            136      (4) 
                                               -------  ------- 
  Total current tax                              3,763    1,897 
                                               -------  ------- 
Deferred tax 
- Accelerated capital allowances                  (76)       57 
- other temporary and deductible differences       295      103 
                                               -------  ------- 
Total deferred tax                                 219      160 
                                               -------  ------- 
  Tax on profit on ordinary activities           3,982    2,057 
                                               =======  ======= 
   8.         DIVIDS 
                                         2022     2021 
                                       GBP000   GBP000 
                                      -------  ------- 
 Final dividend paid for prior year     2,134    2,007 
 Interim dividend paid for current 
  year                                  1,205    1,014 
                                        3,339    3,021 
                                      =======  ======= 

Subsequent to the year end it has been recommended that a final dividend of 11.60p net per ordinary share (2021: 10.50p) be paid on 28 April 2023. Together with the interim dividend already paid on 29 October 2022 of 5.40p net per ordinary share (2021: 5.00p) this will result in a total dividend for the financial year of 17.00p net per ordinary share (2021: 15.50p).

   9.         EARNINGS PER SHARE 
                                           Basic earnings     Diluted earnings 
                                              per share           per share 
                                             2022     2021       2022       2021 
                                         --------  -------  ---------  --------- 
 Earnings attributable to shareholders 
  (GBP000)                                 17,142    8,934     17,142      8,934 
 Weighted average number of shares 
  in issue during the year (number 
  '000)                                    20,722   20,120     21,254     20,524 
 Earnings per ordinary 25p share 
  (pence)                                   82.72    44.40      80.65      43.53 

Basic earnings per 25p ordinary share is calculated by dividing profit for the year from continuing operations attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

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) taking into account their exercise price in comparison with the actual average share price during the year.

   10.       SHARE CAPITAL 
                                 2022               2021 
                          -----------------  ------------------ 
                            No. of   GBP000    No. of   GBP 000 
                            shares             shares 
                               000                000 
                          --------  -------  --------  -------- 
 Ordinary shares of 25p 
  each                      40,000   10,000    40,000    10,000 
                          --------  -------  --------  -------- 
 Allotted, called up 
  and fully paid 
 Ordinary shares of 25p 
  each                      22,340    5,585    20,299     5,075 
                          ========  =======  ========  ======== 

During the year 75,891 shares (2021: 89,687) were issued with an aggregate nominal value of GBP19,000 (2021: GBP22,000) and were fully paid up for equivalent cash of GBP459,000 (2021: GBP439,000) to shareholders exercising their right to receive dividends under the Company's dividend scrip scheme. A further 1,965,689 (2021: 158,138) shares with a nominal value of GBP491,000 (2021: GBP40,000) were issued for a cash value of GBP10,581,000 (2021: GBP586,000), with 65,689 being to satisfy the exercise of employee options and 1,900,000 shares issued in a private placing to institutional shareholders.

                                                      2022      2021 
                                                    GBP000    GBP000 
 Cash and cash equivalents per balance 
  sheet and cash flow                               31,177    19,641 
 Bank loans and other loans due within 
  one year or on demand: 
  Secured loans                                    (2,371)           - 
  Loanstock (unsecured)                              (672)       (672) 
                                                         -         - 
 Financial liabilities - borrowings                (3,043)     (672) 
 Net obligations under finance leases: 
 Non-property leases                               (1,647)   (1,626) 
 Property leases                                   (1,697)   (2,369) 
                                                 ---------  -------- 
 Lease liabilities                                 (3,344)   (3,995) 
 Total current net cash and lease liabilities       24,790    14,974 
 Bank loans: 
  Secured loans                                    (6,640)           - 
 Financial liabilities - borrowings                (6,640)         - 
 Net obligations under leases: 
 Non-property leases                               (1,645)   (1,881) 
 Property leases                                   (2,354)   (3,850) 
                                                 ---------  -------- 
 Lease liabilities                                 (3,999)   (5,731) 
 Total non-current net debt and lease 
  liabilities                                     (10,639)   (5,731) 
 Total net cash and lease liabilities               14,151     9,243 
                                                 ---------  -------- 
 Memo: total net cash and lease liabilities 
  excluding property leases                         18,202    15,462 
                                                 =========  ======== 

-- Cash and cash equivalents

Cash and cash equivalents are all cash at bank and held with HSBC UK Bank Plc, except for GBP1,652,000 (2021: GBP585,000) which is held at International FC Stones for wheat futures hedging. HSBC UK Bank Plc's credit rating per Moody's is Aa3 (2021: Aa3) for long term deposits. GBP3,623,000 (2021: GBP412,000) of the cash and cash equivalent balances is denominated in foreign currencies (EUR (99%) and USD (1%)) (2021: (90%) and USD (10%)). All other amounts are denominated in GBP and are at booked at fair value.

-- Borrowings

Bank loans and overdrafts are secured by an unlimited composite guarantee of all trading entities within the Group. During the year, a new bank loan of GBP9,485,000 was drawn structured as a term facility with quarterly repayments of 5% of the original loan amount. Interest on this loan is 1.75% over the daily SONIA rate up to the point of repayment.

Loan stock is redeemable at par at the option of the Company or the holder. Interest of 1.5% (2021: 0.5%) per annum is payable to the holders.

                                                   2022       2021 
                                                 GBP000     GBP000 
                                              ---------  --------- 
 Profits for the year from operations            17,142      8,934 
 Adjustments for: 
 Tax                                              3,982      2,057 
 Investment and goodwill impairment                   -         95 
 Fair value movement in Investment property         522          - 
 Depreciation of tangible fixed assets            2,289      2,165 
 Amortisation of right-of-use assets              4,086      3,974 
 Amortisation of other intangible fixed 
  assets                                            154         39 
 Profit on disposal of property, plant 
  and equipment                                   (132)       (86) 
 Profit on disposal of right-of-use 
  asset                                            (86)       (14) 
 Loss on relinquishment of property 
  leases                                              -         26 
 Interest income                                  (166)      (193) 
 Interest expense                                   656        383 
 Share of post-tax results of joint 
  ventures                                        (676)      (572) 
 Share-based payments                               262        343 
 Derivative held at fair value                    (627)         23 
 Hedge ineffectiveness                              104         46 
 Government grant                                   (2)          - 
 Movement in provisions                             (6)        193 
 Changes in working capital (excluding 
  effects of acquisitions and disposals 
  of subsidiaries): 
 (Increase) in inventories                     (18,401)   (14,583) 
 (Increase) in trade and other receivables     (18,467)   (16,730) 
 Decrease in payables                            23,205     24,477 
 Cash generated from operations                  13,839     10,577 
                                              =========  ========= 

Humphrey Poultry (Holdings) Limited

On 18 March 2022, Wynnstay plc entered a business combination and acquired 100% of the shares of Humphreys Poultry Holdings Limited, which in turn owns 100% of the shares in two commercial and operational entities Humphreys Feeds Limited and Humphreys Pullets Limited.

The consideration is GBP13.147m inclusive of cash and cash equivalents of GBP1.011m.

                                       Current  Non-Current     Total 
                                       GBP'000      GBP'000   GBP'000 
Trade Debtors                            5,003            -     5,003 
Other Debtors                              595            -       595 
Inventories                              2,144            -     2,144 
Cash and cash equivalents                1,011            -     1,011 
Trade Creditors                        (3,469)            -   (3,469) 
Other Creditors                          (368)            -     (368) 
Leases                                   (146)         (64)     (210) 
Deferred tax                                 -        (104)     (104) 
====================================  ========  ===========  ======== 
 Net Current Assets and Non-Current 
  Liabilities                            4,770        (168)     4,602 
------------------------------------  ========  ===========  -------- 
Tangible fixed assets                        -        1,545     1,545 
------------------------------------  ========  ===========  -------- 
Net Assets                               4,770        1,377     6,147 
------------------------------------  ========  ===========  -------- 

The provisional consideration payable is dependent on future product volumes of the commercial business acquired. The fair value of the contingent consideration has been based on management's expectation of the future performance of the business and that could range from GBPnil to GBP2.000m.

A full analysis of the provisional consideration is provided in the table below which includes the break-down of the tangible fixed assets which incorporates freehold land and buildings for the amount of GBP1.830m, which reflects the current fair value assessment carried out by an independent third-party valuation, which has not impacted the consideration, but only the analysis. The goodwill balance represents the assembled workforce and future sales opportunities and is not expected to be deductible for tax purposes.

                                             Fair Value of 
                                                Net Assets 
 Fair value of net assets acquired 
 Goodwill                                            1,811 
 Intangible - Brands                                 3,759 
 Intangible - Key and other accounts                 1,095 
 Property, plant and equipment                       2,566 
 Right of use assets                                   210 
 Trade Debtors                                       5,003 
 Other Debtors                                         595 
 Inventories                                         2,144 
 Cash and cash equivalents                           1,011 
 Trade payables                                    (3,469) 
 Other payables                                      (368) 
 Lease liabilities                                   (210) 
 Deferred tax                                      (1.000) 
------------------------------------------  -------------- 
 Acquisition date - fair value of total 
  net assets acquired                               13,147 
------------------------------------------  -------------- 
 Represented by:                                   GBP'000 
 Cash settled to vendor during the period           11,147 
 Contingent as at 31 October 2022                    2,000 
------------------------------------------  -------------- 
 Provisional Consideration                          13,147 
------------------------------------------  -------------- 
 Cashflow Statement:                               GBP'000 
 Cash settled to vendor during the period           11,147 
 less cash and cash equivalents acquired           (1,011) 
 plus, cash settled to vendors during 
  the period for prior acquisition                      98 
------------------------------------------  -------------- 
 Acquisition date - fair value of total 
  net assets acquired                               10,234 
------------------------------------------  -------------- 

Directly attributable acquisition costs of GBP0.563m were incurred with the transaction, and these have been recognised as non-recurring expenses in the income statement for the period and included in operating activities in the cash flow statement. During the last available audited accounts of the acquired entities, for the period to February 2021, the annual aggregate revenues on a non-consolidated basis amounted to GBP41.446m and profit before tax was GBP1.634m. Business combination accounting is expected to be finalised within 12 months from the completion date of the acquisition.

Amounts included in the Consolidated Statement of Comprehensive Income in the period to 31 October 2022 in relation to the acquired business are revenues of GBP31.567m and profit before tax of GBP0.643m.

Contingent consideration of GBP0.098m was paid during the period to 31 October 2022 relating to other prior period acquisitions, resulting in a total gross cash outflow of GBP11.245m or GBP10.234m net of cash acquired with the Humphrey transaction.


Acquisition of Tamar Milling Limited

On 17 November 2022, Wynnstay Group PLC announced that Wynnstay (Agricultural Supplies) Ltd had acquired the entire share capital of Tamar Milling Ltd, a manufacturer and supplier of blended feed products ("Tamar"), for an initial consideration of up to GBP1.5m (inclusive of up to GBP0.1m of contingent consideration based on future product volumes).

Based in Whitstone, Cornwall, Tamar is a highly complementary acquisition to the Group, which strengthens the Company's presence in the south-west of England, adds a new farming customer base and provides good cross selling opportunities for other Group activities. The acquisition establishes the Group's first south-western feed manufacturing facility which enables the provision of its own bulk feed offering for the first time.

In the year ended 30 September 2021, Tamar generated revenues of GBP6.40m, and a profit before tax of GBP0.42m. Net assets at 30 September 2021 were GBP0.92m. The transaction initially appears to satisfy the IFRS 3 requirements of a business combination, and the Group intends to account for the acquisition in the year ended 31 October 2023 where IFRS 3 criteria have been satisfied. As of the date of this report, insufficient information is available to complete the business combination accounting as transaction completion accounts have not been completed by the vendors.


Using the Board's preferred alternative performance measured referred to as Underlying pre-tax profit, which includes the gross share of results from joint ventures and associates but excludes share-based payments and non-recurring items, the Group achieved GBP22.61m (2020: GBP8.37m). A reconciliation with the reported income statements and this measure, together with the reasons for its use is given below:

                                              2022     2021 
                                            GBP000   GBP000 
                                           -------  ------- 
 Profit before tax                          21,124   10,991 
 Share of tax incurred by joint ventures 
  and associates                               132      105 
 Share-based payments                          262      343 
 Non-recurring items                         1,094        - 
                                           -------  ------- 
 Underlying pre-tax profit                  22,612   11,439 
                                           =======  ======= 

The Board provides this alternative performance measure as it believes it provides a view of the underlying commercial performance of the current trading activities, providing investors and other users of the accounts with an improved view of likely future performance by making the following adjustments to the IFRS results for the following reasons:

      --  The add back of tax incurred by joint ventures and 
           associates. The Board believes the incorporation of 
           the gross result of these entities provides a fuller 
           understanding of their combined contribution to the 
           Group performance. 
      --  The add back of share-based payments. This charge 
           is a calculated using a standard valuation model, 
           with the assessed non-cash cost each year varying 
           depending on new scheme invitations and the number 
           of leavers from live schemes. These variables can 
           create a volatile non-cash charge to the income statement, 
           which is not directly connected to the trading performance 
           of the business. 
      --  Non-recurring items. The Group's accounting policies 
           include the separate identification of non-recurring 
           material items on the face of the income statement, 
           which the Board believes could cause a misinterpretation 
           of trading performance if not disclosed. See note 

The Directors below confirm to the best of their knowledge:

      --  the financial statements, prepared in accordance with 
           the applicable set of accounting standards, give a 
           true and fair view of the assets, liabilities, financial 
           position and profit or loss of the Company and the 
           undertakings included in the consolidation taken as 
           a whole; and 
      --  the management report includes a fair review of the 
           development and performance of the business and the 
           position of the issuer and the undertakings included 
           in the consolidation taken as a whole, together with 
           a description of the principal risks and uncertainties 
           that they face. 

S J Ellwood

P M Kirkham

B P Roberts

G W Davies

H J Richards

C A Bradshaw


The information in this announcement has been extracted from the audited statutory financial statements for the year ended 31 October 2022 and as such, does not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006 as it does not contain all the information required to be disclosed in the financial statements prepared in accordance with UK-adopted International Accounting Standards.

Statutory accounts for 2021 have been delivered to the Registrar of Companies. The auditor, RSM UK Audit LLP, has reported on the 2021 accounts; the report (i) was unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The statutory accounts for 2022 will be delivered to the Registrar of Companies following the Annual General Meeting. The auditor, RSM UK Audit LLP, has reported on these accounts; their report is unqualified, does not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and; does not include a statement under either section 498(2) or (3) of the Companies Act 2006.

The Annual Report and full Financial Statements will be available to shareholders during February 2023. 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.


The Annual General Meeting of the Company will be held on Tuesday 21 March 2023 at 11.45am in the Sovereign Suite at Shrewsbury Town Football Club, Oteley Road, Shrewsbury, Shropshire, SY2 6ST. Further details will be published on the Company's website www.wynstayplc.co.uk .

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(END) Dow Jones Newswires

February 01, 2023 02:00 ET (07:00 GMT)

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