Global economic events, commodity price inflation and strong farmgate prices have helped Powys-based agricultural supplies group Wynnstay to post "exceptional" revenues and profits.
Recording its financial results for 2022, the Alternative Investment Market group said growth and efficiency initiatives and farmer confidence, underpinned by strong farmgate prices across most sectors, helped its strong trading performance.
The business also made substantial one-off gains in its fertiliser activity driven by macroeconomic events, which it does not expect to repeat in the new financial year.
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With a big rise in commodity price inflation, group revenue was up 42% to £713.03m (2021: £500.39m). The figures were significantly ahead of initial market expectations, with its pre-tax profit up 92% to £21.12m (2021: £10.99m).
The firm is proposing a final dividend of 11.60p (2021: 10.50p), which would give a total dividend up 9.7% to 17.00p (2021: 15.50p). It is the 19th consecutive year of dividend increases.
The board believes Wynnstay remains well positioned to attain its growth targets despite the economic headwinds.
Gareth Davies, chief executive of Wynnstay Group, said: “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."
He added: "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."
Looking ahead to 2023, Wynnstay said it is anticipating inflationary pressures to impact raw material prices as well as its energy, labour and distribution costs. It said it plans to manage these pressures through efficiency and productivity improvements.
Its robust balance sheet means the company will continue its investment plans including major works at Carmarthen Mill as well as renewable energy projects and investments in the depot network. It is also reviewing future acquisition opportunities.
In a note, brokers Shore Capital said Wynnstay had issued record full year results ahead of the board’s and its own expectations for the sixth time.
It added: “Overall, the results reflect a strong trading performance across all divisions, noting the substantial one-off gains in its fertiliser operations given the volatility in natural gas prices and constricted supply. Despite the macroeconomic uncertainty/inflationary pressures, Wynnstay remains structurally well-positioned. Conservatively, we leave our FY23F estimates unchanged.”
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