Powys-based agricultural supplies group Wynnstay is on track to achieve its targets for the year, its chief executive has said after posting its half year results.
For the six months to the end of April this year, the Alternative Investment Market firm saw a decline in its pre-tax profit, down from a record £9.56m in 2022 to £5.07m, due to the changed market backdrop following one-off rising fertiliser prices last year.
However, revenue rose by 22% to £409.14m, from 2022 figures of £335.66m, as the group benefitted from contributions from its acquisition of Humphrey and Tamar last year and commodity price inflation accounting for around £48m of the overall rise in revenue.
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Basic earnings per share were 17.20p, down from 36.99p in 2022. While interim dividend increased to 5.50p from 5.40p last year, following 19 years of unbroken annual dividend growth.
The company said it was pleased with this year’s interim results which reflected “softer trading conditions” and a “significant unwinding” of inflated fertiliser prices which has impacted profits.
Last year, the group posted record results driven by a firm market backdrop and significant one-off gains from fertiliser blending activities at Glasson caused by sharply rising natural gas prices.
Against the changed backdrop, chief executive Gareth Davies said the firm’s underlying performance is in line with its expectations.
He said: “The Group performed well against softer trading conditions compared to last year and underlying performance is in line with our expectations. The extraordinary one-off gains of last year, generated by escalating fertiliser prices, were absent.
“Instead, our fertiliser blending operation at Glasson contended with a sharp reversal in the price of fertiliser back to the pre-exceptional and more sustainable levels of late 2021, which created one-off adverse stock realisations.
"During the first half, we continued with the integration of the Humphrey acquisition and with investment programmes across the Group to improve efficiencies and increase capacity.”
He added: "The overall outlook for the Group's performance in the second half is encouraging, with the arable sector looking strong. However, taking a cautious view, at this stage we do not expect to make up the full impact of the Glasson shortfall. Outside that one-off cost, we remain on track to achieve our targets for the year."
