Wynnstay Group (WYN) H1 2024 earnings summary

Executive summary

• Delivered resilient H1 2024 performance despite challenging weather, weaker farmer sentiment, and commodity price deflation, with leadership transition managed by the executive team during the CEO's compassionate leave.

• Maintained unit margins and offset higher costs through efficiency initiatives and investment programs, including feed mill expansion and solar panel installations.

• Net cash position improved to £18.5m from net debt of £7.3m, supporting ongoing investment and growth plans.

• Interim dividend increased by 1.8% to 5.6p per share, reflecting a progressive dividend policy and 20 years of annual growth.

• Full-year expectations remain unchanged, with a stronger second half anticipated due to deferred sales and improved farmgate prices.

Financial highlights

• Revenue fell 19.7% to £328.5m, mainly due to commodity price deflation and adverse weather; gross profit down 3.7% to £40.2m, with unit margins stable.

• Adjusted profit before tax was £4.8m (2023: £6.0m); basic EPS at 14.31p (2023: 19.28p).

• Net assets reached a record £136.3m (£5.91 per share).

• Dividend cover at 2x earnings; £2.7m paid in dividends during the period.

• Net cash (excluding leases) at £18.5m, up from net debt of £7.3m.

Outlook and guidance

• Full-year performance expected in line with market expectations, with H2 benefiting from deferred sales and improved farmgate prices, especially for milk.

• Trading in April and May was ahead of the prior year.

• Anticipated higher net cash at year-end versus prior year.

• Strong fundamentals in British farming and transition to sustainable agriculture support long-term growth.