Specialist distributor NWF's (NWF) half-year sales may have slipped, but earnings received a boost from a robust performance at the feed operation - which generates a quarter of group revenues.
Part of the feed unit's outperformance reflects the fact that last year's comparable period was so weak after a long and mild autumn cut demand for animal feed. But the wet weather that followed has meant poor quality silage, forcing farmers to buy more feed - that coincided with rising crop prices and regular NWF price increases. Accordingly, fed unit revenue jumped 10.1 per cent and the operating profit soared by £1m to £1.6m.
It's a less robust story elsewhere, though. Food business revenue slumped 17.5 per cent to £18.9m, with operating profit falling £1m to £0.8m - the uptake of new customers has been slower than anticipated after AB Food was lost as a client. Meanwhile, the fuels business saw revenue fall 5.1 per cent to £171.4m, reflecting lower crude oil prices, although operating profit reached £0.5m from break-even in the previous period.
Still, the net debt burden more than halved in the period and broker Peel Hunt forecasts full-year adjusted pre-tax profit of £6m, giving EPS of 9.5p (8p in 2012).
| NWF (NWF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 120p | MARKET VALUE: | £56.8m | |
| TOUCH: | 118-122p | 12-MONTH HIGH: | 130p | LOW: 84p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 58p* | NET DEBT: | 50% | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 264 | 1.80 | 2.80 | 1.00 |
| 2012 | 257 | 2.30 | 3.60 | 1.00 |
| % change | -3 | +28 | +29 | - |
Ex-div: 20 Mar Payment: 1 May *Includes intangible assets of £11.6m, or 25p a share Aim: Support services | ||||
