A tough time for farming, which has seen milk sold below the cost of production, has filtered down to agriculture supplies company Wynnstay (WYN). The impact of price deflation on its farming customers meant they sought to spend less, which contributed to the 12 per cent drop in operating profit to £7.4m. Feed volumes in its agriculture division were down slightly as some farmers opted to mix their own feed rather than buying the higher priced pre-mixed compound feed, resulting in some pressure on margins.
Chief executive Ken Greetham said rebounding milk prices coupled with weaker sterling - which supports the farming community's exports including the 95,000 tonnes of lamb the UK exports each year - meant farmers were now returning to compound feed products. Rejuvenated incomes in farming were arguably evident in its specialist retail division, too, where sales rose 10 per cent to £118m. Profit there fell because of the longer integration period of its October 2015 acquisition of Agricentre and the cost of opening new Just for Pets stores.
Analysts at Shore Capital expect pre-tax profit of £7.9m for the year to October 2017, leading to EPS of 32.3p, compared with £7.4m and 30.1p in FY2016.
| WYNNSTAY (WYN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 553p | MARKET VALUE: | £108m | |
| TOUCH: | 550-555p | 12-MONTH HIGH: | 568p | LOW: 385p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 446p* | NET CASH: | £4.3m | |
| Year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 376 | 7.8 | 35.0 | 8.5 |
| 2013 | 413 | 8.0 | 36.4 | 9.3 |
| 2014 | 414 | 8.5 | 35.3 | 10.2 |
| 2015 | 377 | 8.3 | 34.7 | 11.1 |
| 2016 | 368 | 7.3 | 30.0 | 12.0 |
| % change | -2 | -13 | -13 | +8 |
Ex-div: 30 Mar Payment: 28 Apr *Includes intangible assets of £18.1m, or 93p a share | ||||
