Wynnstay Group is on the hunt for acquisitions after decent half-year results that saw operating profit climb 14 per cent to £4.75m. Over half of the increase came from last May's acquisition of agricultural products supplier Wrekin Grain, and plans for a major move into eastern England should bring further gains.
Humberside and South Yorkshire are an obvious target, because the company wants to be able to sell to both arable and livestock farmers in the same locality. And although the agricultural business suffered due to lower demand from cattle owners because of the mild winter, that was offset by increased orders for poultry feed and a healthy contribution from fertiliser trading, which lifted the division's profits by £700,000 to £2.92m.
By contrast, profits on the retail side stood still at just over £2m. Its farmers' stores performed well, although a change of product mix reduced margins, but its Just for Pets outlets bore increased marketing and promotional costs. This May, Wynnstay increased the number of its farmers' outlets through the acquisition of a small business in Gloucestershire, and further bolt-on deals are expected.
With agricultural prices holding up, Wynnstay reports "favourable prospects" for the current six months. Broker WH Ireland expects adjusted pre-tax profits of £7.60m and EPS of 34.1p this year (from £7.4m and 32.8p in 2011).
WYNNSTAY GROUP (WYN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 385p | MARKET VALUE: | £64.3m | |
| TOUCH: | 380-390p | 12-MONTH HIGH: | 408p | LOW: 328p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 327p* | NET DEBT: | 19% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 165 | 3.97 | 17.9 | 2.60 |
| 2012 | 194 | 4.52 | 20.3 | 2.85 |
| % change | +18 | +14 | +13 | +10 |
Ex-div: 26 September Payment: 31 October *Includes intangible assets of £15m, or 90p a share. | ||||
