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Impairments weigh on Wynnstay

Goodwill and impairment charges on the Just for Pets division dragged on pre-tax profit
June 21, 2017

Goodwill and impairment charges of £3.9m due to subdued demand at Wynnstay 's (WYN) retail operation Just for Pets caused the group's pre-tax profit to tumble, taking earnings per share with it. But strip out the one-off fee and profit before tax was flat on the previous year at £4.07m - further exclude the pet products operation and the group's profitability improved year on year.

IC TIP: Hold at 578p

The agriculture division, the biggest contributor to revenue at 71 per cent, saw operating profit fall to £1.5m from £1.8m in the previous comparable period, as a result of low volumes in traded grain and margin pressures on other agricultural products. Improvements in grain and milk prices encouraged farmers to buy more feed over the winter, but demand dropped off during the latter part of the period, as spring grass came early this year. In its retail division, Wynnstay Stores saw like-for-like sales improve by 2 per cent thanks to demand for milk powders, and animal health and hardware products.

Analysts at Shore Capital expect pre-tax profit of £7.1m for the year to October 2017, giving EPS of 29p, compared with £7.4 and 30.1p in FY2016.

WYNNSTAY (WYN)
ORD PRICE:578pMARKET VALUE:£113m
TOUCH:570-585p12-MONTH HIGH:679pLOW: 385p
DIVIDEND YIELD:2.1%PE RATIO:61
NET ASSET VALUE: 436pNET DEBT:10%

Half-year to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20161934.117.24.00
20172050.1-3.44.20
% change+6-97-120+5

Ex-div: 28 Sep

Payment: 31 Oct