It’s been a strange year for British weather, but much to the benefit of NWF (NWF). A long, cold winter generated strong demand for heating oil, while chief executive Richard Whiting said the group’s 19 depots across the country allowed for speedy delivery to customers. As such, operating profit from the fuel division rose by 53 per cent to £6.9m.
NWF is the third-largest operator in the fuel distribution industry, but this equates to just a 2 per cent share of the market. Mr Whiting said the high level of market fragmentation should present good acquisition opportunities to help NWF expand its coverage across the UK.
Elsewhere, the food division took on 20,000 pallets of new business after multiple contract wins, although Mr Whiting said the speed at which these additional contracts came through actually added to costs as more staff were brought on. Thankfully, this new business should help compensate for the loss of Princes, previously NWF’s largest customer. Operating profit in the division fell 77 per cent to £0.7m as a result, but analysts expect profits to recover back to £1.3m once the new work beds in.
Analysts at Peel Hunt expect pre-tax profit of £9.1m in the year to May 2019, giving EPS of 14.9p, compared with £10.2m and 16.7p in FY2018.
| NWF (NWF) | ||||
| ORD PRICE: | 195p | MARKET VALUE: | £95m | |
| TOUCH: | 190-200p | 12-MONTH HIGH: | 213p | LOW: 148p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 91p* | NET DEBT: | 14% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 538 | 6.9 | 11.2 | 5.1 |
| 2015 | 492 | 7.9 | 12.9 | 5.4 |
| 2016 | 466 | 6.0 | 9.8 | 5.7 |
| 2017 | 556 | 6.7 | 11.3 | 6.0 |
| 2018 | 611 | 9.7 | 16.0 | 6.3 |
| % change | +10 | +45 | +42 | +5 |
| Ex-div: | 1 Nov | |||
| Payment: | 6 Dec | |||
| *Includes £22.2m of intangible assets, or 46p a share | ||||
