NWF Group trades in line in first half

Fuel, food and feed distributor NWF Group reported a first-half performance in line with its expectations on Tuesday, with revenue falling 11.3% to £309.4m.

The AIM-traded firm said its headline operating profit for the half-year ended 30 November was 14.3% lower at £3m, while headline profit before tax was 16.7% weaker at £2.5m.

Its fully-diluted headline earnings per share were off 15.7% at 4.3p, while net debt excluding IFRS 16 lease liabilities were down 10.7% at £16.5m.

The company’s net debt-to-headline EBITDA ratio was 0.9x, compared to 1.0x in the same period of 2019.

The board declared an interim dividend of 1p per share, in line with the half-year distribution a year earlier.

NWF said the results were behind the prior year as expected, adding that its resilience was demonstrated by consistent trading despite Brexit uncertainty and the ongoing challenge of the Covid-19 pandemic.

The group said its financial position remained “very strong”, with leverage at less than 1.0x providing capacity for continued investment in support of strategic initiatives, the pursuit of further acquisition opportunities in the fuels division, and a maintained interim dividend.

Its board also confirmed that the cyber incident at the end of October had been successfully contained, and had not materially impacted its trading or commercial performance.

All divisions were fully operational in the current lockdown condition, with employees designated as key workers and no significant change in demand levels.

On a divisional basis, the firm said headline operating profit in fuels was £1.9m, up from £1.4m year-on-year.

It reported positive trading across its network, with increased underlying sales of gas oil offsetting lower underlying demand for heating oil and diesel, alongside a positive contribution from acquisitions.

In the food division, headline operating profit slid to £0.5m from £1.4m, although there was increased activity with the company’s new Crewe warehouse fully operational and performing as planned.

Significant demand volatility was reported due to the Covid-19 lockdowns and Brexit, creating inefficient working in the short-term and a changed business mix, with a lower proportion of high value food service volumes.

In feeds, the company saw headline operating profit of £0.6m, slipping from £0.7m in the first half of 2019.

It said there was stable performance in the division, with lower feed volumes offset by a focus on cost control and commodity purchasing in highly volatile commodity markets.

“We had a solid first half with trading in line with our expectations and those for the full year remain unchanged,” said chief executive officer Richard Whiting.

“This performance is a further demonstration of the resilience of the group, which given the challenges of keeping our people safe, managing demand volatility and responding to a cyber incident have demonstrated our teams' strong capabilities.

“We remain confident in our growth potential and our strong financial position gives us the flexibility and capacity to continue to target development opportunities.”

At 1457 GMT, shares in NWF Group were up 4.21% at 198p.