Wynnstay buys farm supplies unit, says trading in line

Agricultural and retail group Wynnstay has reached an agreement with TG Jeary on terms for the acquisition of its West Country farm supplies operation, Agricentre business and certain related assets for an undisclosed sum.

Wynnstay, which expects the acquisition to complete on 30 October, said it will fund the acquisition through existing banking facilities.

Agricentre operates a network of eight outlets supplying a wide range of agricultural inputs including animal healthcare, dairy hygiene and animal nutrition products as well as feed related equipment and other hardware.

It has historically generated annualised sales of approximately £15m and for the current financial year is expected to show a small operating loss.

Wynnstay said the deal was an important strategic move, extending its trading presence into a major new geographic region.

The company said it expects to integrate the business into its existing stores network and to significantly enhance Agricentre's product range and operational efficiencies. However the full benefits of the acquisition are not expected to come through for 12 months.

The company also said on Monday that following satisfactory trading in the second half of the financial year to date, final results for the 12 months to 31 October 2015, before acquisition costs, are expected to be in line with market expectations.

Chief executive officer Ken Greetham said: “UK farmers are currently facing challenges, with low farmgate prices particularly for milk. While the trading backdrop remains challenging, we remain positive about the long term opportunities driven by world food demand, and continue to focus on assisting farmers with the drive for enhanced efficiencies in production."

At 0855 BST, Wynnstay shares were down 0.7% at 530p.