Wynnstay FY profit to be 'significantly ahead' of market forecasts
Agricultural supplies company Wynnstay said on Wednesday that FY 2020 underlying pre-tax profit is set to be "significantly ahead" of current market forecasts after better-than-expected trading since June.
In an update on trading for the year to the end of October, the company said overall trading since the interim results in June has been stronger than anticipated, especially in September and October. This was across both the agriculture and specialist agricultural merchanting divisions.
Wynnstay said that while the expected difficulties in arable activities materialised in the second half, trading across other activities has been resilient.
"As expected, the poor planting conditions in autumn 2019 resulted in a historically low yield from the 2020 UK cereal harvest,"” it said. "Wheat volumes declined by an estimated 40% on the previous year, limiting volumes available for the group's grain trading operation. Seed sales were also lower, with farmers using last year's unplanted product. However, the group has benefited from better-than-expected feed sales in September and October. Sales from the specialist agricultural merchanting depot network also performed well, helped by a stronger red meat sector."
More generally, the company said the outlook for agriculture and farm commodities in the UK remains positive despite Brexit-related uncertainties and that it is well placed to take advantage of the opportunities that are expected to present themselves.
Wynnstay also announced some board and organisational changes following a review of its structure. These changes include the creation of new roles with new areas of responsibility, as well as revised reporting lines.
The new organisational structure will not include the board position of Agricultural Director. As a result, Andrew Evans will step down with effect from 1 December, but remain a member of the senior management team. He will take up his new role of group operations and deed director and lead the reorganisation at senior executive level.
At 1305 GMT, the shares were up 12.4% at 348.50p.