Subdued start to Wynnstay’s year

A trading update from the Wynnstay Group, issued to coincide with its annual general meeting last week, reports “subdued” business activity in the first four months of its current financial year.

The Group says this reflects the downturn across the whole agricultural sector, and is broadly in line with its management’s expectations.  But it expects the company’s broad spread of activities to “provide resilience against current headwinds”.

Wynnstay’s Agricultural Division saw reduced demand for dairy feeds, due to the mild winter, but sales of beef, sheep and poultry feed products remained buoyant. After a slow start, sales of arable inputs have gained momentum over recent weeks, and now match the levels of a year ago. With farmers delaying orders, the company expects to benefit from spot trading. The volumes of grain marketed through the business are higher than at the same time last year, although margins remain under pressure.

Glasson, the Group’s feed materials wholesaling business continues to make a good contribution, although it is not budgeted to repeat last year's strong performance.

The Specialist Retail Division comprises two chains - Wynnstay Stores and Just for Pets.  The former also experienced a slow start to the period, but trading has now improved and the company expects more active trading as livestock are turned out in the spring. The integration of the eight Agricentre stores across the south of England, acquired at the end of October, is progressing well. Like-for-like sales at Just for Pets were slightly behind those of last year, but the company expects to grow through the roll-out of new stores, with new Just for Pets sites also identified.

“Wynnstay remains well placed to capitalise on opportunities in the sector, and the Group continues to view prospects over the longer term positively, as agricultural output prices return to more realistic levels,” concludes the statement.

The Group made a pre-tax profit of £8.34 million on sales of £377.38m in the year ended October 31st 2015, compared to £8.49m and £413.56m in the previous twelve months.