NWF revealed a boost to its feeds business from the dismal
UK weather as the fuels-to-warehousing group unveiled a 28% jump in pre-tax
profits, and underlined its appetite for growing in agriculture.
The 141-year-old company, formerly
known North Western Farmers, said that operating profits in its feeds division
soared to £1.6m in the June-to-November period, from £600,000 a year before,
beating company expectations.
The increase in the division, which provides feed
for one-in-seven UK dairy cows, reflected a 10.1% rise to £66.2m in revenues,
underpinned by the quest by farmers for feed as doffer crops failed in the wettest
summer in a century, and pasture condition deteriorated.
"Market volumes increased in the period as a result
of the poor grazing conditions through the wet summer and autumn, and inferior
silage quality," NWF said.
Appetite for deals
And the group - whose food storage business has been hurt by
a "slower-than-anticipated" pace of contract wins – restated its appetite for
further growth in its historic agriculture field, including by acquisition.
"We are continuing to work on development plans with a
particular emphasis on opportunities in the agriculture markets," Mark Hudson,
the NWF chairman, said.
A person close to the company said the group was "actively
looking for bolt-on acquisitions in the agriculture side", having already built
up the fuels business through takeovers such as that of Evesons two
"They feel agriculture offers the best chance for profitable
Companies including Wynnstay, the feed-to-grain trading
group, have also unveiled an interest in UK agriculture deals.
The group's overall results, showing a rise in pre-tax
profits to £2.9m despite a 2.7% drop to £265.5m in revenues, were deemed "robust"
by Charles Stanley analyst Peter Ashworth, who restated an "add" rating on NWF
shares, with a price target of 135p.
Mr Ashworth added: "The prospect remains for potential price
increases for the milk at the wholesale level which is positive for farmers,"
and would improve market conditions for suppliers to dairy farmers.
Share Capital, saying the results "look to be in line with
market expectations", kept a "buy" rating on NWF shares, as did Peel Hunt
analyst Charles Hall, who raised to 137p, from 115p, his target price for the
"We expect the company to start to deliver on its strategy
to increase focus on the agribusiness sector," Mr Hall said.
NWF shares closed 2.5% lower at 116p in