In This Article:
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Revenue: GBP 454 million, a decrease of 3.9% compared to the prior year.
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Headline Operating Profit: GBP 5 million, up from GBP 4 million in the prior year.
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Cash Position: GBP 11.4 million at the period end.
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Interim Dividend: Maintained at 1 penny per share.
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Fuels Operating Profit: GBP 1.7 million, up from GBP 0.7 million in the prior period.
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Food Operating Profit: GBP 2.5 million, down from GBP 2.9 million in the prior period.
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Feed Operating Profit: GBP 0.8 million, up from GBP 0.4 million in the prior period.
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Volume Growth in Feeds: 9.3%, exceeding the market growth of 4.2%.
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Exceptional Items: Cost of GBP 1.1 million, including GBP 0.4 million for restructuring in fuels.
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Net Cash Position: GBP 11.4 million at the end of the period.
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Cash Conversion: Just over 70%, compared to 55% in the prior period.
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Return on Capital: 17.8%.
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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NWF Group PLC (LSE:NWF) reported a strong first half performance with headline EBITDA, operating profit, and profit before tax all higher than the prior year.
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The company maintained a robust cash position with GBP 11.4 million at the period end, despite significant investments.
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The fuels segment saw stable volumes with stronger margins and a lower cost base, benefiting from elevated demand for domestic heating oil.
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The feed business outperformed the market with a 9.3% volume growth, driven by favorable market conditions and strategic investments.
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NWF Group PLC (LSE:NWF) has a strong M&A pipeline, particularly in the fuels segment, with several discussions well advanced.
Negative Points
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Overall revenue decreased by 3.9% compared to the prior year, primarily due to lower commodity prices and product mix within the fuels business.
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The food segment faced challenges with slower customer pipeline growth and higher than anticipated startup costs at the Lymedale warehouse.
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Exceptional costs of GBP 1.1 million were incurred, including restructuring costs and an ongoing investigation into a conflict of interest in the food business.
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Finance costs increased from GBP 0.8 million to GBP 1.5 million, largely due to IFRS 16 interest related to the Lymedale warehouse lease.
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The market normalization in the fuels segment has led to reduced profitability compared to the higher margins experienced during COVID and the initial phase of the Ukraine war.
Q & A Highlights
Q: Could you elaborate on the significant increase in like-for-like sales in the feed business? Is it due to new customers, a greater share of wallets, or more salespeople? How sustainable is this growth? A: The growth is due to both existing customers feeding more and winning new business. The market conditions, such as rising milk prices, are beneficial, but if milk prices fall, volumes might be pressured. However, we hope to retain the new business we've acquired. (Christopher Belsham, Chief Executive)