TIDMNWF
RNS Number : 3326O
NWF Group PLC
29 January 2019
NWF Group plc
For release 7.00 a.m. 29 January 2019
NWF Group plc
NWF Group plc: Half Year results for the period ended 30
November 2018
NWF Group plc ('NWF' or the Group), the specialist distributor
of fuel, food and feed across the UK, today announces its half year
results for the period ended 30 November 2018.
Financial highlights H1 2018 H1 2017 %
------------------------------ ------------ ------------ --------
Revenue GBP330.5m GBP295.8m +11.7%
Headline operating profit* GBP2.6m GBP2.4m +8.3%
Headline profit before
taxation* GBP2.4m GBP2.2m +9.1%
Fully diluted headline
earnings per share* 3.8p 3.6p +5.6%
Interim dividend per share 1.0p 1.0p -
Net debt GBP14.8m GBP16.3m
Net debt to EBITDA 1.0x 1.2x
Statutory results
Operating profit GBP2.3m GBP2.4m (4.2%)
Profit before taxation GBP1.9m GBP1.9m -
Fully diluted earnings
per share 2.8p 3.1p (9.7%)
* Headline operating profit excludes exceptional items (see note
4). Headline profit before taxation excludes exceptional items and
the net finance cost in respect of the Group's defined benefit
pension scheme. Diluted headline earnings per share also takes into
account the taxation effect thereon.
Operational highlights:
-- Revenue growth from increased activity in Food and Feeds and higher commodity prices
-- Delivery of planned profit improvements in Food
-- Acquisition in the Fuels market in December 2018 in line with strategy
-- Board's full year expectations for trading performance and net debt levels unchanged
Divisional highlights:
-- Fuels - headline operating profit of GBP0.9 million (H1 2017:
GBP1.1 million). A warm summer reduced demand for heating oil with
performance in the autumn months as planned.
-- Food - headline operating profit of GBP1.0 million (H1 2017:
GBP0.9 million). Profit in line with our expectations,
demonstrating a strong recovery as planned from the second half of
FY18, benefiting from new business won in the last 12 months.
-- Feeds - headline operating profit of GBP0.7 million (H1 2017:
GBP0.4 million). Benefits delivered from strong demand over the
summer months, when grazing conditions were poor, and the
investment made in prior years.
Richard Whiting, Chief Executive, NWF Group plc, commented:
"NWF has delivered profit improvement in line with our
expectations in the first half year with each of the divisions
performing as planned. The profit recovery in Food and the strong
performance of Feeds over the summer are of particular note. It was
pleasing to report delivery on our strategy with the acquisition of
Midland Fuel Oil Supplies after the period end. Current trading is
in line with the Board's expectations for the full financial
year."
To view a short video of the results presentation please follow
this link: http://bit.ly/NWF_H1_19
Information for investors, including analyst consensus
forecasts, can be found on the Group's website at www.nwf.co.uk
Richard Whiting, Chief Reg Hoare / Justin Jones /
Executive Patrick Hanrahan Mike Bell
Chris Belsham, Finance MHP Communications Peel Hunt LLP (Nominated adviser)
Director Tel: 020 3128 Tel:0 020 7418 8900
NWF Group plc 8100
Tel: 01829 260 260
CHAIRMAN'S STATEMENT
NWF has continued its development as planned in the first half
year. Fuels delivered in line with expectations with a weaker
summer market offset by stronger results in the autumn. The
acquisition in December 2018 of Midland Fuel Oil Supplies
demonstrates our strategic ambitions in that market. Food has
increased profits significantly from the end of the prior year with
higher activity levels from new customers won in the last 12
months. Feeds benefited from meeting the increased demand from our
customers over the summer months to support the nutrition of dairy
herds when grazing conditions were poor.
Results
Revenue for the half year ended 30 November 2018 was 11.7%
higher at GBP330.5 million (H1 2017: GBP295.8 million) as a result
of increased activity in Food and Feeds and higher commodity prices
in the period. Headline operating profit(1) was higher at GBP2.6
million (H1 2017: GBP2.4 million), with the increases in Food and
Feeds more than offsetting the reduction in Fuels. Headline profit
before taxation(1) was GBP2.4 million (H1 2017: GBP2.2
million).
Headline basic earnings per share(1) was 3.8p (H1 2017: 3.6p)
and headline diluted earnings per share(1) was 3.8p (H1 2017:
3.6p).
Net cash absorbed by operations for the period amounted to
GBP4.9 million (H1 2017: net cash absorbed of GBP0.6 million). The
normal seasonal trading pattern results in a cash outflow in the
first half with increased activity in Feeds absorbing cash in
working capital in the first half.
Net capital expenditure in the period was GBP1.4 million (H1
2017: GBP1.6 million) reflecting normal replacement capex as
planned.
Net debt at the period end was lower at GBP14.8 million (H1
2017: GBP16.3 million), reflecting profit improvement and effective
management of working capital in spite of increased demand in Feeds
over the period. Net debt to EBITDA reduced to 1.0x (H1 2017:
1.2x). The Group's banking facilities of GBP65.0 million are
committed to October 2023 and NWF continues to operate with
substantial headroom.
Net assets at 30 November 2018 increased to GBP46.9 million (30
November 2017: GBP39.6 million) largely due to the decrease in the
accounting valuation of the pension scheme deficit. The IAS 19R
valuation has decreased from GBP19.0 million to GBP15.4 million
primarily as a result of an increase in the discount rate from
2.70% to 3.25%.
1 Headline operating profit excludes exceptional items (see note
4). Headline profit before taxation excludes exceptional items and
the net finance cost in respect of the Group's defined benefit
pension scheme. Diluted headline earnings per share also takes into
account the taxation effect thereon.
Dividend
The Board has approved an interim dividend per share of 1.0p (H1
2017: 1.0p). This will be paid on 1 May 2019 to shareholders on the
register as at 22 March 2019. The shares will trade ex-dividend on
21 March 2019. The Group has a progressive dividend policy and has
increased the annual dividend by c. 5% in nine of the last ten
years.
Operations
Fuels
Revenue increased by 12.0% to GBP222.4 million (H1 2017:
GBP198.5 million) as a result of higher oil prices. Headline
operating profit was GBP0.9 million (H1 2017: GBP1.1 million).
Volumes reduced by 2.2% to 263 million litres (H1 2017: 269
million litres) with lower heating oil and diesel sales,
particularly in the summer months, partially offset by increased
gas oil sales. Brent Crude increased during the first half to an
average of $75.04 per barrel (H1 2017: $54.11 per barrel) and ended
the reporting period at $58.71 per barrel.
In line with our strategy we acquired Midland Fuel Oil Supplies
in December 2018, a 12 million litres fuel distributor which
consolidates our market position to the South and East of
Birmingham.
Food
Revenue increased by 22.1% to GBP23.8 million (H1 2017: GBP19.5
million). Headline operating profit was GBP1.0 million (H1 2017:
GBP0.9 million).
As anticipated, storage volumes increased to 96,000 pallet
spaces (H1 2017: 89,000). This increase results from the new
business won in the last 12 months to support the long-term future
of the Wardle site.
Activity measured in the number of loads was significantly
higher than prior year as the new customers have a greater stock
turn which increases outload requirements. We have completed a
successful trial as an Aldi platform provider and continue to
develop this business opportunity.
The Palletline operation continued its planned development and
we now have four customers utilising our e-fulfilment operations
which continue to expand.
Feeds
Revenue increased by 8.4% to GBP84.3 million (H1 2017: GBP77.8
million) as a result of increased volumes and higher commodity
prices. Headline operating profit was GBP0.7 million (H1 2017:
GBP0.4 million) benefiting from increased volumes.
Volumes were 5.3% higher at 279,000 tonnes (H1 2017: 265,000
tonnes) as farmers utilised more feed, particularly over the summer
months when grazing conditions were poor and our nutritionists
advised higher feed rates to maintain milk output. Fodder stocks
are now at broadly normal levels across the country following a
positive autumn period.
The market experienced inflationary pressures during the period
with increased commodity prices being passed through to farmers.
Whilst milk prices increased over the summer months to over 30p per
litre, with increased feed usage and prices this broadly offset the
revenue gains for farmers. Milk price cuts have subsequently been
announced by a number of dairies which increases pressure on farm
incomes going forward. Average milk prices at the end of November
were 31.8p per litre (November 2017: 31.7p per litre).
Our operational platform, with key mills close to customers in
the North, Central and Southern regions, delivered the expected
efficiencies and provides an effective base for future
development.
Outlook and future prospects
The Group has continued to perform as planned since the period
end. In Fuels, the normal seasonal increase in heating and gas oil
has been delivered successfully in a market with increased oil
price volatility. The acquisition of Midland Fuel Oil Supplies was
completed in December 2018. In Food, activity levels continue at
their higher rates and customers are considering their options for
storing additional stock as a contingency against a hard Brexit.
This is against a backdrop of limited warehouse capacity available
in the market. In Feeds, following outperformance in the first
half, volumes have been a little lower in the ruminant market as
farmers look to reduce feed bills.
We continue to focus on growth initiatives, both organic and
through targeted acquisitions. We also continue to monitor the
various Brexit scenarios and make plans as necessary.
Overall the Group continues to trade in line with the Board's
expectations for the full financial year and I look forward to
updating shareholders later this year.
Philip Acton
Chairman
29 January 2019
Condensed consolidated income statement
for the half year ended 30 November 2018 (unaudited)
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
Note GBPm GBPm GBPm
------------------------------------ ------- ------------- ------------- --------
Revenue 3 330.5 295.8 611.0
Cost of sales and administrative
expenses (327.9) (293.4) (600.4)
------------------------------------ ------- ------------- ------------- --------
Headline operating profit(1) 2.6 2.4 10.6
Exceptional items 4 (0.3) - -
------------------------------------ ------- ------------- ------------- --------
Operating profit 3 2.3 2.4 10.6
Finance costs 5 (0.4) (0.5) (0.9)
------------------------------------ ------- ------------- ------------- --------
Headline profit before taxation(1) 2.4 2.2 10.2
Exceptional items 4 (0.3) - -
Net finance cost in respect
of the defined benefit pension
scheme (0.2) (0.3) (0.5)
Profit before taxation 1.9 1.9 9.7
Income tax expense(2) 6 (0.5) (0.4) (1.9)
------------------------------------ ------- ------------- ------------- --------
Profit for the period attributable
to equity shareholders 1.4 1.5 7.8
------------------------------------ ------- ------------- ------------- --------
Earnings per share (pence)
Basic 7 2.8 3.1 16.0
Diluted 7 2.8 3.1 15.9
------------------------------------ ------- ------------- ------------- --------
Headline earnings per share
(pence)(1)
Basic 7 3.8 3.6 16.8
Diluted 7 3.8 3.6 16.7
------------------------------------ ------- ------------- ------------- --------
1 Headline operating profit is statutory operating profit of
GBP2.3 million (H1 2017: GBP2.4 million) before exceptional items
of GBP0.3 million (H1 2017: GBPNil). Headline profit before
taxation is statutory profit before taxation of GBP1.9 million (H1
2017: GBP1.9 million), after adding back the net finance cost in
respect of the Group's defined benefit pension scheme of GBP0.2
million (H1 2017: GBP0.3 million), and the exceptional items.
Headline earnings per share also takes into account the taxation
effect thereon.
2 Taxation on exceptional items in the current period has
reduced the charge by GBPNil (H1 2017: GBPNil).
Condensed consolidated statement of comprehensive income
for the half year ended 30 November 2018 (unaudited)
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- --------
Profit for the period attributable
to equity shareholders 1.4 1.5 7.8
Items that will never be reclassified
to profit or loss:
Re-measurement gain on the defined
benefit pension scheme 1.5 0.5 2.0
Tax on items that will never be
reclassified to profit or loss (0.3) (0.1) (0.4)
--------------------------------------- ------------- ------------- --------
Total comprehensive income for
the period 2.6 1.9 9.4
--------------------------------------- ------------- ------------- --------
The notes form an integral part of this condensed consolidated
half year report.
Condensed consolidated balance sheet
as at 30 November 2018 (unaudited)
30 November 30 November 31 May
2018 2017 2018
Note GBPm GBPm GBPm
----------------------------------- ----- ------------ ------------ -------
Non-current assets
Property, plant and equipment 44.8 45.8 45.7
Intangible assets 22.1 22.8 22.2
Deferred income tax assets 2.8 3.2 3.1
----------------------------------- ----- ------------ ------------ -------
69.7 71.8 71.0
----------------------------------- ----- ------------ ------------ -------
Current assets
Inventories 5.3 4.6 5.7
Trade and other receivables 80.0 68.6 64.1
Cash and cash equivalents 1.0 0.6 0.5
Derivative financial instruments 8 0.2 0.2 0.2
----------------------------------- ----- ------------ ------------ -------
86.5 74.0 70.5
----------------------------------- ----- ------------ ------------ -------
Total assets 156.2 145.8 141.5
----------------------------------- ----- ------------ ------------ -------
Current liabilities
Trade and other payables (74.1) (65.2) (67.5)
Current income tax liabilities (0.4) (0.6) (1.1)
Borrowings 8 - (0.1) (0.1)
Contingent deferred consideration - (0.9) (0.8)
(74.5) (66.8) (69.5)
----------------------------------- ----- ------------ ------------ -------
Non-current liabilities
Borrowings 8 (15.8) (16.8) (6.8)
Deferred income tax liabilities (3.5) (3.3) (3.6)
Retirement benefit obligations (15.4) (19.0) (17.1)
Provisions (0.1) (0.3) (0.1)
----------------------------------- ----- ------------ ------------ -------
(34.8) (39.4) (27.6)
----------------------------------- ----- ------------ ------------ -------
Total liabilities (109.3) (106.2) (97.1)
----------------------------------- ----- ------------ ------------ -------
Net assets 46.9 39.6 44.4
----------------------------------- ----- ------------ ------------ -------
Equity
Share capital 9 12.2 12.2 12.2
Share premium 0.9 0.9 0.9
Retained earnings 33.8 26.5 31.3
----------------------------------- ----- ------------ ------------ -------
Total equity 46.9 39.6 44.4
----------------------------------- ----- ------------ ------------ -------
The notes form an integral part of this condensed consolidated
half year report.
Condensed consolidated statement of changes in equity
for the half year ended 30 November 2018 (unaudited)
Share Share Retained Total
capital premium earnings equity
GBPm GBPm GBPm GBPm
---------------------------------------------- --------- --------- ---------- --------
Balance at 1 June 2017 12.1 0.9 24.7 37.7
---------------------------------------------- --------- --------- ---------- --------
Profit for the period - - 1.5 1.5
Items that will never be reclassified
to profit or loss:
Re-measurement gain on the defined
benefit pension scheme - - 0.5 0.5
Tax on items that will never be reclassified
to profit or loss - - (0.1) (0.1)
---------------------------------------------- --------- --------- ---------- --------
Total comprehensive income for the
period - - 1.9 1.9
---------------------------------------------- --------- --------- ---------- --------
Transactions with owners:
Issue of shares 0.1 - (0.1) -
Value of employee services - - - -
---------------------------------------------- --------- --------- ---------- --------
0.1 - (0.1) -
---------------------------------------------- --------- --------- ---------- --------
Balance at 30 November 2017 12.2 0.9 26.5 39.6
---------------------------------------------- --------- --------- ---------- --------
Profit for the period - - 6.3 6.3
Items that will never be reclassified
to profit or loss:
Re-measurement gain on the defined
benefit pension scheme - - 1.5 1.5
Tax on items that will never be reclassified
to profit or loss - - (0.3) (0.3)
---------------------------------------------- --------- --------- ---------- --------
Total comprehensive income for the
period - - 7.5 7.5
---------------------------------------------- --------- --------- ---------- --------
Transactions with owners:
Dividend paid - - (2.9) (2.9)
Issue of shares - - - -
Value of employee services - - 0.2 0.2
---------------------------------------------- --------- --------- ---------- --------
- - (2.7) (2.7)
---------------------------------------------- --------- --------- ---------- --------
Balance at 31 May 2018 12.2 0.9 31.3 44.4
---------------------------------------------- --------- --------- ---------- --------
Profit for the period - - 1.4 1.4
Items that will never be reclassified
to profit or loss:
Re-measurement gain on the defined
benefit pension scheme - - 1.5 1.5
Tax on items that will never be reclassified
to profit or loss - - (0.3) (0.3)
---------------------------------------------- --------- --------- ---------- --------
Total comprehensive income for the
period - - 2.6 2.6
---------------------------------------------- --------- --------- ---------- --------
Transactions with owners:
Issue of shares - - - -
Value of employee services - - (0.1) (0.1)
---------------------------------------------- --------- --------- ---------- --------
- - (0.1) (0.1)
---------------------------------------------- --------- --------- ---------- --------
Balance at 30 November 2018 12.2 0.9 33.8 46.9
---------------------------------------------- --------- --------- ---------- --------
The notes form an integral part of this condensed consolidated
half year report.
Condensed consolidated cash flow statement
for the half year ended 30 November 2018 (unaudited)
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
------------------------------------------------ ------------- ------------- --------
Cash flows from operating activities
Headline operating profit 2.6 2.4 10.6
Adjustments for:
Depreciation and amortisation 2.3 2.3 4.5
Contributions to pension scheme not recognised
in income statement (0.8) (0.5) (1.3)
Other (0.1) (0.1) 0.1
------------------------------------------------ ------------- ------------- --------
Operating cash flows before movements
in working capital 4.0 4.1 13.9
Movements in working capital:
Decrease/(increase) in inventories 0.4 (0.4) (1.5)
Increase in receivables (15.9) (7.3) (2.8)
Increase in payables 6.6 3.0 5.3
Utilisation of provision - - (0.2)
------------------------------------------------ ------------- ------------- --------
Net cash (absorbed by)/generated from
operations (4.9) (0.6) 14.7
Interest paid (0.2) (0.2) (0.4)
Income tax paid (1.1) (0.4) (1.4)
------------------------------------------------ ------------- ------------- --------
Net cash (absorbed by)/generated from
operating activities (6.2) (1.2) 12.9
------------------------------------------------ ------------- ------------- --------
Cash flows from investing activities
Purchase of intangible assets (0.1) (0.1) (0.2)
Purchase of property, plant and equipment (1.3) (1.5) (2.9)
Payment of contingent consideration (0.8) (0.5) (0.5)
Proceeds on sale of property, plant and
equipment - - 0.2
Net cash absorbed by investing activities (2.2) (2.1) (3.4)
------------------------------------------------ ------------- ------------- --------
Cash flows from financing activities
Increase in bank borrowings 9.0 3.0 (7.0)
Capital element of finance lease and
hire purchase payments (0.1) (0.1) (0.1)
Dividends paid - - (2.9)
------------------------------------------------ ------------- ------------- --------
Net cash generated from/(absorbed by)
financing activities 8.9 2.9 (10.0)
------------------------------------------------ ------------- ------------- --------
Net movement in cash and cash equivalents 0.5 (0.4) (0.5)
Cash and cash equivalents at beginning
of period 0.5 1.0 1.0
------------------------------------------------ ------------- ------------- --------
Cash and cash equivalents at end of period 1.0 0.6 0.5
------------------------------------------------ ------------- ------------- --------
The notes form an integral part of this condensed consolidated
half year report.
Notes to the condensed consolidated half year report
for the half year ended 30 November 2018 (unaudited)
1. General information
NWF Group plc ('the Company') is a public limited company
incorporated and domiciled in the UK under the Companies Act 2006.
The address of its registered office is NWF Group plc, Wardle,
Nantwich, Cheshire CW5 6BP.
The Company has its primary listing on AIM, part of the London
Stock Exchange.
These condensed consolidated interim financial statements
('interim financial statements') were approved by the Board for
issue on 29 January 2019.
These interim financial statements do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. The interim financial statements for the half years ended 30
November 2018 and 30 November 2017 are neither audited nor reviewed
by the Company's auditors. Statutory accounts for the year ended 31
May 2018 were approved by the Board of Directors on 31 July 2018
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
2. Basis of preparation and accounting policies
Except as described below, these interim financial statements
have been prepared in accordance with the principal accounting
policies used in the Company's consolidated financial statements
for the year ended 31 May 2018. These interim financial statements
should be read in conjunction with those consolidated financial
statements, which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as endorsed by
the European Union.
These interim financial statements do not fully comply with IAS
34 'Interim Financial Reporting', as is currently permissible under
the rules of AIM.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The triennial actuarial valuation of the Group's defined benefit
pension scheme was completed in the half year ended 30 November
2017, with a deficit of GBP19.1 million at the valuation date of 31
December 2016. In these interim financial statements, this
liability has been updated in order to derive the IAS 19R valuation
as of 30 November 2018. The triennial valuation resulted in Group
contributions of GBP2.1 million per annum, including recovery plan
payments of GBP1.8 million per annum for 11 years from 1 January
2018.
The Directors consider that headline operating profit, headline
profit before taxation and headline earnings per share measures,
referred to in these interim financial statements, provide useful
information for shareholders on underlying trends and performance.
Headline profit before taxation is reported profit before taxation,
after adding back the net finance cost in respect of the Group's
defined benefit pension scheme, and the exceptional items and the
taxation effect thereon where relevant. The calculations of basic
and diluted headline earnings per share are shown in note 7 of
these interim financial statements.
Certain statements in these interim financial statements are
forward looking. The terms 'expect', 'anticipate', 'should be',
'will be' and similar expressions identify forward looking
statements. Although the Board of Directors believes that the
expectations reflected in these forward looking statements are
reasonable, such statements are subject to a number of risks and
uncertainties and actual results and events could differ materially
from those expressed or implied by these forward looking
statements.
The Group has adopted IFRS 9 (Financial Instruments:
Classification and Measurement) and IFRS 15 (Revenue from Contracts
with Customers) in the financial period beginning on 1 June 2018.
IFRS 9 has introduced an expected credit loss model for recognising
impairment of financial assets held at amortised cost. IFRS 15
requires revenue to be recognised when the performance obligations
are satisfied. There were no material changes as a result of
adopting these new standards.
IFRS 16 'Leases' is effective for periods beginning on or after
1 January 2019. For the Group, transition to IFRS 16 will take
place on 1 June 2019. The standard requires lessees to recognise
assets and liabilities for all leases unless the lease term is less
than 12 months, or the asset value is low. The Group has material
operating leases and therefore the adoption of the standard is
expected to have a material impact on the financial statements of
the Group. On adoption of IFRS 16, the Group will recognise a right
of use asset and a lease liability on the balance sheet for all
applicable leases. As a result, there will be a material increase
in gross assets and a corresponding increase in gross liabilities.
Within the income statement, depreciation and interest expense will
increase and operating lease costs will decrease. The net impact on
the income statement has not yet been quantified. The impact of
IFRS 16 will continue to be reviewed to the date of adoption.
3. Segment information
The chief operating decision-maker has been identified as the
Board of Directors ('the Board'). The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. The Board has determined that the operating segments,
based on these reports, are Fuels, Food and Feeds.
The Board considers the business from a product/services
perspective. In the Board's opinion, all of the Group's operations
are carried out in the same geographical segment, namely the
UK.
The nature of the products/services provided by the operating
segments are summarised below:
Fuels - sale and distribution of domestic heating, industrial and road fuels
Food - warehousing and distribution of customers' ambient
grocery and other products to supermarket and other retail
distribution centres
Feeds - manufacture and sale of animal feeds and other agricultural products
Segment information about the above businesses is presented
below.
The Board assesses the performance of the operating segments
based on a measure of headline operating profit. Finance income and
costs are not included in the segment results which are assessed by
the Board. Other information provided to the Board is measured in a
manner consistent with that in the financial statements.
Inter-segment transactions are entered into under the normal
commercial terms and conditions that would also be available to
unrelated third parties.
Segment assets exclude deferred income tax assets and cash and
cash equivalents. Segment liabilities exclude taxation, contingent
deferred consideration, borrowings and retirement benefit
obligations. Excluded items are part of the reconciliation to
consolidated total assets and liabilities.
Half year ended 30 Fuels Food Feeds Group
November 2018 Note GBPm GBPm GBPm GBPm
------------------------------- ----- ------ ------ ------ ------
Revenue
Total revenue 225.5 24.2 84.3 334.0
Inter-segment revenue (3.1) (0.4) - (3.5)
------------------------------- ----- ------ ------ ------ ------
Revenue 222.4 23.8 84.3 330.5
------------------------------- ----- ------ ------ ------ ------
Result
Headline operating
profit 0.9 1.0 0.7 2.6
Group exceptional item 4 (0.3)
Operating profit as
reported 2.3
Finance costs 5 (0.4)
------
Profit before taxation 1.9
Income tax expense 6 (0.5)
------------------------------- ----- ------ ------ ------ ------
Profit for the period 1.4
------------------------------- ----- ------ ------ ------ ------
Other information
Depreciation and amortisation 0.7 0.8 0.8 2.3
------------------------------- ----- ------ ------ ------ ------
Fuels Food Feeds Group
As at 30 November 2018 GBPm GBPm GBPm GBPm
--------------------------------- ------- ------ ------- --------
Balance sheet
Assets
Segment assets 64.6 32.4 55.4 152.4
--------------------------------- ------- ------ -------
Deferred income tax assets 2.8
Cash and cash equivalents 1.0
--------------------------------- ------- ------ ------- --------
Consolidated total assets 156.2
--------------------------------- ------- ------ ------- --------
Liabilities
Segment liabilities (53.2) (5.3) (15.7) (74.2)
--------------------------------- ------- ------ -------
Current income tax liabilities (0.4)
Deferred income tax liabilities (3.5)
Borrowings (15.8)
Retirement benefit obligations (15.4)
--------------------------------- ------- ------ ------- --------
Consolidated total liabilities (109.3)
--------------------------------- ------- ------ ------- --------
Half year ended 30 Fuels Food Feeds Group
November 2017 Note GBPm GBPm GBPm GBPm
------------------------------- ----- ------ ------ ------ ------
Revenue
Total revenue 201.0 19.8 77.8 298.6
Inter-segment revenue (2.5) (0.3) - (2.8)
------------------------------- ----- ------ ------ ------ ------
Revenue 198.5 19.5 77.8 295.8
------------------------------- ----- ------ ------ ------ ------
Result
Headline operating
profit 1.1 0.9 0.4 2.4
------------------------------- ----- ------ ------ ------
Operating profit as
reported 1.1 0.9 0.4 2.4
Finance costs 5 (0.5)
------
Profit before taxation 1.9
Income tax expense 6 (0.4)
------------------------------- ----- ------ ------ ------ ------
Profit for the period 1.5
------------------------------- ----- ------ ------ ------ ------
Other information
Depreciation and amortisation 0.8 0.7 0.8 2.3
------------------------------- ----- ------ ------ ------ ------
Fuels Food Feeds Group
As at 30 November 2017 GBPm GBPm GBPm GBPm
----------------------------------- ------- ------ ------- --------
Balance sheet
Assets
Segment assets 58.4 31.0 52.6 142.0
----------------------------------- ------- ------ -------
Deferred income tax assets 3.2
Cash and cash equivalents 0.6
----------------------------------- ------- ------ ------- --------
Consolidated total assets 145.8
----------------------------------- ------- ------ ------- --------
Liabilities
Segment liabilities (46.3) (4.2) (15.0) (65.5)
----------------------------------- ------- ------ -------
Current income tax liabilities (0.6)
Deferred income tax liabilities (3.3)
Borrowings (16.9)
Contingent deferred consideration (0.9)
Retirement benefit obligations (19.0)
----------------------------------- ------- ------ ------- --------
Consolidated total liabilities (106.2)
----------------------------------- ------- ------ ------- --------
Fuels Food Feeds Group
Year ended 31 May 2018 Note GBPm GBPm GBPm GBPm
------------------------------- ------- ------ ------ ------ ------
Revenue
Total revenue 406.2 41.0 169.9 617.1
Inter-segment revenue (5.5) (0.6) - (6.1)
------------------------------- ------- ------ ------ ------ ------
Revenue 400.7 40.4 169.9 611.0
------------------------------- ------- ------ ------ ------ ------
Result
Headline operating
profit 6.9 0.7 3.0 10.6
------------------------------- ------- ------ ------ ------
Operating profit as
reported 6.9 0.7 3.0 10.6
Finance costs 5 (0.9)
------
Profit before taxation 9.7
Income tax expense 6 (1.9)
------------------------------- ------- ------ ------ ------ ------
Profit for the year 7.8
------------------------------- ------- ------ ------ ------ ------
Other information
Depreciation and amortisation 1.4 1.6 1.5 4.5
------------------------------- ------- ------ ------ ------ ------
Fuels Food Feeds Group
As at 31 May 2018 GBPm GBPm GBPm GBPm
----------------------------------- ------- ------ ------- -------
Balance sheet
Assets
Segment assets 54.3 30.9 52.7 137.9
Deferred income tax assets 3.1
Cash at bank and in hand 0.5
----------------------------------- ------- ------ ------- -------
Consolidated total assets 141.5
----------------------------------- ------- ------ ------- -------
Liabilities
Segment liabilities (44.7) (4.6) (18.3) (67.6)
----------------------------------- ------- ------ -------
Current income tax liabilities (1.1)
Deferred income tax liabilities (3.6)
Borrowings (6.9)
Contingent deferred consideration (0.8)
Retirement benefit obligations (17.1)
----------------------------------- ------- ------ ------- -------
Consolidated total liabilities (97.1)
----------------------------------- ------- ------ ----------------
4. Profit before taxation - exceptional items
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
------------------ ------------- ------------- --------
GMP equalisation 0.3 - -
Exceptional costs 0.3 - -
------------------ ------------- ------------- --------
On 26 October 2018, the High Court issued a judgement involving
the Lloyds Banking Group defined benefit pension schemes. The
judgement concluded that the schemes should equalise pension
benefits for men and women in relation to guaranteed minimum
pension ("GMP") benefits. The judgement has implications for many
defined benefit schemes, including the NWF Group Benefits
Scheme.
We have worked with our actuarial advisors to understand the
implications of the High Court judgement for the NWF Group Benefits
Scheme and as a result, have recorded a GBP0.3 million pre-tax
exceptional expense to reflect our best estimate of the effect on
our reported pension liabilities.
The change in pension liabilities recognised in relation to GMP
equalisation involves estimation uncertainty. It is expected that
there will be further court hearings to further clarify the
application of GMP equalisation in practice. Also, it is not yet
known whether Lloyds Banking Group will appeal the High Court
judgement. Whilst the financial statements reflect the best
estimate of the impact on pension liabilities reflecting the
information currently available, that estimate reflects several
assumptions. The Directors will continue to monitor any further
clarifications or court hearings arising from the Lloyds Banking
Group case and consider the impact on pension liabilities
accordingly.
The Directors have made the judgement that the estimated effect
of GMP equalisation on the Group's pension liabilities is a past
service cost that should be reflected through the consolidated
income statement and that any subsequent change in the estimate of
that should be recognised in other comprehensive income. The
judgement is based on the fact that the reported pension
liabilities for the NWF Group Benefits Scheme did not previously
include any amount in respect of GMP equalisation.
5. Finance costs
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
--------------------------------------- ------------- ------------- --------
Interest on bank loans and overdrafts 0.2 0.2 0.4
Net finance cost in respect of the
defined benefit pension scheme 0.2 0.3 0.5
--------------------------------------- ------------- ------------- --------
Total finance costs 0.4 0.5 0.9
--------------------------------------- ------------- ------------- --------
6. Income tax expense
The income tax expense for the half year ended 30 November 2018
is based upon management's best estimate of the weighted average
annual tax rate expected for the full financial year ending 31 May
2019 of 20.8% (H1 2017: 20.9%). The exceptional item in respect of
GMP equalisation has not been treated as a tax-deductible expense
as relief will be on a cash paid basis. As a consequence, there
will be a deferred tax impact.
7. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
---------------------------------------- -------------- ------------- --------
Earnings
Earnings for the purposes of basic
and diluted earnings per share, being
profit for the period attributable
to equity shareholders 1.4 1.5 7.8
----------------------------------------- ------------- ------------- --------
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
000s 000s 000s
--------------------------------------- ------------- ------------- --------
Number of shares
Weighted average number of shares
for the purposes of basic earnings
per share 48,720 48,646 48,658
Weighted average dilutive effect
of conditional share awards (note
9) 30 14 173
--------------------------------------- ------------- ------------- --------
Weighted average number of shares
for the purposes of diluted earnings
per share 48,750 48,660 48,831
--------------------------------------- ------------- ------------- --------
The calculation of basic and diluted headline earnings per share
is based on the following data:
Half year Half year Year
ended ended ended
30 November 30 November 31 May
2018 2017 2018
GBPm GBPm GBPm
------------------------------------ ------------- ------------- --------
Profit for the period attributable
to equity shareholders 1.4 1.5 7.8
Add back:
Net finance cost in respect of the
defined benefit pension scheme 0.2 0.3 0.5
Exceptional items 0.3 - -
Tax effect of the above - (0.1) (0.1)
------------------------------------ ------------- ------------- --------
Headline earnings 1.9 1.7 8.2
------------------------------------ ------------- ------------- --------
8. Financial instruments
The Group's financial instruments comprise cash, bank
overdrafts, invoice discounting advances, obligations under hire
purchase agreements, derivatives and various items such as
receivables and payables, which arise from its operations. There is
no significant foreign exchange risk in respect of these
instruments.
The carrying amounts of all of the Group's financial instruments
are measured at amortised cost in the financial statements, with
the exception of derivative financial instruments being forward
supply contracts. Derivative financial instruments are measured at
fair value subsequent to initial recognition.
The Group classifies fair value measurement using a fair value
hierarchy that reflects the significance of inputs used in making
measurements of fair value. The fair value hierarchy has the
following levels:
-- Level 1 fair value measurements are those derived from
unadjusted quoted prices in active markets for identical assets or
liabilities;
-- Level 2 fair value measurements are those derived from
inputs, other than quoted prices included within Level 1 above,
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
All of the Group's derivative financial instruments were
classified as Level 2 in the current and prior periods. There were
no transfers between levels in both the current and prior
periods.
The book and fair values of financial assets at 30 November 2018
are as follows:
30 November 30 November 31 May
2018 2017 2018
Total book and fair value GBPm GBPm GBPm
--------------------------------------- ------------ ------------ -------
Trade and other receivables 74.5 64.0 61.1
Financial assets carried at amortised
cost: cash and cash equivalents 1.0 0.6 0.5
Financial assets carried at fair
value: derivatives 0.2 0.2 0.2
--------------------------------------- ------------ ------------ -------
Financial assets 75.7 64.8 61.8
--------------------------------------- ------------ ------------ -------
The book and fair values of financial liabilities at 30 November
2018 are as follows:
30 November 30 November 31 May
2018 2017 2018
Total book and fair value GBPm GBPm GBPm
------------------------------------- ------------ ------------ -------
Trade and other payables 74.1 65.2 67.5
Financial liabilities carried
at amortised cost:
Hire purchase obligations repayable
within one year - 0.1 0.1
74.1 65.3 67.6
------------------------------------- ------------ ------------ -------
Floating rate invoice discounting
advances 11.8 12.8 2.8
Revolving credit facility 4.0 4.0 4.0
15.8 16.8 6.8
------------------------------------- ------------ ------------ -------
Financial liabilities 89.9 82.1 74.4
------------------------------------- ------------ ------------ -------
9. Share capital
Number
of shares Total
000s GBPm
----------------------------------- ----------- ------
Allotted and fully paid: ordinary
shares of 25p each
Balance at 31 May 2017 48,644 12.1
Issue of shares (see below) 16 0.1
----------------------------------- ----------- ------
Balance at 30 November 2017 48,660 12.2
Issue of shares - -
----------------------------------- ----------- ------
Balance at 31 May 2018 48,660 12.2
Issue of shares (see below) 90 -
----------------------------------- ----------- ------
Balance at 30 November 2018 48,750 12.2
----------------------------------- ----------- ------
During the half year ended 30 November 2018, 89,920 (H1 2017:
15,900) shares with an aggregate nominal value of GBP22,480 (H1
2017: GBP3,975) were issued under the Company's conditional
Performance Share Plan.
The maximum total number of ordinary shares that may vest in the
future in respect of conditional Performance Share Plan awards
outstanding at 30 November 2018 amounted to 1,216,945 (H1 2017:
1,124,619) shares. These shares will only be issued subject to
satisfying certain performance criteria.
10. Half Year Report
Copies of this Half Year Report are due to be sent to
shareholders on 7 February 2019. Further copies may be obtained
from the Company Secretary at NWF Group plc, Wardle, Nantwich,
Cheshire CW5 6BP, or from the Company's website at
www.nwf.co.uk.
11. 2019 financial calendar
Interim dividend paid 1 May 2019
Financial year end 31 May 2019
Full year results announcement Early August 2019
Publication of Annual Report and Accounts Late August 2019
Annual General Meeting 26 September 2019
Final dividend paid Early December 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR UWVWRKAAAUAR
(END) Dow Jones Newswires
January 29, 2019 02:00 ET (07:00 GMT)
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