TIDMWYN
RNS Number : 5422D
Wynnstay Group PLC
30 June 2021
30 June 2021
AIM: WYN
Wynnstay Group Plc
("Wynnstay" or the "Group" or the "Company")
Interim Results for the Six Months ended 30 April 2021
Record pre-tax profit as sector confidence returns
KEY POINTS
Financial
-- Record underlying and reported pre-tax profit* results as sector
confidence returns, helped by:
- stronger farmgate prices, greater clarity with the completion
of EU settlement and enactment of UK Agriculture Bill
- balanced business model supplying products to both livestock
and arable farmers
-- Revenue up 9% to GBP249.71m (2020: GBP229.29m), with commodity
price inflation accounting for c.65% of the rise and a combined
first-time contribution of GBP5.5m from two bolt-on acquisitions
-- Underlying pre-tax profit*up 23% to GBP5.53m (2020: GBP4.51m)/
Reported PBT up 25% to GBP5.36m (2020: GBP4.30m)
-- Basic earnings per share, including non-recurring items up
24% to 21.62p (2020: 17.50p)
-- Net cash at 30 April 2021 increased to GBP4.01m on a pre-IFRS
16 basis (excl. leases) (30 April 2020: GBP1.28m) even after
commodity inflation and period of peak working capital utilisation
-- Net assets up to GBP101.05m/GBP5.04 per share at period end
(30 April 2020: GBP96.84m/GBP4.87 per share)
-- Interim dividend up 8.7% to 5.00p (2020: 4.60p)
Operational
-- Agriculture Division - revenue of GBP180.72m (2020: GBP166.41m),
operating profit before non-recurring items up 21% to GBP2.20m
(2020: GBP1.81m)
- feed activity performed very well - manufactured volumes
recovered strongly, buoyed by more normal winter weather
pattern and improved farmgate prices
- weaker performance from arable operations, as expected
- with last year's exceptionally poor planting season and
poor harvest, impacting grain trading and seed sales in
line with national trend
- Glasson activity performed well
-- Specialist Agricultural Merchanting Division - revenue of GBP68.88m
(2020: GBP62.83m), operating profit before non-recurring items
up 13% to GBP3.40m (2020: GBP3.02m)
- strong demand for bagged feed
- recovery in hardware sales as farmers returned to investing
in their businesses
-- Commercial Sales & Marketing Director to join in July - completing
the reorganisation of the senior management structure, and
ESG Manager appointed
-- Two strategic bolt-on acquisitions completed - extending footprint
in the eastern side of England
-- Board appointments - Steve Ellwood became Chairman from March
2021 and Catherine Bradshaw is to join as a non-executive director
on 1 July
Outlook
-- Strong trading conditions support a good outturn in H2, with
farmgate prices firm and 2021 harvest on track to revert to
more normal yield and tonnage
-- The Board remains very confident about the Group's longer term
prospects, supported by strong financial position and growth
initiatives in place
* Underlying pre-tax profit is a non-GAAP (generally accepted
accounting principles) measure and is not intended as a substitute
for GAAP measures and may not be calculated in the same way as
those used by other companies. Refer to Note 14 for an explanation
on how this measure has been calculated and the reasons for its
use.
Gareth Davies, Chief Executive of Wynnstay Group plc,
commented:
"These record interim results reflect strong recovery in farmer
confidence, driven by higher farmgate prices, and clarity provided
by the EU settlement and the landmark Agriculture Act. They also
demonstrate the benefits of the Group's broad spread of activities,
supplying both livestock and arable farmers.
"We made good strategic progress, extending our reach in the
eastern side of England with two bolt-on acquisitions, completing a
major hire for our reorganised senior management team, and creating
a dedicated role in support of the Group's ESG strategy.
"Prospects for the second half of the financial year are very
encouraging, with farmgate prices firm and a good harvest expected.
We will continue to invest in the business to increase the Group's
manufacturing capacity and improve production efficiencies, and
will look for further complementary acquisitions. With our strong
balance sheet and good cash flows, we view the future with
confidence."
Enquiries:
Wynnstay Group Plc Gareth Davies, Chief T: 020 3178 6378 (today)
Executive T: 01691 827 142
Paul Roberts, Finance
Director
KTZ Communications Katie Tzouliadis / Dan T: 020 3178 6378
Mahoney
Shore Capital (Nomad Stephane Auton / Patrick T: 020 7408 4090
and Broker) Castle / John More
CHAIRMAN'S STATEMENT
INTRODUCTION
This is my first interim result statement since becoming
Chairman in March 2021, and I am delighted to report record interim
pre-tax profit. The Group generated underlying pre-tax profit of
GBP5.53m[1] (2020: GBP4.51m), a 23% increase year-on-year, on
revenues of GBP249.71m (2020: GBP229.29m), up 9%. Reported pre-tax
profit increased 25% to GBP5.36m (2020: GBP4.30m).
Three factors helped to deliver this excellent result, improved
farmgate prices, the EU settlement, and the UK Agricultural Bill,
all of which have played a major part in removing uncertainty and
improving farmer sentiment.
These results also demonstrate the resilient nature of our
balanced business model and the benefits of recent growth and
efficiency initiatives. The breadth of the Group's activities,
supplying products into both livestock and arable farming
enterprises, and the natural hedging this establishes provides
significant advantages. In addition, over the last 12 months years,
we have been focusing on increasing our exposure to those
activities where demand is typically more consistent
year-on-year.
The health, safety and welfare of our colleagues, customers and
communities remained priorities in the face of the ongoing
coronavirus crisis. It is greatly encouraging that, in recent
months, there has been some easing of government-imposed
restrictions and I am extremely grateful to every member of our
team for their efforts to ensure the continuity of our business. It
has meant that our farmer customers have continued to be fully
serviced throughout this still difficult period.
We made two strategic bolt-on acquisitions in the period in line
with our growth strategy. They have expanded our footprint in the
eastern side of the UK, and were of the agricultural division of
the Armstrong Richardson Group, which supplies inputs to farmers in
the North East of England, and the fertiliser manufacturing
business and assets of HELM Great Britain Limited, which serves
South Yorkshire and the surrounding area. Both bring new customers
to the Group and staff with significant experience and local
knowledge. I am pleased to welcome the teams, and to report that
both acquisitions are integrating well.
In March 2021, we appointed Paul Jackson as Commercial Sales and
Marketing Director, which marked the completion of the new
management structure put in place at the end of the last financial
year. Paul will take up his position on 5 July 2021, and this new
structure allows for enhanced Group effectiveness, and supports our
future growth and investment plans for the business.
As we emerge from a period of a significant level of general
economic uncertainty, we are confident that Wynnstay is well
positioned in a sector that is emerging from a prolonged period of
inertia created by Brexit uncertainties. We expect to make good
progress with our investment plans and growth initiatives in the
second half of the financial year.
FINANCIAL RESULTS
Revenue for the six months to 30 April 2021 increased by 8.9% on
the same period last year to GBP249.71m (2020: GBP229.29m). We
estimate that commodity price inflation accounted for nearly 65%
(c. GBP13.3m) of the overall increase, with the combined
contribution from the two acquisitions completed in February and
March contributing GBP5.5m. The contribution to Group revenue from
the Agriculture Division increased by 8.6% to GBP180.72m (2020:
GBP166.41m) and from the Specialist Agricultural Merchanting
Division by 9.6% to GBP68.88m (2020: GBP62.83m). Other activity
contributed revenue of GBP0.11m (2020: GBP0.05m).
Adjusted operating profit rose by 19% to GBP5.68m (2020:
GBP4.78m before non-recurring costs, share-based payments and
intangible amortisation). The Agricultural Division contributed
operating profit of GBP2.20m (2020: GBP1.81m), up by 22% on last
year, with this result reflecting improved manufactured feed
volumes and incomes but lower contributions from the arable product
categories following the exceptionally poor harvest last year. The
Specialist Agricultural Merchanting division contributed operating
profit of GBP3.40m (2020: GBP3.02m), up by 13%, reflecting a
continuation of the improving trading conditions evident from the
end of the previous financial year. Other activities incurred an
operating loss of GBP0.12m (2020: loss of GBP0.09m). In line with
prior years, the contribution from our Joint Ventures will be
consolidated in the second half of our full year results.
There have been no non-recurring costs charged in the period
(2019: GBP0.18m) [2] , and net finance costs including IFRS 16
charges were GBP0.11m (2020: GBP0.26m), with this reflecting the
improved average cash position. Share-based payment expenses for
the period increased to GBP0.16m (2020: 0.03m), as a result of the
launch of a successful all employee Save As You Earn option scheme
in the second half of last year.
Reported profit before tax was higher at GBP5.36m (2020:
GBP4.30m). While the effective tax rate for the period at 19.1%
(2020:19.0%) was slightly higher, resulting in a charge of GBP1.03m
(2020: GBP0.82m), it is lower than the 2020 full year effective tax
rate of 20.7% as a result of the Government's 130% Super-deduction
capital allowance on qualifying investment. Profit after tax
increased by 25% to GBP4.34m (2020: GBP3.48m) and basic earnings
per share increased by 24% to 21.62p (2020: 17.50p).
Net assets now exceed GBP100m, and at 30 April 2021 stood 4%
higher year-on-year at GBP101.05m (2020: GBP96.84m). This equates
to GBP5.04 per share (2020: GBP4.87 per share), based on the
weighted average number of shares in issue during the period at
20.06m (2019: 19.90m).
Net cash on a pre IFRS 16 basis (excluding leases) increased
significantly to GBP4.01m (2020: GBP1.28m), despite the commodity
inflation experienced and the Group's cash requirements peaking
during the spring months, particularly in April. Total lease
liabilities amounted to GBP8.86m (2020: GBP10.24m). Strong cash
generation from trading and tight working capital control remain
priorities, and continue to provide a secure underpinning to the
Group's growth plans.
DIVID
The Board is pleased to declare an increased interim dividend of
5.00p per share (2020: 4.60p), up by 8.7% on the equivalent payment
last year. The increased payment reflects the Directors continuing
confidence in prospects for the business and the strong
results.
The interim dividend will be paid on 29 October 2021 to
shareholders on the register at the close of business on 1 October
2021. As in previous years, the Scrip Dividend alternative will
continue to be available, with the last day for election for this
scheme being 15 October 2021.
REVIEW OF OPERATIONS
AGRICULTURE DIVISION
The improving sector sentiment experienced towards the end of
the last financial year continued into the new year. It was
supported by continuing strong farmgate prices for most commodities
and the removal of some of the political uncertainty with the
completion of the Brexit negotiations and clarity evolving over the
details of the future support provisions contained in the new
Agriculture Act.
Feed Products
Manufactured feed volumes recovered strongly, up by 8.5% over
the equivalent period last year, helped by the improvement in
background trading conditions and a more normalised winter weather
pattern. We continued to make progress in the free-range egg feed
market and have further increased customer numbers and tonnage
sold.
Rising commodity prices remain a challenge and careful raw
materials management is required across our manufacturing and
trading operations where margins are likely to come under pressure
as prices continue to rise. Efficiencies in production are
therefore essential. Our substantial three year investment
programme currently under way at our Carmarthen mill will generate
significant benefits, materially increasing our manufacturing
capacity and improving manufacturing throughput.
Arable Products
The weaker performance from our arable operations was expected,
with the anticipated consequences of the poor harvest of 2020 and
the carry-over of autumn seed from 2019, coming through in the
period.
Grainlink, our grain marketing business, experienced a
like-for-like 26% reduction in volumes available to trade. This was
in line with the latest estimates of the overall reduction in UK
wheat and barley production in 2020. However, margins improved and
the positive contribution from the acquisition of the agricultural
division of the Armstrong Richardson Group in February minimised
the financial impact of the contraction in volumes.
Autumn seed plantings by farmers were significantly higher than
the previous year, when many were unable to sow winter cereal seed
due to the prolonged heavy rain. This bodes well for the
forthcoming harvest where a return to more normal volumes is
expected. Reflecting the good autumn planting season, spring cereal
seed sales were lower.
Grass seed sales have been delayed following the dry April
period and then excessive rain in May, but our strong market
presence in this sector will enable us to capitalise once demand
picks up in the later summer period. Demand for fertiliser was more
subdued, reflecting a combination of higher prices and the adverse
spring conditions restricting grass growth.
Glasson Grain
Glasson Grain operates in three main areas, feed raw materials,
fertiliser production and the manufacture of specialist animal feed
products. The business performed strongly overall. Both the feed
raw material and fertiliser activities delivered increased volumes.
Specialist animal feed volumes experienced a reduction in tonnage
as certain categories such as game bird and equine continued to be
impacted by coronavirus- related restrictions. The fertiliser
business was enlarged with the purchase in March 2021 of the HELM
Great Britain Limited processing plant in South Yorkshire. The
acquisition has exceeded its forecast contribution in the first two
months of operation and has added new customers to the Group, which
should benefit other areas of the Group.
SPECIALIST AGRICULTURAL MERCHANTING DIVISION
Specialist Agricultural Merchanting and Youngs Animal Feeds
The Group's chain of 54 depots cater for the needs of farmers
and other rural dwellers and operates very closely with our
Agricultural Division, providing a strong channel to market for our
products.
Total sales increased 10% in the period although sales in the
prior year were affected by the initial introduction of
coronavirus-related trading protocols. Strong demand for our
manufactured bagged feed in the depots was one of the main drivers
of increased revenue and contribution in the period, together with
hardware sales as farmers returned to investing in their businesses
as confidence improved.
During the period, we initiated a major customer research
project, which reviewed depot customer trading preferences and
current habits. This was a major exercise and we were encouraged by
the results, which underlined the valuable role Wynnstay plays
within our rural communities. We will be using the results of our
research to refine the decisions we make, including future
investment in our channels to market and the ongoing roll-out of
our digital trading portal.
Our specialist equine feeds business increased its operating
contribution to Group results following the consolidation of its
activities into three locations at the end of the last financial
year. The re-launch of the Company's manufactured own fibre feed
range under the 'Sweet Meadow' brand has also boosted volumes and
contributed to the improved performance.
JOINT VENTURES AND ASSOCIATES
Results from the Group's joint ventures and associate companies
are not included in this half year report, and in accordance with
established accounting policies will be consolidated into
Wynnstay's full year results.
Environmental, Social and Governance ("ESG")
In February 2021, we created a new management position with
specific responsibility for leading the ongoing development and
implementation of the Group's ESG strategy. We were pleased to
appoint Lewis Davies to the position, and he is working with the
senior management team to ensure our policies and objectives are
effectively embedded across all areas of the Group's operations. He
is also working with the Company's peers to promote increased
sustainability throughout UK agriculture, including as a member of
the sustainability committee of the agrisupply industry's leading
trade association, the Agricultural Industries Confederation
(AIC).
A key pillar in the Group's growth strategy is supporting
customers with the advice, products, and services that are
necessary to adapt to the new environmental and efficiency
priorities set in the UK Agriculture Act. Our own focus on
sustainability will strengthen our ability to support customers'
environmental aims.
The Wynnstay Board is committed to the highest standards of
appropriate corporate and commercial governance to support the
delivery of long term shareholder value and produce positive
outcomes for other stakeholder groups including colleagues,
customers and suppliers.
BOARD CHANGES
Jim McCarthy stepped down as Chairman in March 2021 ahead of his
forthcoming retirement from the Board in July. On behalf of
everyone at Wynnstay, I would like to thank him for his tremendous
service to the Group over 10 years, the last eight as Chairman. His
insights and counsel have contributed significantly to Wynnstay's
development, and we wish him well for the future.
In June 2021, we were very pleased to announce the appointment
of Catherine Bradshaw as an independent Non-executive Director,
which takes effect on 1 July 2021. A qualified chartered
accountant, Catherine has over 20 years' experience in financial
and general management roles, primarily in the food industry. She
is Group Financial Controller of Greencore Group plc, a leading
manufacturer of convenience food in the UK, having joined the FTSE
250 listed business in 2015. Prior to this, she worked in senior
financial positions at Wm Morrison Supermarkets plc, the
supermarket group, and Northern Foods plc, the food manufacturer.
On appointment, Catherine will also assume the role of Chairman of
the Audit and Risk Committee. We welcome Catherine to the Board and
look forward to working with her.
OUTLOOK
Sentiment in the UK agricultural sector has greatly improved and
trading conditions are very encouraging. Farmgate prices remain
strong, immediate Brexit concerns appear behind us, although the
potential for some trade disruptions still exist, and the
coronavirus crisis has been considerably ameliorated with the onset
of vaccination programmes. The Environmental Land Management
Schemes ("ELMS"), published in March by the UK Government, has
provided a framework for our farmer customers to properly plan for
their businesses well into the medium term. We therefore anticipate
sustainable incomes for most farmers in the near term, and that
on-farm investment will be boosted.
Looking at growth prospects for the Group, we are confident that
the business is well-positioned to make progress in this
market-place. Our results for the period have once again
demonstrated the advantages of our balanced business model, which
provides a hedge that helps to smooth sector variations. Our strong
balance sheet and cash flows also provide a robust platform to
support our growth plans, and we will be continuing with our
investment programmes to increase manufacturing capacity and
improve efficiencies. We will also actively review appropriate
acquisition opportunities in line with our growth strategy.
With the UK harvest on track to return to more normal yields and
tonnage and trading conditions strong, we view prospects for the
second half of the financial year very positively.
Steve Ellwood
Chairman
[1] Note 6. Explanation of Non GAAP measure.
(2) Note 7
WYNNSTAY GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 April 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 30 April 31 October
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 249,709 229,288 431,398
Cost of sales (216,413) (197,781) (370,630)
------------ ------------ ------------
Gross profit 33,296 31,507 60,768
Manufacturing, distribution
and selling costs (24,202) (23,333) (46,033)
Administrative expenses (3,604) (3,561) (6,945)
Other operating income 5 185 168 351
------------------------------------- ----- ------------ ------------ ------------
Adjusted operating profit3 6 5,675 4,781 8,141
Amortisation of acquired intangible
assets and share -based payment
expense 7 (197) (44) (132)
Non-recurring items 7 - (185) (1,194)
------------------------------------- ----- ------------ ------------ ------------
Group operating profit 5,478 4,552 6,815
Interest income 51 55 164
Interest expense (165) (310) (436)
Share of profits in joint ventures
and associate accounted for
using the equity method 2 - - 538
Share of tax incurred in by
joint venture and associate - - (100)
Profit before taxation 5,364 4,297 6,981
Taxation 8 (1,027) (817) (1,448)
Profit for the period and other
comprehensive income attributable
to the equity holders 4,337 3,480 5,533
============ ============ ============
Basic earnings per ordinary
share (pence) 21.62 17.50 27.73
Diluted earnings per ordinary
share (pence) 21.30 17.43 27.57
3 Adjusted operating profit is after adding back amortisation of
acquired intangible assets, share-based payment expense and
non-recurring items.
CONDENSED CONSOLIDATED BALANCE SHEET
For the six months ended 30 April 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 30 April 31 October
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
------------------------------------ ----- ------------ -------------------- -------------------------
ASSETS
NON-CURRENT ASSETS
Goodwill 14,417 14,968 14,367
Investment property 2,372 2,372 2,372
Property, plant and equipment 17,654 17,964 17,545
Right-of-use asset 10 10,153 11,264 11,240
Investments accounted for
using the equity method 3,613 3,175 3,611
Intangibles 327 243 225
------------------------------------ ----- ------------ -------------------- -------------------------
48,536 49,986 49,360
------------------------------------ ----- ------------ -------------------- -------------------------
CURRENT ASSETS
Inventories 44,221 42,002 34,190
Trade and other receivables 75,407 75,501 55,850
Financial assets - loans
to joint ventures 3,865 4,929 3,889
Cash and cash equivalents 11 4,991 3,452 19,980
128,484 125,884 113,909
------------------------------------ ----- ------------ -------------------- -------------------------
TOTAL ASSETS 177,020 175,870 163,269
LIABILITIES
CURRENT LIABILITIES
Financial liabilities - borrowings (979) (1,860) (1,572)
Lease Liabilities (3,173) (3,539) (3,483)
Trade and other payables (64,551) (65,202) (52,326)
Current tax liabilities (1,019) (991) (784)
(69,722) (71,592) (58,165)
------------------------------------ ----- ------------ -------------------- -------------------------
NET CURRENT ASSETS 58,762 54,292 55,744
------------------------------------ ----- ------------ -------------------- -------------------------
NON-CURRENT LIABILITIES
Financial liabilities - borrowings - (313) (313) -
Lease liabilities (5,687) (6,701) (6,509)
Trade and other payables (87) (199) (141)
Deferred tax liabilities (474) (228) (276)
(6,248) (7,441) (6,926)
------------------------------------ ----- ------------ -------------------- -------------------------
TOTAL LIABILITIES (75,970) (79,033) (65,091)
------------------------------------ ----- ------------ -------------------- -------------------------
NET ASSETS 101,050 96,837 98,178
------------------------------------ ----- ------------ -------------------- -------------------------
EQUITY
Share capital 14 5,034 5,002 5,013
Share premium 30,998 30,509 30,637
Other reserves 3,686 3,455 3,525
Retained earnings 61,332 57,871 59,003
TOTAL EQUITY 101,050 96,837 98,178
------------------------------------ ----- ------------ -------------------- -------------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
For the six months ended 30 April 2021
Share Share Other Retained Total
Capital Premium Reserves Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 November 2019 4,974 30,284 3,429 56,261 94,948
Profit for the period - - - 3,480 3,480
------------------------------ --------- --------- --------------- ----------- ----------
Total comprehensive income
for the period - - - 3,480 3,480
------------------------------ --------- --------- --------------- ----------- ----------
Transactions with owners
of the Company, recognised
directly in equity
Shares issued during the
period 28 225 - - 253
Dividends - - - (1,870) (1,870)
Equity settled share-based
payment transactions - - 26 - 26
------------------------------ --------- --------- --------------- ----------- ----------
Total contributions by and
distributions to owners
of the Group 28 225 26 (1,870) (1,591)
------------------------------ --------- --------- --------------- ----------- ----------
At 30 April 2020 5,002 30,509 3,455 57,871 96,837
------------------------------ --------- --------- --------------- ----------- ----------
Profit for the period - - - 2,053 2,053
------------------------------ --------- --------- --------------- ----------- ----------
Total comprehensive income
for the period - - - 2,053 2,053
------------------------------ --------- --------- --------------- ----------- ----------
Transactions with owners
of the Company, recognised
directly in equity
Shares issued during the
period 11 128 - - 139
Dividends - - - (921) (921)
Equity settled share-based
payment transactions - - 70 - 70
------------------------------ --------- --------- --------------- ----------- ----------
Total contributions by and
distributions to owners
of the Group 11 128 70 (921) (712)
------------------------------ --------- --------- --------------- ----------- ----------
At 31 October 2020 5,013 30,637 3,525 59,003 98,178
------------------------------ --------- --------- --------------- ----------- ----------
Profit for the period - - - 4,337 4,337
------------------------------ --------- --------- --------------- ----------- ----------
Total comprehensive income
for the period - - - 4,337 4,337
------------------------------ --------- --------- --------------- ----------- ----------
Transactions with owners
of the Company, recognised
directly in equity
Shares issued during the
period 21 361 - - 382
Dividends - - - (2,008) (2,008)
Equity settled share-based
payment transactions - - 161 - 161
------------------------------ --------- --------- --------------- ----------- ----------
Total contributions by and
distributions to owners
of the Group 21 361 161 (2,008) (1,465)
------------------------------ --------- --------- --------------- ----------- ----------
At 30 April 2021 5,034 30,998 3,686 61,332 101,050
------------------------------ --------- --------- --------------- ----------- ----------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 April 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 30 April 31 October
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
-------------------------------- ----- ------------ --------------------- ------------
Cash flow from operating
activities
Cash (used in)/generated
from operations 9 (7,327) (1,062) 20,372
Interest received 51 55 164
Interest paid (165) (310) (436)
Tax paid (594) (720) (1,510)
Net cash (used in)/generated
from operating activities (8,035) (2,037) 18,590
-------------------------------- ----- ------------ --------------------- ------------
Cash flows from investing
activities
Acquisition of subsidiaries
(net of cash acquired) (1,844) (68) (125)
Proceeds on sale of property,
plant and equipment 95 6 194
Purchase of property, plant
and equipment (1,009) (505) (1,058)
Dividends received from
Associates - - 2
Net cash used by investing
activities (2,758) (567) (987)
-------------------------------- ----- ------------ --------------------- ------------
Cash flows from financing
activities
Net proceeds from the issue
of ordinary share capital 382 253 392
Lease payments (1,977) (2,066) (4,362)
Repayments of loans (593) (869) (1,470)
Dividends paid to shareholders (2,008) (1,870) (2,791)
-------------------------------- ----- ------------ --------------------- ------------
Net cash used in financing
activities (4,196) (4,552) (8,231)
-------------------------------- ----- ------------ --------------------- ------------
Net decrease in cash and
cash equivalents (14,989) (7,156) 9,372
-------------------------------- ----- ------------ --------------------- ------------
Cash and cash equivalents
at beginning of period 19,980 10,608 10,608
-------------------------------- ----- ------------ --------------------- ------------
Cash and cash equivalents
at end of period 11 4,991 3,452 19,980
-------------------------------- ----- ------------ --------------------- ------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
GENERAL INFORMATION
Wynnstay Group Plc has a number of operations. These are
described in the segment analysis in note 4.
Wynnstay Group Plc is a company incorporated and domiciled in
the United Kingdom. The address of its registered office is shown
in note 3.
1. BASIS OF PREPARATION
The Interim Report was approved by the Board of Directors on 29
June 2021.
The condensed financial statements for the six months to the 30
April 2021 have been prepared in accordance with International
Accounting Standard (IAS) 34 Interim Financial Reporting except as
disclosed in note 2.
The financial information for the Group for the year ended 31
October 2020 set out above is an extract from the published
financial statements for that year which have been delivered to the
Registrar of Companies. The auditor's report on those financial
statements was not qualified and did not contain statements under
section 498(2) or 498(3) of the Companies Act 2006. The information
contained in this document does not constitute statutory accounts
within the meaning of section 434 of the Companies Act 2006.
The financial information for the six months ended 30 April 2021
and for the six months ended 30 April 2020 are unaudited.
The consolidated financial statements are presented in sterling,
which is also the Group's functional currency. Amounts are rounded
to the nearest thousand, unless otherwise stated.
The condensed consolidated interim financial statements should
be read in conjunction with the annual consolidated financial
statements for the year ended 31 October 2020, which have been
prepared in accordance with IFRS as adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
The Directors have prepared the condensed consolidated interim
financial statements on a going concern basis, having satisfied
themselves from a review of internal budgets and forecasts and
current banking facilities that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
impact of the coronavirus crisis is discussed under 'Critical
accounting estimates and judgements.
2. CONSOLIDATION OF SHARE OF RESULTS IN JOINT VENTURES
The Group has a policy of using audited accounts for the
consolidation of its share of the results of Joint Venture and
Associate activities. No such consolidation has occurred during the
six months to 30 April 2021. Although this is not in accordance
with IFRS the impact on the financial statements is not material.
Relevant results will be accounted for during the second half of
the financial year.
3. SIGNIFICANT ACCOUNTING POLICIES
The condensed financial statements have been prepared under the
historical cost convention other than shared-based payments, which
are included at fair value and certain financial instruments which
are explained in the annual consolidated financial statements for
the year ended 31 October 2020.
The condensed consolidated interim financial statements for the
six months to 30 April 2021 have been prepared on the basis of the
accounting policies expected to be adopted for the year ending 31
October 2021 except for those highlighted in Note 2. These are
anticipated to be consistent with those set out in the Group's
latest annual financial statements for the year ended 31 October
2020. A copy of these financial statements is available from the
Company's Registered Office at Eagle House, Llansantffraid, Powys,
SY22 6AQ.
New standards and interpretations
Other new and amended standards and Interpretations issued by
the IASB that will apply for the rst time in the next annual
nancial statements are not expected to impact the Group as they are
either not relevant to the Group's activities or require accounting
which is consistent with the Group's current accounting
policies.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historic experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may di er from
these estimates and assumptions. The estimates and assumptions that
have a signi cant risk of causing a material adjustment to the
carrying amount of assets and liabilities with the next nancial
year are unchanged from those disclosed in the nancial statements
for the year ended 31 October 2020 except in relation to the
outbreak of the coronavirus crisis.
As reported in the financial statements for the year ended 31
Oct 2020, the Group has traded resiliently through the Coronavirus
pandemic operating under modified procedures to ensure the welfare
and safety of colleagues, customers and the communities the
business operates in. No significant impact on the financial
statements of the Group have occurred as a result of the ongoing
situation.
Consideration has been given to the assets and liabilities as at
30 April 2021 and an evaluation has been made that there are no
coronavirus connected impairments to record at the time of
authorising these nancial statements. The situation continues to
evolve and as more information becomes available it is possible
that in the future actual experience may di er and hence these
matters are key judgement for these nancial statements.
4. SEGMENTAL REPORTING
IFRS 8 requires operating segments to be identified on the basis
of internal financial information about the components of the Group
that are regularly reviewed by the chief operating decision-maker
("CODM") to allocate resources to the segments and to assess their
performance.
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 Agriculture, Specialist Agricultural
Merchanting, and Other.
The Board considers the business from a product/service
perspective. In the Board's opinion, all of the Group's operations
are carried out in the same geographical segment, namely the United
Kingdom.
Agriculture - manufacturing and supply of animal feeds,
fertiliser, seeds and associated agricultural products.
Specialist Agricultural Merchanting - supplies a wide range of
specialist products to farmers, smallholders, and pet owners.
Other - miscellaneous operations not classi ed as Agriculture or
Specialist Agricultural Merchanting.
The Board assesses the performance of the operating segments
based on a measure of operating pro t. Non-recurring costs and
nance income and costs are not included in the segment result that
is assessed by the Board. Other information provided to the Board
is measured in a manner consistent with that in the nancial
statements. No segment is individually reliant on any one
customer.
The segment results for the period ended 30 April 2021 and
comparative periods are as follows:
Agriculture Specialist Other Total
Agricultural
Merchanting
Unaudited for the six months GBP'000 GBP'000 GBP'000 GBP'000
ended
30 April 2021:
------------------------------------ ------------ -------------- -------- ------------
Revenue from external customers 180,716 68,884 109 249,709
Segment results
Group operating profit before
non-recurring items 2,197 3,398 (117) 5,478
Share of result of Joint
Ventures - - - -
2,197 3,398 (117) 5,478
Non-recurring items (note
7) -
Interest income 51
Interest expense (165)
------------
Profit before taxation 5,364
Taxation (1,027)
------------
Profit for the period attributable
to shareholders 4,337
------------
Agriculture Specialist Other Total
Agricultural
Merchanting
Unaudited for the six months GBP'000 GBP'000 GBP'000 GBP'000
ended 30 April 2020 for
continuing operations:
------------------------------------ ------------ -------------- -------- ------------
Revenue from external customers 166,409 62,834 45 229,288
Segment results
Group operating profit before
non-recurring items 1,811 3,017 (91) 4,737
Share of result of Joint
Ventures - - - -
------------------------------------ ------------ -------------- -------- ------------
1,811 3,017 (91) 4,737
Non-recurring items (note
7) (185)
Interest income 55
Interest expense (310)
------------
Profit before taxation 4,297
Taxation (817)
------------
Profit for the period attributable
to shareholders 3,480
------------
Agriculture Specialist Other Total
Agricultural
Merchanting
Audited for the year ended GBP'000 GBP'000 GBP'000 GBP'000
31 October 2020 for continuing
operations:
------------------------------------ ------------ -------------- -------- ------------
Revenue from external customers 302,580 128,807 11 431,398
Segment results
Group operating profit before
non-recurring items 2,411 5,728 (130) 8,009
Share of result of Joint
Ventures 471 53 14 538
------------------------------------ ------------ -------------- -------- ------------
2,882 5,781 (116) 8,547
Non-recurring items (note
7) (1,194)
Interest income 164
Interest expense (436)
------------
Profit before taxation 7,081
Taxation (1,548)
------------
Profit for the year attributable
to shareholders 5,533
------------
5. OTHER OPERATING INCOME
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 2021 30 April 31 October
2020 2020
GBP'000 GBP'000 GBP'000
--------------- --------------- ------------ ------------
Rental Income 185 168 351
6. ALTERNATIVE PERFORMANCE MEASURES
On the Board's preferred alternative performance measures
referred to as Adjusted operating profit and Underlying pre-tax
profits which are respectively, Group operating profit adding back
amortisation of acquired intangible assets, share-based payment
expense and non-recurring items, and the Group profit before tax
adding back share-based payment expense, non-recurring items and
including the value of the share of tax incurred by joint ventures
and associates. On these measures the Group achieved Adjusted
operating profit of GBP5.68m (2020: GBP4.78m) and Underlying
pre-tax profits of GBP5.53m (2020: GBP4.51m).
Reconciliation with the reported income statement for this
measure, Operating profit before non-recurring items and Underlying
pre-tax profit and the Profit before tax shown on the Condensed
Statement of Comprehensive Income, together with reasons for their
use is given below.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 30 April 31 October
2021 2020 2020
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------ ------------ ------------
Profit before tax 5,364 4,297 6,981
Share of tax incurred by joint ventures
and associate - - 100
Non-recurring items (note 7) - 185 1,194
Net finance costs 114 255 272
Share of results from joint ventures
before tax - - (538)
----------------------------------------- ------------ ------------ ------------
Operating profit before non-recurring
items (note 8) 5,478 4,737 8,009
Share of results from joint ventures
and associate before tax - - 538
----------------------------------------- ------------ ------------ ------------
Segment results plus share of results
from joint ventures and associate
before tax (note 4) 5,478 4,737 8,547
Share-based payments 161 26 96
Net finance charges (114) (255) (272)
----------------------------------------- ------------ ------------ ------------
Underlying pre-tax profit 5,525 4,508 8,371
----------------------------------------- ------------ ------------ ------------
Profit before tax 5,364 4,297 6,981
Share of results from joint ventures - - (538)
Share of tax incurred by joint ventures - - 100
Net finance charges 114 255 272
Share-based payments 161 26 96
Amortisation of intangibles 36 18 36
Non-recurring items (note 7) - 185 1,194
----------------------------------------- ------------ ------------ ------------
Adjusted operating profit 5,675 4,781 8,141
----------------------------------------- ------------ ------------ ------------
The Board uses alternative performance measures as it believes
the underlying commercial performance of the current trading
activities is better reflected, and provides investors and other
users of the accounts with an improved view of likely future
performance by making adjustments to the IFRS results for the
following reasons:
-- Share of results from joint ventures and associate
Provides a fuller understanding of activities directly under
management control and those incorporated from joint ventures.
-- The add back of tax incurred by joint ventures and
associate
The Board believes the incorporation of the gross result of
these entities provides a fuller understanding of their combined
contribution to the Group performance.
-- Net finance charges
Provides an understanding of results before interest received
and paid.
-- Share-based payments
This charge is calculated using a standard valuation model, with
the assessed non-cash cost each year varying depending on new
scheme invitations and the number of leavers from live schemes.
These variables can create a volatile non-cash charge to the income
statement, which is not directly connected to the trading
performance of the business.
-- Amortisation of acquired intangible assets
This charge relates to intangible assets created from prior
business combinations, hence provides a fuller understanding of
current operating performance.
-- Non-recurring items
The Group's accounting policies include the separate
identification of non-recurring material items on the face of the
income statement, which the Board believes could cause a
misinterpretation of trading performance if not disclosed.
7. AMORTISATION OF ACQUIRED INTANGIBLE ASSETS AND SHARE-BASED PAYMENTS AND NON-RECURRING ITEMS
Unaudited Unaudited Audited
six months six months Year
ended ended ended
30 April 2021 30 April 31 October
2020 2020
GBP'000 GBP'000 GBP'000
----------------------------- ----------------------------------- ------------ ------------
Amortisation of acquired
intangible assets and
share-based payments
Amortisation of intangibles 36 18 36
Cost of share-based
reward 161 26 96
----------------------------- ----------------------------------- ------------ ------------
197 44 132
----------------------------- ----------------------------------- ------------ ------------
Non-recurring items
Business re-organisation
costs - 185 185
Goodwill and Investment
impairment - - 601
Huyton depot closure
costs - - 256
Decommission of Selby
seed plant - - 152
- 185 1,194
----------------------------- ----------------------------------- ------------ ------------
Business re-organisation costs relate to the redundancy related
expenses of colleagues leaving the business as a result of
re-organising operations. The goodwill impairment relates to the
Grainlink cash generating unit, for
additional information see note 13 in the financial statements 31 October 2020.
Huyton depot store closure costs comprise redundancy costs and
costs associated with exiting the leased premises. Decommission of
Selby seed plant relates to the costs of vacating a leased property
and transferring the plant and machinery to a new location.
8. TAXATION
The tax charge for the six months ended 30 April 2021 and 30
April 2020 is based on an apportionment of the estimated tax charge
for the full year.
The effective tax rate is 19.1% (6 months ended 30 April 2020:
19.0%) which is higher than the standard rate of 19.0% (2020:
19.0%).
9. CASH (USED IN)/GENERATED FROM OPERATIONS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 2021 30 April 31 October
2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------- --------------- ------------ ------------------------
Profit for the period 4,337 3,480 5,533
Adjustments for:
Taxation 1,027 817 1,448
Investment and goodwill
impairment - - 601
Depreciation of tangible
fixed assets 1,042 1,138 2,290
Amortisation of other intangible
fixed assets 36 18 36
Amortisation of right-use-assets 1,932 1,856 3,888
(Profit) on disposal of
property, plant and equipment (77) (6) (142)
Loss on disposal of right-of-use
asset - - 25
Investment revaluation (2) - -
Interest income (51) (55) (164)
Interest expense 165 310 436
Share of results of joint
ventures and associate - - (438)
Share-based payment expense 161 26 96
Changes in working capital
(excluding effects of acquisitions
and disposals of subsidiaries)
Increase/(decrease) in short
term loan to joint venture 24 (516) 524
(Increase)/decrease in inventories (8,254) 237 8,049
(Increase)/decrease in trade
and other receivables (19,557) (11,596) 8,055
Increase/(decrease) in trade
and other payables 11,890 3,229 (9,865)
Cash (used in)/generated
from operations (7,327) (1,062) 20,372
------------------------------------- --------------- ------------ ------------------------
During the six months to 30 April 2021, the Group purchased
property, plant and equipment of GBP1,854,000 (2020: GBP1,839,000)
of which GBP845,000 relates to right-of-use assets (2020:
GBP1,334,000).
10. LEASES
The following tables shows the movement in right-of-use assets
and lease liabilities, along with the aging of the lease
liabilities.
Right-of-use assets Land and Property, plant Total
buildings and equipment
GBP'000 GBP'000 GBP'000
--------------------- ----------- ---------------- --------
At 1 November 2019 7,684 4,638 12,322
Additions 241 1,093 1,334
Amortisation (1,578) (814) (2,392)
At 30 April 2020 6,347 4,917 11,264
--------------------- ----------- ---------------- --------
Additions 729 768 1,497
Amortisation (785) (711) (1,496)
Disposal (25) - (25)
--------------------- ----------- ---------------- --------
At 31 October 2020 6,266 4,974 11,240
--------------------- ----------- ---------------- --------
Additions 400 445 845
Amortisation (1,120) (812) (1,932)
At 30 April 2021 5,546 4,607 10,153
--------------------- ----------- ---------------- --------
Lease liabilities Land and Property, plant Total
buildings and equipment
GBP'000 GBP'000 GBP'000
-------------------- ----------- ---------------- --------
At 1 November 2019 7,684 3,839 11,523
Additions 241 1,093 1,334
Interest expense 171 71 242
Lease payments (1,489) (1,370) (2,859)
At 30 April 2020 6,607 3,633 10,240
-------------------- ----------- ---------------- --------
Additions 729 768 1,497
Interest expense (19) 72 53
Lease payments (1,001) (772) (1,773)
Disposal (25) - (25)
-------------------- ----------- ---------------- --------
At 31 October 2020 6,291 3,701 9,992
-------------------- ----------- ---------------- --------
Additions 424 238 662
Interest expense 71 67 138
Lease payments (1,184) (748) (1,932)
At 30 April 2021 5,602 3,258 8,860
-------------------- ----------- ---------------- --------
Within 1 year 1-2 years 2-5 years Over 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------------- ---------- ---------- ------------- --------
Lease liabilities 3,173 2,631 3,056 - 8,860
11. NET CASH
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 30 April 31 October
2021 2020 2020
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ ------------
Cash and cash equivalents per
balance sheet 4,991 3,452 19,980
Cash and cash equivalents per
cash flow statement 4,991 3,452 19,980
Bank loans due within one year
or on demand (306) (1,176) (897)
Loan capital (673) (684) (675)
Net cash due within one year 4,012 1,592 18,408
Bank loans due after one year - (313) -
Total net cash 4,012 1,279 18,408
-------------------------------- ------------ ------------ ------------
12. FINANCIAL INSTRUMENTS
The Group is exposed through its operation to the following
financial risks:
-- Credit risk
-- Interest rate risk
-- Foreign exchange risk
-- Other market price risk
-- Liquidity risk
The principal financial instruments used the Group, from which
financial instrument risk arises, are as follows:
-- Trade receivables
-- Cash and cash equivalents
-- Investments in quoted equity securities
-- Trade and other payables
-- Bank overdrafts
-- Floating-rate bank loans
-- Forward currency contracts
-- Lease liabilities
All financial instruments in 2021 and 2020 were denominated in
Sterling. There is no significant foreign exchange risk in respect
of these instruments. Further quantitative information in respect
of these risks is presents in the Group's annual financial
statements 31 October 2020.
Financial instruments not measured at fair value includes cash
and cash equivalents, trade and other receivables, trade and other
payables, loans and borrowings, and lease liabilities. Due to their
short-term nature, the carrying value of cash and cash equivalents,
trade and other receivables, and trade and other payables
approximates their fair value.
IFRS 13 requires nancial instruments that are measured at fair
value to be classi ed according to the valuation technique
used:
-- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
-- Level 2 - inputs, other than level 1 inputs, that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived form prices)
-- Level 3 - unobservable inputs
All derivative nancial assets and liabilities are classi ed as
Level 1 instruments as they are quoted market prices.
Contingent consideration is measured at fair value using Level 3
inputs such as entity projections of future probability. The amount
recognised relates to the ongoing pro tability of the business
acquired and criteria for this are set out in the sale and purchase
agreements. Consequently, adjustments would only be made if the
business did not perform as originally anticipated, and further
sensitivity analysis is not considered to be required.
Transfers between levels are deemed to have occurred at the end
of the reporting period. There were no transfers between levels in
the above hierarchy in the period.
Fair value Amortised cost
Unaudited Unaudited Audited Unaudited Unaudited Audited
six six year six six year
months months ended months months ended
ended ended 31 ended ended 31
30 30 October 30 30 October
April April 2020 April April 2020
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ---------- ---------- --------- ---------- ---------- ---------
Financial assets
Cash
and
cash
equivalents - - - 4,991 3,452 19,980
Trade
and
other
receivables - - - 75,180 75,316 55,757
Derivatives 227 185 93 - - -
227 185 93 80,171 78,768 75,737
---------------- ---------- ---------- --------- ---------- ---------- ---------
Financial labilities
Trade
and
other
payables - - - 63,029 62,166 51,303
Loans
and
borrowing - - - 979 2,173 1.572
Deferred
and
contingent
consideration 592 286 229 - - -
Derivatives 214 79 263 - - -
806 365 492 64,008 64,339 52,875
---------------- ---------- ---------- --------- ---------- ---------- ---------
13. EARNINGS PER SHARE
Basic earnings per 25p ordinary share has been calculated by
dividing profit for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares in
issue during the period. For diluted earnings per share the
weighted average number of ordinary shares is adjusted to assume
conversion of all dilutive potential ordinary shares (share options
and warrants) taking into account their exercise price in
comparison with the actual average share price during the year.
Unaudited Unaudited
six months six months
ended ended
30 April 2021 30 April 2020
------------------------------------ --------------- ---------------
Weighted average number of shares
in issue: basic 20,055,501 19,896,621
Earnings per share: basic 21.62 17.50
Weighted average number of shares
in issue: diluted 20,365,205 19,978,002
Earnings per share: diluted 21.30 17.43
14. SHARE CAPITAL
Number of shares Total
000s GBP000's
----------------------------------- ----------------- ---------
Allotted and fully paid: ordinary
shares 25p each
Balance at 31 October 2019 19,896 4,974
Issue of shares 111 28
----------------------------------- ----------------- ---------
Balances at 30 April 2020 20,007 5,002
Issue of shares 44 11
----------------------------------- ----------------- ---------
Balances at 31 October 2020 20,051 5,013
Issue of shares 86 21
----------------------------------- ----------------- ---------
Balances at 30 April 2021 20,137 5,034
----------------------------------- ----------------- ---------
The shares issued in the period related to 24,000 company share
options (2020: GBPnil) and 62,000 (2020: 111,000) shares allotted
to shareholders exercising their rights to receive dividends under
the Company's scrip dividend scheme. No other shares were allocated
during the current or prior period.
As at 30 April 2021 a total of 20,137,000 shares are in issue
(2020: 20,007,000).
15. DIVIDS
During the period ended 30 April 2021 an amount of GBP2,008,000
(2020: GBP1,870,000) was charged to reserves in respect of equity
dividends paid. An interim dividend of 5.00p per share (2020:
4.60p) will be paid on 29 October 2021 to shareholders on the
register on the 1 October 2021. New elections to receive Scrip
Dividends should be made in writing to the Company's Registrars
before 15 October 2021.
16. OTHER RESERVES
Included in Other reserves are share-based payments; as the
Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at fair
value at the date of the grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest.
The Group operates a number of share option and 'Save As You
Earn' schemes and fair value is measured by use of a recognised
valuation model. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
At the 30 April 2021 the ESOP Trust, which is consolidated
within the Group financial statements, held 16,834 (2020: 16,834)
Ordinary Shares in the Group.
17. GROUP FINANCIAL COMMITMENTS
During the period, the Group was released from a bank guarantee
in relation to an Associate company, therefore as at the 30 April
2021, the Group did not have any contingent liabilities in respect
of bank guarantees of its Associates (2020: GBP125,000).
18. CAPITAL COMMITMENTS
As at 30 April 2021 the Group had capital commitments as
follows:
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 April 2021 30 April 31 October
2020 2020
GBP'000 GBP'000 GBP'000
----------------------------------- --------------- ------------ ------------
Contracts placed for future
capital expenditure not provided
in the financial statements 20 38 264
19. RELATED PARTIES
Transactions between the Company and its subsidiaries, which are
related parties have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and its
Joint Ventures are described below:
Transaction value Balance outstanding
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six months year six months six months year
ended ended ended ended ended ended
30 April 30 April 31 October 30 April 30 April 31 October
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sales of goods
to joint ventures 2,952 2,786 5,467 572 1,019 427
Purchases of
goods from joint
ventures 155 35 139 (44) 6 (5)
Loans with joint
ventures (24) 1,840 (524) 3,865 4,929 3,889
-------------------- ------------ ------------ ------------ ------------ ------------ ------------
20. BUSINESS COMBINATION NOTE
HELM Great Britain Limited
On 3 March 2021, Glasson Grain Limited entered into a business
combination and acquired 100% of the Fertiliser manufacturing
business and certain assets of HELM Group legally know as HELM
Great Britain Limited.
The provisional consideration is GBP1,658,000 which is
represented by GBP1,658,000 paid during the year for certain
assets.
Amounts included in the Consolidated Statement of Comprehensive
Income period to 30 April 2021 are revenues of GBP4,134,000 and
profit before tax of GBP168,000.
Agricultural division of Armstrong Richardson & Co.
Limited
On 12 February 2021, Wynnstay (Agricultural Supplies) Limited
entered into a business combination and acquired 100% of the trade
and certain assets of Armstrong Richardson & Co. Limited.
The provisional consideration is GBP548,000 which is represented
by GBP154,000 paid during the year for certain assets and goodwill
and contingent consideration of GBP50,000 relating to goodwill and
deferred consideration of GBP344,000 for inventory, which is
expected to be paid by 12 February 2023. The consideration payable
is dependent on the employee retention and future product
volume.
The fair value of the contingent consideration has been based on
management expectation of future performance of the business and
could range from GBPnil to GBP50,000.
Amounts included in the Consolidated Statement of Comprehensive
Income period to 30 April 2021 are revenues of GBP1,401,000 and
profit before tax of GBP14,000.
The goodwill represents future sales opportunities and is not
expected to be deductible for tax purposes.
HELM Great Agricultural Total
Britain Limited division
of Armstrong
Richardson
& Co. Limited
GBP'000 GBP'000 GBP'000
------------------------------- ----------------- --------------- --------
Provision for fair value
of asset acquired
Goodwill - 50 50
Intangibles - 138 138
Property, plant and equipment 225 16 241
Inventories 1,433 344 1,777
------------------------------- ----------------- --------------- --------
Provisional consideration 1,658 548 2,206
Contingent and deferred - (394) (394)
------------------------------- ----------------- --------------- --------
Settled in cash at completion 1,658 154 1,812
------------------------------- ----------------- --------------- --------
Acquisition costs of GBP17,000 arose as a result of the above
transactions, these have been recognised as part of administrative
expenses.
Both acquisitions were parts of larger legal entities and
therefore the historic sales, gross profit and profit before tax in
the period prior to the acquisition is not publicly available.
The business combination accounting will be finalised 12 months
from the date of acquisition.
Contingent and deferred considering of GBP32,000 was paid during
the six-month period to 30 April 2021 relating to prior period
acquisitions, resulting in a total outflow of GBP1,844,000 in the
six month period to 30 April 2021.
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END
IR SEUFIUEFSEDM
(END) Dow Jones Newswires
June 30, 2021 02:00 ET (06:00 GMT)
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