NWF Group PLC Trading Upgrade and COVID-19 Response Update (2231L)
29 Abril 2020 - 1:00AM
UK Regulatory
TIDMNWF
RNS Number : 2231L
NWF Group PLC
29 April 2020
NWF Group plc
29 April 2020
NWF Group plc
NWF Group plc: Trading Upgrade and COVID-19 Response Update
COVID-19 Response
NWF Group plc ('NWF' or the Group), the specialist distributor
of fuel, food and feed across the UK, is pleased to report the
Group is responding effectively to the disruption presented by the
COVID-19 outbreak and has been able to maintain its operations on a
continuing basis, supporting customers at this challenging
time.
The Group provides critical products and logistical support to
customers across the food retail, fuel and agriculture markets. As
such, our employees have been designated as key workers and the
Group has not sought any Government support for operations nor
furloughed any staff to date. Our first priority has been to ensure
the safety and well being of our people. In line with guidance, we
have moved as many employees as possible to home working and where
home working is not possible, workplace segregation and social
distancing measures have been implemented.
The Group has moved swiftly to take appropriate actions to
manage costs and preserve balance sheet flexibility to ensure risk
is managed during this unprecedented situation. Alongside this,
significant work has been undertaken on short and medium term cash
flow forecasting to support decision making and consequently the
Board is confident that the Group is in a strong position to manage
through this period of uncertainty.
As a reminder our net debt, excluding the impact of IFRS 16, at
the 30 November 2019 was GBP14.9 million, resulting in a net debt
to EBITDA ratio of 1.0x. The Group has committed bank facilities of
GBP65.0 million, running to October 2023, of which GBP47.6 million
was undrawn as at the end of March 2020.
Trading update
As set out in the interim results on 28 January 2020, the Group
delivered a strong performance in the first half, with increased
activity levels in all divisions. The Group continued to trade well
through the third quarter, in line with the Board's
expectations.
Given the essential nature of the products supplied by the
Group, we have seen a significant increase in demand and activity
levels during March and April to date. Whilst some cost and
operational restructuring has been required to accommodate this, it
has resulted in an acceleration of the trading momentum through the
final quarter of the year. Furthermore, the Fuels business and its
customers have benefited from a significant fall in oil prices over
recent weeks which will make material contribution to profits in
the short term.
In Food demand reached unprecedented levels during March and
April as food retailers managed a significant surge in demand for
ambient groceries. We have worked with food manufacturers and
retailers to meet this demand and have now established a
sustainable supply position. Whilst operations were initially
inefficient through the demand spike, performance is now at
optimised levels in the circumstances with the some of the
additional revenue from this activity being offset by additional
costs required to ensure safe working. Progress is being made in
the new warehouse at Crewe with 12,000 racking spaces available to
date, stock being stored and shipments commencing broadly in line
with our plans.
In Feeds demand has been in line with expectations and we
continue to deliver greater volumes of ruminant feed than the prior
year. A recent significant increase in feed commodity prices,
particularly proteins, is impacting the business in the short
term.
In Fuels performance across both the core and acquired
businesses was strong through to the end of February with the
former trading well ahead of prior year. Demand for heating oil
increased significantly in March and into April combined with a
deep, sharp and sustained fall in the oil price that has enhanced
margins. Demand from commercial customers has been significantly
reduced given lower levels of economic activity during
lockdown.
Outlook
In light of the backdrop, visibility remains limited and the
Board is mindful of the considerable uncertainty as to outlook
moving forward. However, whilst it is expected that activity levels
will reduce in May, given the previous strong underlying
performance of the Group, combined with benefits to date of the
higher demand and a lower oil price experienced recently, the Board
now anticipates that overall trading for the full year will be
significantly ahead of prior year.
At this point and in light of the ongoing uncertainty, the Board
does not believe it is appropriate to provide guidance on
performance for the year ending 31 May 2021. However, the Board has
been encouraged both by the strong performance of the Group as well
as the exceptional response by its people to the COVID-19 outbreak
and remains confident in the long term prospects of the Group.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
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 / Mike Bell /
Executive James Bavister Ed Allsopp
Chris Belsham, Group MHP Communications Peel Hunt LLP (Nominated advisor)
Finance Director Tel: 020 3128 Tel:0 020 7418 8900
NWF Group plc 8100
Tel: 01829 260 260
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END
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