Wynnstay Share Discussion Threads

[gateside] 30/6/2005 12:54

DiogenesJ... You sum it up well "I think the company is doing its best in a tough market."

Every chance this may drift back a little further to 230p approx.

But the potential is still there and I like the diversification of the group, I can see less of their profits coming from the agricultural side of things, and more from the retail sector that they are building up.

I staying put for the longer term

[diogenesj] 30/6/2005 10:59

Sold mine. I think the company is doing its best in a tough market. Just not sure that the results justify the current share price.

[getscenic] 30/6/2005 08:29

Thanks Gates,
Interesting piece.
I for one will be sitting on these for the long term.
Am visiting my smallholder guru soon, and will be checking out a couple of outlets to get a bit of feedback.

[gateside] 30/6/2005 06:13

Excellent article from the Western Mail


Niche markets 'are the future' for Welsh farmers Jun 30 2005

FARMING in Wales has a future, that will be radically different to the present, the head of one of Britain's leading agricultural supplies companies said yesterday.

Bernard Harris, managing director of the Wynnstay Group, said farmers will have to exploit niche areas and stop trying to compete with mass-produced overseas supplies.

Wynnstay, founded in 1918 by tenant farmers, ceased to be a co-operative in 1992 and floated on the AIM stock market last year.

Its interim results, published yesterday, show that despite a forced tightening of the belt and a drop in turnover, pre-tax profits have increased by 9% to £1.99m. The group's net assets have climbed from £19.25m last year to £23.13m.

Mr Harris said the company had diversified, just as farms needed to in the 21st century. It is making inroads in the upmarket country clothing sector and has two housing development projects in Mid Wales.

Better margins on animal feed and an overhaul of retail sales have helped offset the challenges of high oil prices and changes in buying patterns brought about by reforms of the Common Agricultural Policy.

These have allowed farmers to shift away from a focus on production to concentrate on environmental and other programmes.

Mr Harris said, "I think the reforms have taken away uncertainty. I think there are great opportunities."

While few farmers will try to compete with the import of beef from Argentina, he predicted there will be an increase in demand for high-quality and distinctive local produce.

He said, "People don't want to think the food they are eating has been flown from the other side of the world ... I believe that's the salvation of UK agriculture - the niche areas."

Wynnstay is recruiting farmers interested in free-range egg production for the alternative premium egg market.

Such ventures will help support the incomes of the "part-time farmers" whom he expects to play a major part in Wales' agricultural economy. Though these people are not, he insisted, farming as a hobby, they will have a variety of business interests based around their farm.

Wynnstay's own increasing emphasis on retail is shown in its investment of a new IT system to speed sales and keep track of the products customers demand.

Mr Harris said, "We've been a little backward in our investment over the years. We've wanted to improve our point-of-sale software in our stores."

This is expected to immediately improve the quality of service.

He said, "If someone's shopping in Sainsbury's they expect to be dealt with at the counter pretty rapidly."

The expansion beyond work clothing into the high-end range of the market is also expected to prove lucrative.

He explained, "In the equestrian sector, fashion rules. We see a more affluent type of country dweller. People will respond to better quality."

Eighty per cent of the company's shareholders remain local farmers, and all staff own shares. The transition from being a cooperative to a company had been necessary, he argued, to raise the cash needed for investment.

"We don't [think] the relationship as customer and supplier has particularly changed," he said. "They have become more interested in the share value of their company."

But farmers did need to brace for a change in the market, he said, as a long period of over-supply of certain products came to an end as the industry adapted to the consequences of the CAP reforms.

He said, "Supply is going to tighten, definitely. I think we have provided a hugely beneficial service at very low costs. I believe, within the next 18 months to two years, thing will change."

[gateside] 29/6/2005 21:52

I believe the Eifionydd acquisition is a very shrewd move and will greatly improve future results, also the integration of the retail outlets will bring considerable future growth to the company.

There is good money to be made here; for those that are prepared to be patient.

[diogenesj] 29/6/2005 17:41

I think the reason is that these are seriously disappointing results, G. As far as I can see, there is no way they can make anything like the house brokers' forecasts for the full year, or even the much lower forecast by Shore Capital.

Furthermore, if they "achieved their budget" (as the chairman improbably claims), they have known for some time that they had no chance of meeting those forecasts and should have alerted the market accordingly.

A poor performance, and to make matters worse the chairman appears to be totally unaware of it.

[getscenic] 29/6/2005 15:30

market seems to have turned it's nose up at these figures. seems if you don't hit 20%,20%,10% these days the share get marked down!

[linhur] 29/6/2005 08:35

Steady as she goes. No major fireworks.
Pleased to see Abermule houses all sold at full prices.
Further progress on pet and equine sales.
Wynnstay is such a conglomerate with a lot of activities which balance out overall.
Good strong central management.

[gateside] 29/6/2005 07:33

INTERIM RESULTS
for the six months ended 30 April 2005

Based in Wales, Wynnstay manufactures and supplies agricultural products and
services to farmers and country dwellers.

* Profit before tax up 9% to #1.99 million (2004: #1.83 million)

* Turnover of #55.01 million (2004: #58.52 million)

* Basic earnings per share increased to 16.84p
(2004: 16.70p)

* Net assets rose 20% to #23.13 million (2004: #19.25 million)

* Good performances from three core divisions - Feeds, Arable and Stores

- improved margins at Feeds Division despite small fall in volumes
- Arable Division benefiting from new seed warehousing facility
- Stores refurbishment programme underway and construction of
new store at Newtown, Powys started

* New division, Foxmoor, saw successful first half with all sites running
at full capacity

* Outlook remains positive with good growth opportunities

John Davies, Chairman of Wynnstay Group Plc, commented,

"I am pleased to report favourable results for the six months to 30 April
2005.
Despite challenging trading conditions, including
mild weather and changes in
farmers' buying patterns as a result of Common Agricultural Policy Reform, we
achieved our budget and gained market share in most business sectors.

Since the start of the second half, we have seen signs of improving demand
across some sectors and we continue to work for productivity gains and a
reduction in the cost base of the business. Although our core businesses
continue to face challenges, particularly by the well-documented changes to the
C.A.P., we firmly believe the effects of the changes provide us with growth
opportunities. In particular, we are well placed to gain further market share
from rationalisation."

We expect to make steady progress over the second half of the year and I look
forward to updating shareholders in due course."

[gateside] 22/6/2005 10:47

Interim results were on 28th June last year.... so am expecting results any day now :-)

[diogenesj] 01/6/2005 14:20

Doesn't take much to move it. Bought in again this morning. Still looks cheap.

[marvelman] 31/5/2005 14:08

Large price rise on small volumes??

[getscenic] 12/5/2005 15:19

Shame it's not following NWF back up, having been spooked by thier warning in the first place.

[gateside] 12/5/2005 15:01

From The Shropshire Star

Building of agriculture store to start


Construction work on a £1 million agricultural superstore in Mid Wales is set to begin this month. The Wynnstay Group, based near Oswestry, is building in Newtown.

It will house a "centre of excellence" for equine products and clothing. The development will be three times the size of the company's other 24 stores and is expected to create a number of jobs.

A current store and warehouse on the site in Llanidloes Road has this week been demolished to make room for the two-storey premises.

Andrew Evans, marketing manager at Wynnstay, said: "When customers re-visit the Llanidloes Road site later this year they will see a totally transformed store with street frontage, two floors of product displays and improved parking and loading.

"When building and fitting works are completed in late autumn, Wynnstay will transfer from their temporary premises at Grooms Enterprise Park, Pool Road, Newtown."

[padi] 06/5/2005 13:41

Just picked up another £2.5k today at 240. Don't usually average down but the strength of the balance sheet sold it for me.

[marvelman] 06/5/2005 08:46

Gateside

Agreed.Bought in yesterday at £2.35.I feel this is is at the bottom (obviously)and a very good long termer for those with the patience.Super balance sheet and plenty of ambition to grow.

Regards

[gateside] 06/5/2005 08:31

Received the dividend yesterday.

Good to see a much tighter spread here than usual.

[gateside] 03/5/2005 23:10

230p acted as good levels of support in the Autumn, so there is a good possibility that it could do so again.

[marvelman] 03/5/2005 22:58

Padi

Realistically 16p per share fully diluted is the measure.Still very cheap considering the balance sheet fully underwrites the share price.

Regards

[getscenic] 03/5/2005 17:58

agree looking way oversold now, but need to see some blue days first.

[padi] 03/5/2005 17:53

With a EPS of 22.78p surely an PE of less than 10 is a bargain. Im tempting to consider liquidating some of my portfolio but Im not exactly sure when the share will stop falling.

Anyone know any resistence levels?

[gateside] 03/5/2005 14:47

Interim results were on 28th June last year, so we have a while to wait yet.

[gateside] 03/5/2005 14:44

NWF has bounced back up 10% today, so maybe this might have a positive effect on Wynnstay later in the week.

[padi] 03/5/2005 13:38

Just looking at the share price graph. We're close to floatation price now. All news since floatation has been positive so I can't see a reason why the share price has fallen 25% in 4-6 weeks.

The only explanation I can offer is negetive sentiment within the sector. NWF didn't help matters with a profit warning. As Wynnstay is a relatively unknown company on the stockmarket there are limited buyers. However when good news is announced the prices tends to rise significantly, see graph.

I think once the interim results are announced this month, we will hopefully see a price correction back to year highs.

Anyone else have any views?