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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wynnstay Group Plc | LSE:WYN | London | Ordinary Share | GB0034212331 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 350.00 | 340.00 | 360.00 | 350.00 | 350.00 | 350.00 | 11,199 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Farm Management Services | 735.88M | 6.93M | 0.3018 | 11.60 | 80.34M |
From Apr 2019 to Apr 2024
TIDMWYN
RNS Number : 5543C
Wynnstay Group PLC
29 June 2016
AIM: WYN
29 June 2016
WYNNSTAY GROUP PLC
("Wynnstay" or "the Group")
Half Year Results
For the six months to 30 April 2016
Key Points
-- Robust results in line with management expectations
- balanced business model continued to help offset impact of poor trading environment; low prices for farmers' products now in second year
-- Revenue of GBP193.24m (2015: GBP200.56m) - commodity price deflation reduced revenue by c. GBP20m
-- Pre-tax profit of GBP4.08m (2015: GBP4.82m) -- Earnings per share of 17.22p (2015: 20.26p) -- Net debt at 30 April 2016 reduced to GBP3.90m (2015: GBP8.09m) -- Net assets at 30 April 2016 increased to GBP85.06m (2015: GBP80.28m) -- Interim dividend of 4.00p (2015: 3.70p) - an increase of 8.1% - in line with progressive dividend policy - reflects Board's view of cyclical nature of sector downturn -- Agricultural Division - revenue of GBP135.18m, operating profit of GBP1.82m - affected by lower demand for dairy-related feed products - arable products in H1 higher year-on-year after a relatively slow start -- Specialist Retail Division - revenue of GBP57.97m, operating profit of GBP2.41m
- affected by wider sector conditions although trading at Wynnstay Stores was generally encouraging
- Agricentre integration underway - expected to make a positive contribution to Group in 2017. H1 revenue contribution of GBP5.97m
-- Shorter term challenges remain but the Group is positioned to achieve its targets for the full year
Ken Greetham, Chief Executive of Wynnstay, commented:
"We are pleased to deliver robust results, in line with management expectations, despite a particularly challenging backdrop of poor output prices for farmers, which has affected the entire industry. These robust results have been underpinned by the Group's broad spread of activities across both the arable and feed sectors.
Along with our strong balance sheet, the breadth of Wynnstay's model leaves us well-positioned to take advantage of opportunities for growth and we continue to invest in the infrastructure of the business.
While the macroeconomics of the market suggest a return to more acceptable pricing, which will bring renewed vigour to the sector, the recovery in output prices for farmers is difficult to predict. Notwithstanding this and the emerging implications of the EU referendum result, we believe that Wynnstay remains positioned to achieve its targets for the financial year and continue to view long term prospects positively."
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CHAIRMAN'S STATEMENT
INTRODUCTION
The Group has delivered robust results in the first half with pre-tax profit of GBP4.08m (2015: GBP4.82m) on revenues of GBP193.24m (2015: GBP200.56m). While lower than last year, results are in line with management expectations, and reflect deflation and subdued activity as depressed prices for farmers' products continued to squeeze industry spend. This climate of poor output prices for farmers, which relates to an imbalance in world markets, is now in its second year and remains an issue for the whole industry. Against this unusually challenging backdrop, the Group's broad business base, with its spread of activities across both the arable and feed sectors, continues to demonstrate the advantages of our model.
Pressure on farm income is particularly evident in the dairy sector with feed volumes down year-on-year, reflecting the wider national trend. After a relatively slow start, sales of arable products gained momentum, with strong sales of seed and increased direct-to-farm fertiliser volumes. Grain trading volumes increased reflecting the good harvest last year but grain prices remained low.
Trading at Wynnstay Stores, which is principally geared towards farmers, was also affected by these adverse trading conditions but we are pleased with the overall performance. The integration of Agricentre, the farm supplies operation based in Calne, Wiltshire, which we acquired at the end of October 2015 is progressing. Rebranded 'Wynnstay Agricentre', the eight stores, which were loss-making at acquisition, are expected to make a positive contribution to the Group in 2017.
Looking ahead, we continue with our investment plans across the Group and believe that Wynnstay is well positioned within the agricultural supply sector. While the macroeconomics of the market suggest a return to more acceptable pricing, which will bring renewed vigour to the sector, the recovery in output prices for farmers is difficult to predict.
The result of last week's EU referendum vote is not expected to bring immediate change to our sector and given the importance of UK agriculture and the wider rural economy, and factors such as the environment and tourism, the industry anticipates ongoing support from government. Notwithstanding the uncertainty, as a result of the EU referendum and low farmgate prices, we believe that Wynnstay remains positioned to achieve its targets for the financial year and continue to view long term prospects positively.
FINANCIAL RESULTS
Revenue for the six months to 30 April 2016 was GBP193.24m (2015: GBP200.56m). This 3.6% reduction reflects continuing commodity price deflation, which reduced revenue by an estimated GBP20m, as well as lower volumes of manufactured feed products. The Agriculture Division contributed GBP135.18m (2015: GBP147.33m) to Group revenues and our Specialist Retail Division contributed revenue of GBP57.97m (2015: GBP53.18m), including GBP5.97m from the Agricentre acquisition, which represented a full six months contribution (2015: nil).
Operating profit decreased to GBP4.18m (2015: GBP4.95m), after intangible amortisation and share-based payment charges of GBP0.07m (2015: GBP0.18m). Operating profit in the Agricultural Division was GBP1.82m (2015: GBP2.23m), with lower demand for dairy related feed products the primary factor affecting this result. Operating profit at our Specialist Retail Division decreased to GBP2.41m (2015: GBP2.85m) and was also affected by the adverse impact on farm incomes, as well as the initial higher costs relating to the Agricentre acquisition and the new Just for Pets stores. Other activities incurred a lower year-on-year operating loss of GBP0.05m (2015: GBP0.13m), primarily as a result of lower share based remuneration charges. As in prior years, the contribution from our Joint Ventures will be consolidated into the full year results.
Net finance costs reduced to GBP0.10m (2015: GBP0.13m) reflecting lower average net debt through the period, with commodity price deflation benefiting working capital. Net debt at 30 April 2016 reduced by 52% year-on-year to GBP3.90m (2015: GBP8.09m), following lower working capital utilisation in the first half, which is historically the Group's peak cash requirement period.
Profit before tax decreased to GBP4.08m (2015: GBP4.82m) and earnings per share were 17.22p (2015: 20.26p).
Net assets at 30 April 2016 were 6% higher at GBP85.06m (2015: GBP80.28m). This represents approximately GBP4.38 per share (2015: GBP4.20 per share), based on the weighted average number of shares in issue during the period of 19.39m (2015: 19.13m).
DIVID
The Board is pleased to declare an increased interim dividend of 4.00p per share (2015: 3.70p), a rise of 8.1% year-on-year. The dividend is in line with our progressive dividend policy and reflects both the Board's view of the cyclical nature of the current downturn and its confidence in Wynnstay's long term prospects. It will be paid on 31 October 2016 to shareholders on the register at the close of business on 30 September 2016. As in previous years, a Scrip Dividend alternative will also be available, with the last day for election for this scheme being 14 October 2016.
REVIEW OF OPERATIONS
AGRICULTURE
Output prices for farmers remain below the realistic cost of production. This is particularly evident in the dairy sector and has resulted in a UK wide reduction in demand for feed products. Grain prices also remain low, however the 2015 yields were good, and have led to increased trading volumes for the season. The combination of subdued market sentiment and a delayed spring tempered demand for arable inputs in the first quarter. However demand gained momentum in the second quarter and the resultant spot trade was very encouraging. Consequently, first half sales for arable inputs were ahead of the comparable period last year although the shift in buying patterns added to distribution costs.
Feed Products
The challenges faced by customers supplying the dairy market resulted in a reduction in demand for compound and blended feeds, although this was partly offset by an increase for sheep feeds. Reflecting the national trend, overall feed volumes were lower than the comparable period in 2015, which was strong, but outperformed the 2014 season. Pressure on margins during the period was partly offset by efficiency gains and a reduction in third party manufacture. The Group continues to invest in its feed mills and plans are underway for a state-of-the-art packaging facility which will support distribution to our expanding network of retail stores.
Glasson Grain
Sales of fertiliser gained momentum in the second quarter and the volume of both traded raw materials for feed and of specialist products has been buoyant. However, as expected, overall margin pressure has reduced the contribution from the Glasson business compared to last year's strong performance.
Arable Products
After a relatively slow start, demand for arable products was buoyant in the spring and the resultant spot market was very active. Strong cereal and herbage seed sales helped drive total arable product volumes and sales above last year's level - although the late spring delayed demand for agrochemicals. Direct-to-farm fertiliser sales were also very strong in the second quarter, resulting in higher volumes in the first half year-on-year. The large grain harvest from the 2015 season contributed to an increase in the volume of cereals marketed through our GrainLink and Woodheads businesses. There is still a reasonable volume of grain on farms which, along with the anticipated 2016 harvest, creates opportunity for trading into the next financial year.
SPECIALIST RETAIL
Wynnstay Stores
The network of Wynnstay Stores has grown significantly over recent years and now totals 51 outlets. These outlets provide strong links with our customer base and act as a platform for the continued development of the agricultural business. The integration of the recently acquired Agricentre business is underway and the stores have now been rebranded as 'Wynnstay Agricentre'. The acquisition takes Wynnstay Stores into a major new geographic region, which encompasses the South and West Country, and part of our integration initiative will be to increase the range of products available throughout Wynnstay Agricentre's trading area.
Overall sales increased by 10.7%, reflecting the Agricentre acquisition, however there was a small reduction in like-for-like sales. This mainly reflected a reduced level of spending in the livestock sector, including a reduction in collected fertiliser and some hardware products.
Just for Pets
During the period, the number of outlets in the business increased to 23 stores, with a new store opened at Nottingham, following two new stores at Cambourne and Reading in the second half of the last financial year. Like-for-like sales from Just for Pets reduced slightly in the period and its operating profit contribution was affected by costs associated with the newer stores. In May, we established a new concept store at a rural destination centre, which has taken store numbers to 24. Branded 'Bessie and Boo', this new outlet is a pet boutique store catering for the leisure shopper. Early signs are encouraging and we are considering opportunities to replicate the model. We also plan to open further new stores which follow our traditional format in the second half of the financial year.
JOINT VENTURES AND ASSOCIATES
As usual, the results from the Group's joint ventures and associate companies will be consolidated into the Group's full year results and are not included in this interim report.
BOARD CHANGES
In April 2016, Steve Ellwood, formally joined the Board of Wynnstay as a Non-executive Director. We are delighted to welcome him and believe that Wynnstay will benefit from his extensive commercial and banking experience in the Agricultural and Agri-food sector.
OUTLOOK
The agricultural environment remains difficult for our farmer customers and there are only limited signs of improvement in near term trading conditions. Nonetheless, we continue to take a positive view of prospects for UK agriculture, which are expected to benefit from long term macroeconomic drivers. The outcome of the recent referendum on the UK's membership of the European Union now brings to the fore the question of the ongoing level of economic support for agriculture and rural communities. While this brings uncertainty, the industry expects some degree of financial support to continue given the sector's strategic importance. As the exit agreement and new trade deals are negotiated, the UK will remain an efficient producer of agricultural products to the domestic and world markets. The breadth of the Wynnstay model will stand the Group in good stead and bring further opportunities as the industry evolves. There is no doubt however that the requirement for further efficiency within all parts of the agricultural industry will be an important aspect for all businesses.
We continue to invest in the infrastructure of the business to support Wynnstay's long term prospects and, with its broad business base and strong balance sheet, the Group remains well placed to take advantage of opportunities for continued growth.
Jim McCarthy
Chairman
WYNNSTAY GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 April 2016
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 October
30 April 30 April 2015
2016 2015
Note GBP'000 GBP'000 GBP'000
----------------------------- ----- ------------ ------------ ------------
Revenue 193,237 200,556 377,382
Cost of sales (164,781) (172,410) (321,874)
----------------------------- ----- ------------ ------------ ------------
Gross profit 28,456 28,146 55,508
Manufacturing, distribution
and selling costs (21,131) (20,344) (42,265)
Administrative expenses (3,268) (2,855) (4,666)
Other operating
income 11 187 185 476
----------------------------- ----- ------------ ------------ ------------
Group operating
profit before intangible
amortisation share-based
payment costs and
exceptional item 4,244 5,132 9,053
Intangible amortisation
and share-based
payment costs (69) (183) (344)
Exceptional item - - (319)
Group operating
profit 4,175 4,949 8,390
Interest income 18 21 50
Interest expense (118) (148) (290)
Share of profits/(losses)
in associates and
joint ventures 2 - - 245
Share of tax incurred
in associates and
joint ventures - - (58)
Profit before taxation 4,075 4,822 8,337
Taxation 5 (735) (947) (1,667)
Profit for the period 3,340 3,875 6,670
----------------------------- ----- ------------ ------------ ------------
Earnings per 25p
share before exceptional 6 17.22p 20.26p 36.32p
Diluted earnings
per 25p share before
exceptional 6 17.14p 20.02p 35.91p
Earnings per 25p
share 6 17.22p 20.26p 34.66p
Diluted earnings
per 25p share 6 17.14p 20.02p 34.27p
----------------------------- ----- ------------ ------------ ------------
WYNNSTAY GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 April 2016
Unaudited Unaudited Audited
as at 30 as at 30 as at
April 2016 April 2015 31 October
2015
Note GBP'000 GBP'000 GBP'000
----------------------------- ----- ------------ ------------ ------------
Assets
Non-current assets
Goodwill 18,142 17,521 18,155
Investment property 2,372 - 2,372
Property, plant and
equipment 19,312 18,490 19,424
Investments 3,580 3,643 3,680
Intangibles 117 83 124
----------------------------- ----- ------------ ------------ ------------
43,523 39,737 43,755
----------------------------- ----- ------------ ------------ ------------
Current assets
Inventories 34,016 30,929 31,694
Trade and other receivables 57,457 64,054 48,607
Held for sale assets 7 - 2,372 -
Financial assets -
loans to joint ventures 2,802 2,802 2,802
Cash and cash equivalents 12 2,762 91 9,750
97,037 100,248 92,853
----------------------------- ----- ------------ ------------ ------------
Total assets 140,560 139,985 136,608
Liabilities
Current liabilities
Financial liabilities
- borrowings (2,948) (6,646) (3,643)
Trade and other payables (47,519) (50,134) (44,739)
Current tax liabilities (1,107) (1,047) (861)
(51,574) (57,827) (49,243)
----------------------------- ----- ------------ ------------ ------------
Net current assets 45,463 42,421 43,610
----------------------------- ----- ------------ ------------ ------------
Non-current liabilities
Financial liabilities
- borrowings (3,711) (1,537) (3,972)
Trade and other payables - (50) (246)
Deferred tax liabilities (220) (292) (292)
(3,931) (1,879) (4,510)
----------------------------- ----- ------------ ------------ ------------
Total liabilities (55,505) (59,706) (53,753)
----------------------------- ----- ------------ ------------ ------------
Net assets 85,055 80,279 82,855
----------------------------- ----- ------------ ------------ ------------
Equity
Ordinary shares 8 4,862 4,835 4,848
Share premium 28,679 28,251 28,439
Other reserves 2,932 2,593 2,890
Retained earnings 48,582 44,600 46,678
Total equity 85,055 80,279 82,855
----------------------------- ----- ------------ ------------ ------------
WYNNSTAY GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months ended 30 April 2016
Share Share Other Retained Total
capital premium reserves earnings equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ----- --------- --------- ---------- ---------- --------
Balance at 1 November
2014 4,777 27,633 2,796 42,025 77,231
Profit for the period - - - 3,875 3,875
---------------------------- ----- --------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - - 3,875 3,875
---------------------------- ----- --------- --------- ---------- ---------- --------
Transactions with
owners of the company,
recognised directly
in equity
Shares issued during
the period 58 618 - - 676
Own shares acquired
by ESOP trust - - (380) - (380)
Dividends - - (1,300) (1,300)
Equity settled share-based
payments transactions - - 177 - 177
---------------------------- ----- --------- --------- ---------- ---------- --------
Total contributions
by and distributions
to owners of the
Group 58 618 (203) (1,300) (827)
---------------------------- ----- --------- --------- ---------- ---------- --------
At 30 April 2015 4,835 28,251 2,593 44,600 80,279
---------------------------- ----- --------- --------- ---------- ---------- --------
Profit for the period - - - 2,795 2,795
---------------------------- ----- --------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - - 2,795 2,795
---------------------------- ----- --------- --------- ---------- ---------- --------
Transactions with
owners of the company,
recognised directly
in equity
Shares issued during
the period 13 188 - - 201
Own shares disposed
of by ESOP trust - - 140 - 140
Dividends - - - (717) (717)
Equity settled share-based
payments transactions - - 157 - 157
---------------------------- ----- --------- --------- ---------- ---------- --------
Total contributions
by and distributions
to owners of the
Group 13 188 297 (717) (219)
---------------------------- ----- --------- --------- ---------- ---------- --------
At 31 October 2015 4,848 28,439 2,890 46,678 82,855
---------------------------- ----- --------- --------- ---------- ---------- --------
Profit for the period 3,340 3,340
---------------------------- ----- --------- --------- ---------- ---------- --------
Total comprehensive
income for the period 3,340 3,340
---------------------------- ----- --------- --------- ---------- ---------- --------
Transactions with
owners of the company,
recognised directly
in equity
Shares issued during
the period 8 14 240 - - 254
Own shares acquired
by ESOP trust - - (20) - (20)
Dividends 9 - - (1,436) (1,436)
Equity settled share-based
payments 14 - - 62 - 62
---------------------------- ----- --------- --------- ---------- ---------- --------
Total contributions
by and distributions
to owners of the
Group 14 240 42 (1,436) (1,140)
---------------------------- ----- --------- --------- ---------- ---------- --------
At 30 April 2016 4,862 28,679 2,932 48,582 85,055
---------------------------- ----- --------- --------- ---------- ---------- --------
WYNNSTAY GROUP PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 April 2016
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 October
30 April 30 April 2015
2016 2015
Note GBP'000 GBP'000 GBP'000
-------------------------------- ----- ------------ --------------------------- ------------------------
Cash flow from operating
activities
Cash (used in) / generated
from operations 13 (3,033) (7,378) 8,609
Interest received 18 21 50
Interest paid (118) (148) (290)
Tax paid (561) (613) (1,519)
Net cash flows from
operating activities (3,694) (8,118) 6,850
-------------------------------- ----- ------------ --------------------------- ------------------------
Cash flows from investing
activities
Acquisitions in period - (387) (3,287)
Proceeds on sale of
property, plant and
equipment 121 180 313
Purchase of property,
plant and equipment 13 (603) (707) (1,836)
Proceeds on sale of
investments 100 - 150
Own shares acquired
by ESOP Trust - (380) (380)
Own shares disposed
of by ESOP trust (20) - 140
Net cash used by investing
activities (402) (1,294) (4,900)
-------------------------------- ----- ------------ --------------------------- ------------------------
Cash flows from financing
activities
Net proceeds from the
issue of ordinary share
capital 254 676 877
Net proceeds from drawdown
of new loans - - 3,500
Finance lease principal
repayments (320) (482) (985)
Repayments of borrowings (1,400) (986) (1,967)
Dividends paid to shareholders (1,436) (1,300) (2,017)
Net cash generated
from financing activities (2,902) (2,092) (592)
-------------------------------- ----- ------------ --------------------------- ------------------------
Net (decrease)/increase
in cash and cash equivalents (6,998) (11,504) 1,358 Cash and cash equivalents at beginning of period 9,747 8,389 8,389 Cash and cash equivalents at end of period 12 2,749 (3,115) 9,747 -------------------------------- ----- ------------ --------------------------- ------------------------
WYNNSTAY GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
The Interim Report was approved by the Board of Directors on 28 June 2016.
The condensed financial statements for the six months to the 30 April 2016 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 2015 set out above is an extract from the published financial statements for that year which have been delivered to the Registrar of Companies. The auditors' 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 2016 and for the six months ended 30 April 2015 is unaudited.
The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for year ended 31 October 2015, which have been prepared in accordance with IFRS as adopted by the EU.
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.
2. Consolidation of share of results in joint ventures and associates
As 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 2016. 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 on an historical cost basis or fair value basis as appropriate.
The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 October 2015. A copy of these financial statements is available from the Company's Registered Office at Eagle House, Llansantffraid, Powys SY22 6AQ.
The following adopted IFRS have been issued but have not been applied by the Group in these financial statements.
Their adoption is not expected to EC Effective
have a material effect on the financial for accounting
statements. periods commencing
New or amendments to existing standards on or after
Accounting for Acquisitions of Interest
in Joint Ventures - amendment to IFRS 1 January
11 2016
Clarification of Acceptable Methods 1 January
of Depreciation and Amortisation 2016
- Amendments to IAS 16 and IAS 38
Agriculture: Bearer Plants - Amendments 1 January
to IAS 16 and IAS 41 2016
Equity Methods in Separate Financial 1 January
Statement - Amendment to IAS 27 2016
Annual Improvements to IFRSs - 2012 1 January
- 2014 Cycle 2016
Disclosure initiative - Amendments 1 January
to IAS 1 2016
Disclosure initiative - Amendments 1 January
to IAS 7 2017
Recognition of Deferred Tax assets
for Unrealised Losses ( Amendments 1 January
to IAS 12) 2017
IFRS 15 Revenue from Contracts with 1 January
Customers 2018
1 January
IFRS 9 Financial Instruments 2018
1 January
IFRS 16 Leases 2019
The accounting policies applied by the Group in these condensed consolidated interim statements are substantially the same as those applied by the Group in its consolidated financial statements for the 12 months ending 31 October 2015. There have been a number of minor changes to standards which became applicable for the year ended 31 October 2016, none of which have been assessed as having a significant impact on the Group.
4. Exceptional item
The Exceptional item included last year related to expenses associated with the acquisition and re-organisation of the business and certain trading assets of the Agricentre Farm Supplies.
5. Taxation
The tax charge for the six months ended 30 April 2016 and 30 April 2015 is based on an apportionment of the estimated tax charge for the full year.
The effective tax rate is 18.03% which is lower than the standard rate of 20% (2015: 20%). Taxable profit differs from the profit as reported in the Group Statement of Comprehensive Income because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Reductions in the UK corporation tax rate to 20% effective from 1 April 2015 were substantively enacted on 2 July 2013. Further reductions to 19% (effective 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015. This will reduce the Groups future current tax charge accordingly. The deferred tax liability has been calculated based on a rate of 18% substantively enacted at the balance sheet date.
6. Earnings per share
Earnings per share have been calculated based on the profit attributable to ordinary shareholders of GBP3,339,926 (six months ended 30 April 2015: profit of GBP3,875,277) and the weighted average number of shares in issue of 19,392,684 (2015: 19,128,725). Diluted earnings per share are based on the aggregate weighted average number of shares and all potential shares adjusted for their proposed issue price, of 19,489,260 (2015: 19,356,042).
7. Held for sale assets
The assets previously categorised as "Held for sale " representing a re-developed property in Pwllheli, North Wales were classified in October 2015 as an Investment Property, as no realistic offer had been received. However the Group continues to actively market the property.
8. Share capital
During the current period a total of 57,920 (2015: 232,277) shares were issued with an aggregate nominal value of GBP14,480 (2015: GBP58,069) fully paid up for equivalent cash of GBP254,738 (2015: GBP676,301). Included in these issues were 52,120 (2015: 53,470) shares allotted to shareholders exercising their rights to receive dividends under the Company's scrip dividend scheme and 5,800 shares (2015: 178,807) allotted to relevant holders exercising options in the Company. No other shares (2015: nil) were allocated during the period. As at 30 April 2016 a total of 19,448,884 shares are in issue (2015: 19,340,696).
9. Dividends
During the period ended 30 April 2016 an amount of GBP1,435,831 (2015: GBP1,300,240) was charged to reserves in respect of equity dividends paid. An interim dividend of 4.00p per share (2015: 3.70p) will be paid on 31 October 2016 to shareholders on the register on 30 September 2016. New elections to receive scrip dividends should be made in writing to the Company's Registrars before 14 October 2016.
10. 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 access 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 Agricultural, Specialist Retail 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 segments, namely the United Kingdom.
Agriculture - Manufacturing and supply of animal feeds, fertiliser, seeds and associated agricultural products.
Specialist Retail - Supplies of a wide range of specialist products to farmers, smallholders and pet owners.
Other - Miscellaneous operations not classified as agriculture or specialist retail.
The Board assesses the performance of the operating segments based on a measure of operating profit. Finance income and costs are not included in the segmental result that is assessed by the Board.
Other information provided to the Board is measured in a manner consistent with that in the financial statements. Inter-segmental transactions are entered into under the normal commercial terms and conditions that would be available to unrelated third parties.
The Board has assessed the movement in net assets within each operating segment and notes that there has been no material differences compared to the previous year.
The segment results for the period ended 30 April 2016 are as follows:
Agriculture Specialist Other Total
Retail
GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------------------ ------------ ----------- --------- ---------
Unaudited for the six months
ended 30 April 2016:
Revenue 135,179 57,972 86 193,237
------------------------------------------------------- ------------ ----------- --------- ---------
Segment results 1,817 2,405 (47) 4,175
Share of result of associates
& joint
ventures - - - -
------------------------------------------------------ ------------ ----------- --------- ---------
1,817 2,405 (47) 4,175
Interest income 18
Interest expense (118)
---------
Profit before tax 4,075
Taxation (735)
---------
Profit for the period
attributable to shareholders 3,340
Unaudited for the six months
ended 30 April 2015 :
Revenue 147,334 53,176 46 200,556
------------------------------------------------------- ------------ ----------- --------- ---------
Segment results 2,225 2,850 (126) 4,949
Share of result of associates
& joint
ventures - - - -
------------------------------------------------------ ------------ ----------- --------- ---------
2,225 2,850 (126) 4,949
Interest income 21
Interest expense (148)
---------
Profit before tax 4,822
Taxation (947)
---------
Profit for the period
attributable to shareholders 3,875
Audited for the year ended
31 October 2015 :
Revenue 270,047 107,193 142 377,382
------------------------------------------------------- ------------ ----------- --------- ---------
Segment results 3,953 5,006 (250) 8,709
Share of result of associates
& joint ventures 181 76 (12) 245
------------------------------------------------------- ------------ ----------- --------- ---------
4,134 5,082 (262) 8,954
Exceptional item (319)
Interest income 50
Interest expense (290)
---------
Profit before tax 8,395
Income taxes (includes
tax of associates & joint
ventures (1,725)
---------
Profit for the year attributable
to shareholders 6,670
11. Other operating income
Unaudited Unaudited Audited
as at as at as at
30 April 30 April 31 October
2016 2015 2015
GBP'000s GBP'000s GBP'000s
-------------------------- ---------- ---------- ------------
Rental income 187 185 393
Other operating income - - 83
-------------------------- ---------- ---------- ------------
Other operating income 187 185 476
-------------------------- ---------- ---------- ------------
12. Cash and cash equivalents and bank overdrafts
Unaudited Unaudited Audited
as at as at as at
30 April 30 April 31 October
2016 2015 2015
GBP'000s GBP'000s GBP'000s
----------------------------- ---------- ---------- ------------
Cash and cash equivalents
per balance sheet 2,762 91 9,750
Bank overdrafts (13) (3,206) (3)
----------------------------- ---------- ---------- ------------
Cash and cash equivalents
per cash flow statement 2,749 (3,115) 9,747
----------------------------- ---------- ---------- ------------
13. Cash generated (used in)/generated from operations
Unaudited Unaudited Audited
six months six months year
ended ended ended 31
30 April 30 April October
2016 2015 2015
GBP'000s GBP'000s GBP'000s
--------------------------------- ------------ ------------ ----------
Profit for the period 3,340 3,875 6,670
Adjustments for:
Taxation 735 947 1,667
Depreciation of tangible
fixed assets 1,431 1,298 2,665
Amortisation of intangibles 7 6 10
(Profit) on disposal
of property, plant
and equipment (83) (146) (260)
Interest income (18) (21) (50)
Interest income 118 148 290
Share of results of
joint ventures and
associates - - (187)
Share based payment
expenses 62 177 334
Changes in working
capital (excluding
effects of acquisitions
and disposals of subsidiaries)
(Increase)/ decrease
in inventories (2,322) (1,055) 287
(Increase)/ decrease
in trade and other
receivables (8,850) (15,305) 143
Increase/ (decrease)
in payables 2,547 2,698 (2,960)
Cash (used in)/ generated
from operations (3,033) (7,378) (8,609)
---------------------------------- ------------ ------------ ----------
During the six months to 30 April 2016, the Group purchased property, plant and equipment of GBP1,357,000 (2015: GBP1,516,000) of which GBP754,000 (2015: GBP809,000) relates to assets acquired under finance leases.
14. Other reserves
Included in Other reserves are share-based payments: 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 2016, the ESOP Trust, which is consolidated within the Group's financial statements held 51,899 Ordinary Shares in the Group. The resulting impact of this consolidation has been a reduction in the other reserves figure, as shown in the condensed consolidated statement of changes in equity, of GBP263,000 and a GBP1,000 cash balance.
15. Group financial commitments
As at 30 April 2016, the Group's contingent liabilities in respect of bank guarantees for one of its joint ventures amount to GBP125,000 (2011: GBP125,000).
16. Capital commitments
As at 30 April 2016 the Group had capital commitments as follows:
Unaudited Unaudited Audited
as at as at as at
30 April 30 April 31 October
2016 2015 2015
GBP'000s GBP'000s GBP'000s
----------------------------------- ---------- ---------- ------------
Contracts placed for future
capital expenditure not provided
in the financial statements 2,005 262 377
----------------------------------- ---------- ---------- ------------
17. 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 and associates are described below:
Transaction value Balance outstanding
---------------------
Unaudited Unaudited Audited Unaudited Unaudited Audited
six six year as at as at as at
months months ended 30 30 31 October
ended ended 31 October April April 2015
30 April 30 April 2015 2016 2015
2016 2015
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
--------------------- ---------- ---------- ------------ ---------- ---------- ------------
Sales of goods
to Joint ventures
and associates 6,480 14,928 19,615 3,670 7,563 4,186
Purchases of
goods from
Joint ventures
and associates 3,677 6,052 8,031 2,758 1,676 424
Interest receivable
from Joint
ventures and
associates - 60 - -
Loans with
joint ventures - - - 2,802 2,802 2,802
Sales of goods to related parties were made at the Group's usual list prices, less average discounts. Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationship between parties.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFLRREITFIR
(END) Dow Jones Newswires
June 29, 2016 02:00 ET (06:00 GMT)
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