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Wynnstay (LSE:WYN) today is a strong publicly-traded corporation with turnover approach half a billion, profits of over £7m a year and a quotation on London’s AIM. But it started as a small cooperative in Powys 100 years ago dedicated to helping farmers; and that heritage feeds through into the culture and the objectives of the firm.
It expanded at a very measured pace, at first in the border counties of Montgomeryshire and Shropshire, setting up mills, warehouses, buying grain suppliers, fuel suppliers; and amalgamating with Montgomeryshire Farmers Association and Vale of Clwyd Farmers. Turnover in 1988 was a mere £12m.
In 1992 it became a PLC and joined OFEX in 1995. When it moved to AIM in 2004 it was a £16.5m MCap company employing 340 people (it now has about 1,000).
By then its trading area covered Wales, the Welsh Border Counties and the Midlands. Its shares were sold at £1.90 (since then there have been no share splits, but issues of shares have been made under the scrip dividend arrangement, thus MCap has risen to 19.7m shares x £3.17 = £61m).
Strategy
This is the strategy, as set out in the 2004 AIM Admission Document:
“The Group intends to continue to develop its three trading divisions [Arable, Feeds, Stores (it had 24 stores then)]. As part of its five year corporate plan, it intends to expand these three key areas both organically and by suitable acquisition. The Directors believe they have the depth of expertise within the Company to continue to expand the business as they have in the past.”
In 2003 turnover was £85m. A number of feed, grain, retail and haulage acquisitions followed. There were some big moves such as the acquisition of Glasson Grain in Lancashire in 2006, Just for Pets in 2007, Wrekin Country Stores in 2007 and Young Animal Feeds in 2009. By 2009 turnover was £215m.
History shows a consistent strategy even to this day, as stated in the 2018 Annual Report:
“Over a period of the last thirty years, a twin stranded growth strategy has been successfully implemented…These two strands are represented by focused acquisitions, and gradual organic expansion through increasing geographical reach and product extension…The fragmented nature of the supply sector into farming and the rural economy has supported the success of this strategy, the Board believes that many opportunities remain, and that the continuation of this approach, with additional financial resource, will continue to produce rewarding results for all stakeholders in the business.”
Alongside the strategy the firm pursued a policy of increasing dividends – the 2004 Admission Document stated:
“The Company has a progressive dividend policy which seeks to reward shareholders. The Directors therefore intend to maintain a balance between retained profit and profit available for distribution to shareholders.”
In 2003 the dividend was 3.8p today it is 13.36p, an annual average growth rate of 7.7%. Over the last decade the dividend has grown by an average annual rate of 8.3%.
Even assuming
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