NWF driving growth, says Shore Capital
Distribution group NWF (NWF) has made an acquisition that Shore Capital says marks the start of a period of transaction-led growth.
Analyst Akhil Patel retained his ‘hold’ recommendation on the distributor of food, fuel and feed, which has bought Northern Energy Oil for £8.3m. Shares in NWF were trading flat at 174p on Monday morning.
The company currently trades on a 2025 price/earnings ratio of 10.1 times, has a free cashflow yield of 6.1%, and a dividend yield of 4.8%.
‘We believe NWF remains a solid business in stable markets with a strong management team and is well placed following prior and continued investment,’ said Patel.
‘Post the step up in growth from the food warehouse expansion, we see outer year growth being driven by inorganic activity across fuels mainly rather than organic growth.’ |
Xd 1p this week FWIW! |
Acquisition of Northern fuels. PBT is only £0.1m but it does have unrelated costs of £0.6m to strip out plus when integrated into the group margin expansion should be achieved. |
cfro
Do you have a link please? |
Terrific IMC meeting this afternoon.
Was interesting to hear that their main site at Wardle that they own free-hold is on the books for £20m but worth double that in the open market.. |
Hy results were out on Monday and gave a bit of a mixed picture , with an in-line theme for FY. Maybe the worst is behind NWF now and a slow share price recovery can continue? |
TY, Santangello. But not really a "penny stock"! |
 From fool.uk:
'By Christopher Ruane.
As a shareholder in NWF (LSE: NWF), I have scratched my head at the penny stock’s dismal 2024 performance. Does the market just not see the value I do? Might it see a value trap?
Yielding over 5% and with a price-to-earnings ratio of 8, the shares look like a bargain to me. It has a proven business model selling products to an established customer base. Competition is limited.
Yes, the profit margins are thin: NWF made less than £10m last year on sales of £951m. So, risks like oil price volatility are significant ones for the company.
But while the margins are thin, this is a consistently profitable company with a customer base set to keep needing what it sells. NWF’s cash generation supports a generous dividend.
Even after capital expenditure including building a warehouse, it ended its last financial year with net cash of £10m, over a seventh of its current market capitalisation.
Christopher Ruane owns shares in NWF.'
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Following a kind nudge by Jeff H, I hold and continue to add NWF. |
 Looks cheap.
That note has certainly stirred some interest. Clearly they have to perform and hit the numbers, but this is an illiquid sort that could get moving ahead of the next trading update. Could be an acquisition announcement too.
Some decent exchanges today. It looks like someone is in the market mopping up in size at 154p and some buyers have noted that. So these buyers must believe the forecasts will be met and the price will get re-rated.
Do you know when you've stuck a share on the watchlist, but haven't had chance to get around to looking at it properly.....and then.... this type of action starts....where you're sat looking at the trades and chart and thinking....could I miss out on at least a short term opportunity here?
Well I have bought a speculative position on that basis.
Exit if goes stale and farts about here. That should then give time to look at it.
Hopefully nobody bids it up ha
Clearly if they hit their forecasts next year, then it should get re-rated...surely?
If it goes stale, probably just wait for the next update. Maybe it just goes 155p-160p and they hold it there if there is no buying on top of this bout - not sure.
It is that quiet time of the year too.
All imo
DYOR |
Cfro. What makes you think they have had interest in them? |
I am not surprised the broker is saying "buy" and highlighting the value here.
Looking out to 2026 this is on a PE of a little over 7 with a dividend yield of 5.5%. Net cash is forecast to be £15.7m by then. This is way below their historic average which is more like a PE of ten, so just too cheap even for a slow-growth boring old distributor ..
If the valuation stays this cheap for too long it would never surprise me if there wasn't a bid for them. I think they have had interest in them in the past so you never know. |
a buy from citywire |
The TU seemed reasonable to me
So sticking with them |
'IHT on farms to pay for the NHS'
'only 500 farms likely to be caught every year'
so, if each of the affected were to pay £1m, which is a figure that's probably too high, then that would raise £500m, scarcely enough to fund the NHS for 17hrs?
therefore a politically motivated attack on landowners and property....aim to fund public sector pay rises to keep those workers sweet, voting for a Labour admin at the next election |
seems the numerous labour MPs representing rural constituencies for the first time ever are hearing plenty of discontent from their constituents; the IHT raid in the budget has gone down worse than any other single measure including the raid on pensions.
would be surprised if the gov't changed its approach on the farming IHT, sadly. |
There are many ways around the problem like split-ownership (as mentioned above) also selling off parts (to pay IHT) and becoming more efficient with a smaller farm.
Where i live any smaller farms that come onto the market are instantly snapped-up by either much larger corporate farmers or the entrepeneurial farmer with ambitions to grow.
This gov IHT decision will make no difference to NWF in fact i hear there are protests planned by the farmers so it may well get over-turned. |
think you may be right but the competition to buy farms or forests that come on the market and there may well be more of them, could be less so capital values may decline? |
adverse impact of budget will be farms being divided into smaller and smaller units over time as in Ireland North and South, less economically efficient units with adverse impact on the rural economy. How the farmers of rural constituencies including nw Norfolk and Cambridgeshire constituencies must regret the election of a Labour gov't. |
Tipped in IC this week suggesting the worst is behind NWF.
Mind you that didn't mention the IHT rule change which is clearly going to give farming a kick. |
Small director buy. (Seems a good price entry point to make a maiden purchase). |
XD next week 7.1p |
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