NWF Group PLC Trading Update and Acquisition (5453K)
22 December 2022 - 6:00PM
UK Regulatory
TIDMNWF
RNS Number : 5453K
NWF Group PLC
22 December 2022
For release 7.00am Thursday 22 December 2022
NWF Group plc
NWF Group plc: Trading Update and Fuels acquisition
NWF Group plc ('NWF' the 'Company' or the 'Group'), the
specialist distributor of fuel, food and feed across the UK , today
provides a trading update for the six months ended 30 November 2022
(the "Period") and announces the acquisition of Sweetfuels
Limited.
Trading update
The Board is pleased to report that trading in the first half
has been strong. The Group's overall results for the Period were
ahead of the prior year, with all three divisions trading ahead of
the Board's expectations.
Fuels:
Performance in the Period has been delivered by strong margins
offsetting lower year-on-year volumes. Warmer than usual weather
over the Autumn months saw reduced consumption of heating oil, as
well as some deferral of purchases in response to the increased
cost. Oil prices have remained very volatile, with Brent Crude
starting the Period at $114 per barrel and ending at $83 per
barrel.
Food:
Trading has continued to be strong, with good storage capacity
utilisation and continued improvements in operating efficiency.
Demand from customers has been stable and service levels have
remained high.
Feeds:
Performance momentum has remained very encouraging. Whilst
volumes were a little lower than the prior year as a result of good
Autumn grazing conditions, farmers have been focused on optimising
feed rations to benefit from a very positive milk price in the
Period. Commodity prices remained volatile across the first half
and the business has been effective in passing through inflationary
cost increases.
Outlook
The Group has made a strong start to the current financial year,
with the seasonally more material winter months to come. As such
the Board's full year expectations are unchanged at this stage,
save for the anticipated contribution from the Sweetfuels
acquisition, as set out below.
The first half has built on the strong performance in the prior
year and we continue to have confidence in the Group's prospects.
We also continue to target strategic development opportunities
supported by our strong balance sheet and banking facilities.
Acquisition
NWF is pleased to announce the acquisition of Sweetfuels Limited
("Sweetfuels" or the "Acquisition") for a cash consideration of
GBP10.0 million on a debt and cash free basis.
Sweetfuels is a 20 million litre fuel distributor based in
Faringdon, Oxfordshire, supplying fuel to predominantly domestic
customers across the Cotswolds. The Acquisition further expands and
infills NWF's geographic coverage of its Fuels business within the
UK and is aligned to the Group's development strategy of
consolidating the highly fragmented fuels market whilst expanding
its existing geographical footprint. The acquisition is expected to
be immediately earnings enhancing to the Group.
The Group will implement its proven post-acquisition integration
plan, retaining the local brand and customer facing parts of the
business whilst centralising suppport services. In the 12 months to
31 August 2021, Sweetfuels generated EBITDA of GBP1.3 million,
profit before tax of GBP1.2 million and had net assets of GBP2.8
million.
The total consideration is GBP14.3 million which includes GBP4.3
million of adjustments for surplus cash and normalised working
capital. The net consideration is therefore GBP10.0 million which
will be funded from the Group's existing financial resources. The
Group reported net cash of GBP9.0m (excluding IFRS16 lease
liabilities) as at its financial year ended 31 May 2022, together
with substantial bank facilities to fund investment in its
development opportunities.
Richard Whiting, Chief Executive of NWF Group plc,
commented:
"We are delighted with our performance in the first half and to
announce the acquisition of Sweetfuels which adds a 26(th) depot to
our UK footprint in an attractive new geography for NWF. We have a
strong platform for continued growth as we leverage the benefits
from the further expansion of our growing network.
"The industry remains highly fragmented, with many small
operators, which provides us with further opportunities to
consolidate the market and increase our market share. Our pipeline
of acquisition prospects remains healthy and this remains a focus
for our development activity."
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 / Catherine
Executive Chapman Mike Bell / Ed Allsopp
Chris Belsham, Group Finance
Director
NWF Group plc MHP Peel Hunt LLP
(Nominated Adviser
and broker)
Tel: 01829 260 260 Tel: 020 3128 8339 Tel: 020 7418 8900
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