TIDMNWF
RNS Number : 8259M
NWF Group PLC
05 February 2009
Embargoed until: 0700, 05 February 2009
NWF Group plc
('NWF' or 'the Group')
Interim results for the half year ended 30 November 2008
NWF Group plc, the specialist distribution business, today announces its interim
results for the half year ended 30 November 2008.
Commenting on the results, Mark Hudson, Chairman, said: 'NWF has made a strong
start to the year during a period of significant price volatility in key raw
materials and against an increasingly challenging economic backdrop. The
disposal of the Garden Centre division was successfully completed enabling the
Group to focus on its three specialist distribution businesses. All three
businesses have outperformed the same period last year and these results
represent a record first half operating profit1 for the Group.'
Financial highlights:
+-----------------------------------------------------------------------------+
| * Revenue1 increased by 21.8% to GBP198.1 million (H1 2007: GBP162.6 |
| million) |
+-----------------------------------------------------------------------------+
| * Operating profit1 up 68.2% to GBP3.7 million (H1 2007: GBP2.2 million) |
+-----------------------------------------------------------------------------+
| * Profit before taxation1 up 12.5% to GBP1.8 million (H1 2007: GBP1.6 |
| million) |
+-----------------------------------------------------------------------------+
| * Headline earnings per share1, 2 up 21.7% to 2.8p (H1 2007: 2.3p) |
+-----------------------------------------------------------------------------+
| * Interim dividend per share unchanged at 1.0p (H1 2007: 1.0p) |
+-----------------------------------------------------------------------------+
| * Net debt reduced since year end by GBP22.4 million to GBP29.7 million |
| (31 May 2008: GBP52.1 million) |
+-----------------------------------------------------------------------------+
| * Gearing reduced significantly to 120% (31 May 2008: 171%) |
+-----------------------------------------------------------------------------+
1 From continuing operations only, excluding Garden Centres; H1 2007 figures
restated.
2 Excluding GBP1.3 million (H1 2007: GBPNil) exceptional deferred tax charge
arising from the phased withdrawal of industrial buildings allowances.
Operational highlights:
ˇDistribution - revenue during the period increased by 30.6% to GBP20.5 million
(H1 2007: GBP15.7 million) as the remaining additional capacity in Wardle was
fully utilised. Operating profit increased by 100.0% to GBP1.0 million (H1 2007:
GBP0.5 million) after charging a GBP0.3 million non-recurring cost associated
with the successful exit from the leased warehouse at Winsford.
ˇFeeds - revenue increased by 19.9% to GBP49.4 million (H1 2007: GBP41.2
million) as raw material price volatility continued during the period. Operating
profit increased by 16.7% to GBP1.4 million (H1 2007: GBP1.2 million) as a
result of a strengthened sales force and effective purchasing.
ˇFuels - revenue increased by 21.3% to GBP128.2 million (H1 2007: GBP105.7
million) as a result of oil prices reaching record levels in August 2008. The
business has performed very strongly with operating profit up 160.0% to GBP1.3
million (H1 2007: GBP0.5 million) resulting from a number of key factors
including managing margin particularly effectively in a market with volatile oil
prices.
On the outlook for the coming six months Mark Hudson added: 'Trading continues
to be strong with the Group well positioned in reasonably robust markets and
with a capable experienced management team. Effective measures are in place for
tracking business performance and the Group is very aware of the economic
challenges. I am pleased to report that since the period end we continue to
trade in line with expectations, with all three divisions continuing to
demonstrate improved performance ahead of prior year.'
For further information please visit www.nwf.co.uk or contact:
+------------------------+--+------------------------+--+------------------------+
| Richard Whiting, Chief | | John West/ | | Mark Taylor/ |
| Executive | | Andrew Dunn | | Ben Johnston |
| Paul Grundy, Finance | | Tavistock | | Charles Stanley |
| Director | | Communications | | Securities |
| NWF Group plc | | | | (Nominated Adviser) |
+------------------------+--+------------------------+--+------------------------+
| Tel: 01829 260 260 | | Tel: 020 7920 3150 | | Tel: 020 7149 6000 |
+------------------------+--+------------------------+--+------------------------+
CHAIRMAN'S STATEMENT
NWF has made a strong start to the year during a period of significant price
volatility in key raw materials and against an increasingly challenging economic
backdrop. The disposal of the Garden Centre division was successfully completed
enabling the Group to focus on its three specialist distribution businesses. All
three businesses have outperformed the same period last year and these results
represent a record first half operating profit1 for the Group.
We continue to focus on cash management and net debt was reduced during the
period by GBP22.4 million from the end of the prior year to GBP29.7 million (31
May 2008: GBP52.1 million). We operate in reasonably robust markets and have
capable experienced management teams focused on both profit and cash generation.
Results
The strong operating performance is reflected in an increase in revenue1 for the
half year ended 30 November 2008 of 21.8% to GBP198.1 million (H1 2007: GBP162.6
million). Operating profit1 was up GBP1.5 million at GBP3.7 million (H1 2007:
GBP2.2 million). Profit before taxation1 was higher at GBP1.8 million (H1 2007:
GBP1.6 million).
The disposal of Garden Centres and the subsequent reduction in debt resulted in
the decision to terminate certain interest rate hedging instruments in December
2008 at a total cost of GBP0.7 million. At 30 November 2008, non-recurring fair
value losses charged to the income statement in respect of these instruments
were GBP0.6 million, which are included within net finance costs of GBP1.9
million. Profit before taxation1 before this non-recurring charge increased by
50.0% to GBP2.4 million (H1 2007: GBP1.6 million).
Basic earnings per share1 were Nil p (H1 2007: 2.3p). Headline earnings per
share1,2 were up 21.7% to 2.8p (H1 2007: 2.3p).
The loss after taxation from Garden Centres, including the trading loss for the
four month period from 31 May 2008 to 2 October 2008, was GBP3.8 million.
The focus on cash management and reductions in key raw material prices resulted
in a working capital net cash outflow during the period of only GBP0.1 million
(H1 2007: GBP8.5 million outflow). This, together with lower capital expenditure
of GBP2.3 million (H1 2007: GBP4.8 million) and the net proceeds from the
disposal of Garden Centres of GBP13.0 million (H1 2007: GBPNil), resulted in a
net cash inflow before financing of GBP13.4 million (H1 2007: GBP13.3 million
outflow). Net debt at the period end reduced to GBP29.7 million (31 May 2008:
GBP52.1 million) and gearing decreased significantly to 120% (31 May 2008:
171%).
Net assets at 30 November 2008 decreased by 16.8% to GBP24.8 million (H1 2007:
GBP29.8 million) as a result of the disposal of Garden Centres and an
exceptional deferred tax charge of GBP1.3 million arising from the phased
withdrawal of industrial buildings allowances.
1 From continuing operations only, excluding Garden Centres; H1 2007 figures
restated.
2 Excluding GBP1.3 million (H1 2007: GBPNil) exceptional deferred tax charge
arising from the phased withdrawal of industrial buildings allowances.
Dividend
Notwithstanding the focus on cash management, the Board has approved an
unchanged interim dividend per share of 1.0p (H1 2007: 1.0p). This will be paid
on 1 May 2009 to shareholders on the register on 27 March 2009. The shares will
trade ex-dividend on 25 March 2009.
Operations
Distribution
Revenue during the period increased by 30.6% to GBP20.5 million (H1 2007:
GBP15.7 million) as the remaining additional capacity in Wardle was fully
utilised. Operating profit increased by 100.0% to GBP1.0 million (H1 2007:
GBP0.5 million) after charging a GBP0.3 million non-recurring cost associated
with the successful exit from the leased warehouse at Winsford. The business now
has activities concentrated on two sites. Storage capacity was reached in August
and the business has since maintained fill at approximately 95% capacity.
The management team has been strengthened to continue the improvements already
seen in operating efficiency with service levels (measured as cases delivered in
full on the correct day) now at 99.5%. Demand and shipments to retailers remain
robust despite the economic uncertainty, with some product and customer mix
changes including an increase in own label sales. The re-pack operation has been
particularly busy during the period with a strong performance ahead of plan.
Feeds
Revenue increased by 19.9% to GBP49.4 million (H1 2007: GBP41.2 million),
predominantly due to raw material price volatility, which continued during the
period. Volume reduced by 7% to 213,000 tonnes as demand from customers reduced
in line with milk output which is significantly below the national quota.
Operating profit increased by 16.7% to GBP1.4 million (H1 2007: GBP1.2 million)
as a result of a strengthened sales force and effective purchasing.
Margin management has been critical in procuring raw materials which have shown
significant price volatility and as a result of currency changes on US dollar
based commodities. Forward purchase contracts are used to reduce the impact of
volatility on prices charged to customers. The division continues to focus on
operating efficiencies and has launched an added value product range under the
Ultra Soy brand which contains a high level of digestible undegradable protein
that can increase milk yield.
Fuels
Revenue increased by 21.3% to GBP128.2 million (H1 2007: GBP105.7 million) as a
result of oil prices reaching record levels in August 2008. The business has
performed very strongly with operating profit up 160.0% to GBP1.3 million (H1
2007: GBP0.5 million). Volume fell by 1% to 167 million litres, with most depots
achieving higher levels of business but retail petrol stations experiencing less
demand in the period.
The significant increase in operating profit resulted from a range of factors.
These are principally: a focused business managing margins effectively in a
market with falling oil prices; new business initiatives in the Midlands and
North West; some competitor disorganisation as acquisitions are integrated;
shortages of kerosene which benefited our storage depots; an improved tanker
fleet which increased operating efficiency; and lastly a cold start to the
winter.
Garden Centres (discontinued operations)
Prior to 31 May 2008, the Board had made the decision to dispose of the Garden
Centre division of the Group to focus on its specialist distribution activities
and strengthen the balance sheet.
On 2 October 2008, the Group completed the disposal of the division for gross
proceeds of GBP14.5 million utilising the net amount to reduce debt as
previously announced. The loss after taxation from this discontinued operation
was GBP3.8 million, which included a GBP0.7 million trading loss for the four
month period from 31 May 2008 to 2 October 2008.
Board changes
As previously announced Johnathan Ford will assume the role of Group Finance
Director and joins the Group on 16 March 2009. Paul Grundy will be leaving the
Group to pursue new opportunities following a handover during March and April. I
would like to take this opportunity to thank Paul for his contribution to the
successful development of the Group over the last five years and wish him well
for the future.
Performance Share Plan
The Group is implementing a new Performance Share Plan ('the Plan') for senior
executives, which has been developed in line with ABI guidelines. The Plan is a
discretionary scheme which has been established for the purpose of incentivising
and retaining the Company's eligible executive management. Ordinary shares
awarded under the Plan are subject to a performance criteria that requires the
Group to meet a minimum reported basic earnings per share target over a three
year period. The Remuneration Committee has responsibility for determining the
award of ordinary shares and the performance targets under the Plan. It is
anticipated that the award of shares under the Plan will be satisfied from
ordinary shares acquired by the NWF Group Plc Employee Benefit Trust.
Outlook and future prospects
Trading continues to be strong with the Group well positioned in reasonably
robust markets and with a capable experienced management team. Effective
measures are in place for tracking business performance and the Group is very
aware of the economic challenges. I am pleased to report that since the period
end we continue to trade in line with expectations, with all three divisions
continuing to demonstrate improved performance ahead of prior year. I look
forward to updating shareholders later this year.
Mark Hudson
Chairman
5 February 2009
NWF GROUP PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
+------------+----------+----------+----------+----------+----------+----------+----------+
| | Half year ended | Half year ended | Year ended |
+-----------------------+---------------------+---------------------+---------------------+
| | 30 Nov 2008 | 30 Nov 2007 | 31 May 2008 |
+-----------------------+---------------------+---------------------+---------------------+
| | GBPm | GBPm | GBPm |
| | | (Restated) | |
+-----------------------+---------------------+---------------------+---------------------+
| Continuing | | | |
| operations: | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Revenue (note 3) | 198.1 | 162.6 | 361.2 |
+-----------------------+---------------------+---------------------+---------------------+
| Operating expenses | (194.4) | (160.4) | (355.4) |
+-----------------------+---------------------+---------------------+---------------------+
| Operating | 3.7 | 2.2 | 5.8 |
| profit (note 3) | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Net finance costs: | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Fair value | (0.6) | - | 0.1 |
| (losses)/gains on | | | |
| interest rate | | | |
| hedging instruments | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Other net finance | (1.3) | (0.6) | (1.7) |
| costs | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | (1.9) | (0.6) | (1.6) |
+-----------------------+---------------------+---------------------+---------------------+
| Profit before | 1.8 | 1.6 | 4.2 |
| taxation | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Income tax expense | (1.8) | (0.5) | (1.4) |
| including | | | |
| exceptional | | | |
| deferred tax charge | | | |
| (note 5) | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Profit for the | 1.3 | 1.1 | 2.8 |
| period before | | | |
| exceptional | | | |
| deferred tax charge | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Exceptional | (1.3) | - | - |
| deferred tax charge | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Profit for the | - | 1.1 | 2.8 |
| period from | | | |
| continuing | | | |
| operations | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Discontinued | | | |
| operations (note | | | |
| 4): | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Loss for the period | (3.8) | (0.5) | (0.3) |
| from discontinued | | | |
| operations | | | |
+-----------------------+---------------------+---------------------+---------------------+
| (Loss)/profit for | (3.8) | 0.6 | 2.5 |
| the period | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | | | |
+-----------------------+---------------------+---------------------+---------------------+
| | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Earnings/(loss) per | | | |
| share (note 6): | | | |
+-----------------------+---------------------+---------------------+---------------------+
| From continuing | | | |
| operations | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Basic | Nil p | 2.3p | 6.0p |
| and | | | |
| diluted | | | |
+-----------------------+---------------------+---------------------+---------------------+
| From continuing and | | | |
| discontinued | | | |
| operations | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Basic | (8.1)p | 1.2p | 5.3p |
| and | | | |
| diluted | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Headline earnings | | | |
| per share from | | | |
| continuing | | | |
| operations | | | |
+-----------------------+---------------------+---------------------+---------------------+
| Basic | 2.8 p | 2.3p | 6.0p |
| and | | | |
| diluted | | | |
+------------+----------+----------+----------+----------+----------+----------+----------+
NWF GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
FOR THE
HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
+---------------------------------------+------------+------------+------------+
| | Half year | Half year | Year ended |
| | ended | ended | |
+---------------------------------------+------------+------------+------------+
| | 30 Nov | 30 Nov | 31 May |
| | 2008 | 2007 | 2008 |
+---------------------------------------+------------+------------+------------+
| | GBPm | GBPm | GBPm |
+---------------------------------------+------------+------------+------------+
| Actuarial loss on defined benefit | - | - | (1.1) |
| pension scheme | | | |
+---------------------------------------+------------+------------+------------+
| Decrease in fair value of interest | (0.7) | - | - |
| rate hedging instrument | | | |
+---------------------------------------+------------+------------+------------+
| Taxation on items taken directly to | 0.2 | - | 0.3 |
| equity | | | |
+---------------------------------------+------------+------------+------------+
| Net expense recognised directly in | (0.5) | - | (0.8) |
| equity | | | |
+---------------------------------------+------------+------------+------------+
| (Loss)/profit for the period | (3.8) | 0.6 | 2.5 |
+---------------------------------------+------------+------------+------------+
| Total recognised (expense)/income for | (4.3) | 0.6 | 1.7 |
| the period | | | |
+---------------------------------------+------------+------------+------------+
NWF GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 NOVEMBER 2008 (UNAUDITED)
+----------+----------+----------+----------+----------+----------+----------+----------+
| | 30 Nov 2008 | 30 Nov 2007 | 31 May 2008 |
+---------------------+---------------------+---------------------+---------------------+
| | GBPm | GBPm | GBPm |
+---------------------+---------------------+---------------------+---------------------+
| Assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| Non-current assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| Property, plant and | 37.6 | 57.0 | 37.6 |
| equipment | | | |
+---------------------+---------------------+---------------------+---------------------+
| Intangible assets | 5.4 | 10.2 | 5.5 |
+---------------------+---------------------+---------------------+---------------------+
| Deferred income tax | 1.2 | 1.0 | 1.2 |
| assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| | 44.2 | 68.2 | 44.3 |
+---------------------+---------------------+---------------------+---------------------+
| Current assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| Inventories | 4.7 | 9.6 | 4.6 |
+---------------------+---------------------+---------------------+---------------------+
| Trade and other | 53.5 | 47.9 | 51.4 |
| receivables | | | |
+---------------------+---------------------+---------------------+---------------------+
| Derivative | 0.4 | 1.7 | 0.9 |
| financial | | | |
| instruments | | | |
+---------------------+---------------------+---------------------+---------------------+
| Cash and cash | - | 0.1 | - |
| equivalents | | | |
+---------------------+---------------------+---------------------+---------------------+
| Assets held for | - | - | 30.4 |
| sale | | | |
+---------------------+---------------------+---------------------+---------------------+
| | 58.6 | 59.3 | 87.3 |
+---------------------+---------------------+---------------------+---------------------+
| Total assets | 102.8 | 127.5 | 131.6 |
+---------------------+---------------------+---------------------+---------------------+
| Liabilities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Current liabilities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Trade and other | (38.7) | (37.1) | (36.8) |
| payables | | | |
+---------------------+---------------------+---------------------+---------------------+
| Current income tax | (0.7) | (0.4) | - |
| liabilities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Borrowings | (9.2) | (24.2) | (4.9) |
+---------------------+---------------------+---------------------+---------------------+
| Derivative | (1.8) | (1.3) | (0.6) |
| financial | | | |
| instruments | | | |
+---------------------+---------------------+---------------------+---------------------+
| Liabilities | - | - | (15.1) |
| directly associated | | | |
| with assets | | | |
| classified as held | | | |
| for sale | | | |
+---------------------+---------------------+---------------------+---------------------+
| | (50.4) | (63.0) | (57.4) |
+---------------------+---------------------+---------------------+---------------------+
| Non-current | | | |
| liabilities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Borrowings | (20.5) | (29.9) | (37.1) |
+---------------------+---------------------+---------------------+---------------------+
| Deferred income tax | (3.0) | (1.4) | (2.2) |
| liabilities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Retirement benefit | (4.1) | (3.4) | (4.4) |
| obligations | | | |
+---------------------+---------------------+---------------------+---------------------+
| | (27.6) | (34.7) | (43.7) |
+---------------------+---------------------+---------------------+---------------------+
| Total liabilities | (78.0) | (97.7) | (101.1) |
+---------------------+---------------------+---------------------+---------------------+
| Net assets | 24.8 | 29.8 | 30.5 |
+---------------------+---------------------+---------------------+---------------------+
| Shareholders' | | | |
| equity (note 7) | | | |
+---------------------+---------------------+---------------------+---------------------+
| Share capital | 11.7 | 11.7 | 11.7 |
+---------------------+---------------------+---------------------+---------------------+
| Other reserves | (0.5) | - | - |
+---------------------+---------------------+---------------------+---------------------+
| Retained earnings | 13.6 | 18.1 | 18.8 |
+---------------------+---------------------+---------------------+---------------------+
| Total shareholders' | 24.8 | 29.8 | 30.5 |
| equity | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+
NWF GROUP PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
+----------+----------+----------+----------+----------+----------+----------+----------+
| | Half year ended | Half year ended | Year ended |
+---------------------+---------------------+---------------------+---------------------+
| | 30 Nov 2008 | 30 Nov 2007 | 31 May 2008 |
+---------------------+---------------------+---------------------+---------------------+
| | GBPm | GBPm | GBPm |
+---------------------+---------------------+---------------------+---------------------+
| Cash flows from | | | |
| operating | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Operating profit | 3.6 | 2.1 | 6.8 |
+---------------------+---------------------+---------------------+---------------------+
| Adjustments for: | | | |
+---------------------+---------------------+---------------------+---------------------+
| Depreciation of | 1.7 | 1.9 | 3.7 |
| property, plant and | | | |
| equipment | | | |
+---------------------+---------------------+---------------------+---------------------+
| Other | (0.2) | (0.1) | 0.2 |
+---------------------+---------------------+---------------------+---------------------+
| Operating cash | 5.1 | 3.9 | 10.7 |
| flows before | | | |
| movements in | | | |
| working capital | | | |
+---------------------+---------------------+---------------------+---------------------+
| Movements in | | | |
| working capital: | | | |
+---------------------+---------------------+---------------------+---------------------+
| Increase in | (0.1) | (1.6) | (1.0) |
| inventories | | | |
+---------------------+---------------------+---------------------+---------------------+
| Increase in | (1.5) | (8.2) | (13.0) |
| receivables | | | |
+---------------------+---------------------+---------------------+---------------------+
| Increase in | 1.5 | 1.3 | 7.3 |
| payables | | | |
+---------------------+---------------------+---------------------+---------------------+
| Net cash generated | 5.0 | (4.6) | 4.0 |
| from/(absorbed by) | | | |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| Interest paid | (1.8) | (1.7) | (3.5) |
+---------------------+---------------------+---------------------+---------------------+
| Income tax paid | (0.2) | (0.9) | (1.3) |
+---------------------+---------------------+---------------------+---------------------+
| Net cash generated | 3.0 | (7.2) | (0.8) |
| from/(absorbed by) | | | |
| operating | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Cash flows from | | | |
| investing | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Purchase of | (2.3) | (4.8) | (6.5) |
| property, plant and | | | |
| equipment | | | |
+---------------------+---------------------+---------------------+---------------------+
| Proceeds on sale of | 0.2 | 0.1 | 0.1 |
| property, plant and | | | |
| equipment | | | |
+---------------------+---------------------+---------------------+---------------------+
| Purchase of | - | (0.1) | (0.3) |
| intangible assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| Disposal of | 13.0 | - | - |
| subsidiaries, net | | | |
| of cash disposed of | | | |
| (note 4) | | | |
+---------------------+---------------------+---------------------+---------------------+
| Deferred | (0.5) | (1.3) | (1.3) |
| acquisition | | | |
| payments | | | |
+---------------------+---------------------+---------------------+---------------------+
| Net cash generated | 10.4 | (6.1) | (8.0) |
| from/(absorbed by) | | | |
| investing | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Cash flows from | | | |
| financing | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Proceeds on issue | - | 0.5 | 0.5 |
| of ordinary shares | | | |
+---------------------+---------------------+---------------------+---------------------+
| Proceeds from bank | 1.0 | - | 0.2 |
| borrowings | | | |
+---------------------+---------------------+---------------------+---------------------+
| Bank loan issue | - | - | (0.2) |
| costs | | | |
+---------------------+---------------------+---------------------+---------------------+
| Repayment of | (16.2) | - | - |
| borrowings | | | |
+---------------------+---------------------+---------------------+---------------------+
| New finance leases | 0.1 | - | - |
| and hire purchase | | | |
| agreements | | | |
+---------------------+---------------------+---------------------+---------------------+
| Finance lease and | (0.5) | (0.1) | (0.4) |
| hire purchase | | | |
| payments | | | |
+---------------------+---------------------+---------------------+---------------------+
| Dividends paid to | (1.4) | (1.3) | (1.8) |
| Company's | | | |
| shareholders | | | |
+---------------------+---------------------+---------------------+---------------------+
| Net cash absorbed | (17.0) | (0.9) | (1.7) |
| by financing | | | |
| activities | | | |
+---------------------+---------------------+---------------------+---------------------+
| Net decrease in | (3.6) | (14.2) | (10.5) |
| cash and cash | | | |
| equivalents | | | |
+---------------------+---------------------+---------------------+---------------------+
| Cash and cash | (3.4) | (9.6) | (9.6) |
| equivalents at | | | |
| beginning of period | | | |
+---------------------+---------------------+---------------------+---------------------+
| Non-cash movements | - | - | 16.7 |
+---------------------+---------------------+---------------------+---------------------+
| Cash and cash | (7.0) | (23.8) | (3.4) |
| equivalents at end | | | |
| of period | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE
HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
1. General information
NWF Group plc ('the Company') is a public limited company incorporated and
domiciled in the UK. The principal activities of NWF Group plc and its
subsidiaries (together 'the Group') are the warehousing and distribution of
ambient groceries, the manufacture and sale of animal feeds and the distribution
of fuel oils.
The address of the Company's registered office is NWF Group plc, Wardle,
Nantwich, Cheshire, CW5 6BP.
The Company has its primary listing on the Alternative Investment Market
('AIM') of the London Stock Exchange.
These condensed consolidated interim financial statements ('interim
financial statements') were approved for issue on 5 February 2009.
These interim financial statements do not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The interim
financial statements for the half year ended 30 November 2008 and 30 November
2007 are neither audited nor reviewed by the Company's auditors. Statutory
accounts for the year ended 31 May 2008 were approved by the Board of Directors
on 13 August 2008 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under Section 498 of the
Companies Act 2006.
2. Basis of preparation
These interim financial statements have been prepared in accordance with the
principal accounting policies used in the Company's consolidated financial
statements for the year ended 31 May 2008. They have also been prepared on the
going concern basis under the historical cost convention, as modified by the
revaluation of certain financial instruments.
The International Financial Reporting Standards ('IFRS') and the
International Financial Reporting Interpretations Committee ('IFRIC')
interpretations that will be applicable as at 31 May 2009, including those that
will be applicable on an optional basis, are not known with certainty at the
time of preparing this report. However, no significant differences are expected
between the accounting policies adopted in preparing this report and those that
will be adopted in the financial statements for the year ended 31 May 2009.
These interim financial statements do not fully comply with IAS 34 'Interim
Financial Reporting', as is currently permissible under the rules of AIM.
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
3. Segment information
For management purposes, the Group is currently organised into three main
operating businesses - Distribution, Feeds and Fuels. As described in note 4,
the Group classified the Garden Centres business as a discontinued operation at
31 May 2008 and completed the disposal of the business on 2 October 2008.
In the Directors' opinion, all of the Group's operations are carried out in
the same geographical segment, namely the UK. Segment information about the
above businesses is presented below:
+----------+----------+----------+----------+----------+----------+----------+----------+
| | Half year ended | Half year ended | Year ended |
+---------------------+---------------------+---------------------+---------------------+
| | 30 Nov | 30 Nov | 31 May |
+---------------------+---------------------+---------------------+---------------------+
| | 2008 | 2007 | 2008 |
+---------------------+---------------------+---------------------+---------------------+
| | GBPm | GBPm | GBPm |
| | | (Restated) | |
+---------------------+---------------------+---------------------+---------------------+
| Revenue | | | |
+---------------------+---------------------+---------------------+---------------------+
| Distribution | 20.5 | 15.7 | 32.9 |
+---------------------+---------------------+---------------------+---------------------+
| Feeds | 49.4 | 41.2 | 100.1 |
+---------------------+---------------------+---------------------+---------------------+
| Fuels | 128.2 | 105.7 | 228.2 |
+---------------------+---------------------+---------------------+---------------------+
| | 198.1 | 162.6 | 361.2 |
+---------------------+---------------------+---------------------+---------------------+
| Result | | | |
+---------------------+---------------------+---------------------+---------------------+
| Operating profit: | | | |
+---------------------+---------------------+---------------------+---------------------+
| Distribution* | 1.0 | 0.5 | 0.5 |
+---------------------+---------------------+---------------------+---------------------+
| Feeds | 1.4 | 1.2 | 3.1 |
+---------------------+---------------------+---------------------+---------------------+
| Fuels | 1.3 | 0.5 | 2.2 |
+---------------------+---------------------+---------------------+---------------------+
| | 3.7 | 2.2 | 5.8 |
+---------------------+---------------------+---------------------+---------------------+
| Net finance costs | (1.9) | (0.6) | (1.6) |
+---------------------+---------------------+---------------------+---------------------+
| Profit before | 1.8 | 1.6 | 4.2 |
| taxation | | | |
+---------------------+---------------------+---------------------+---------------------+
| Income tax expense | (1.8) | (0.5) | (1.4) |
| including | | | |
| exceptional | | | |
| deferred tax charge | | | |
| (note 5) | | | |
+---------------------+---------------------+---------------------+---------------------+
| Loss for the period | (3.8) | (0.5) | (0.3) |
| from discontinued | | | |
| operations (note 4) | | | |
+---------------------+---------------------+---------------------+---------------------+
| (Loss)/profit for | (3.8) | 0.6 | 2.5 |
| the period | | | |
+---------------------+---------------------+---------------------+---------------------+
| Net assets | | | |
+---------------------+---------------------+---------------------+---------------------+
| Distribution | 31.5 | 31.1 | 30.5 |
+---------------------+---------------------+---------------------+---------------------+
| Feeds | 19.1 | 20.5 | 19.2 |
+---------------------+---------------------+---------------------+---------------------+
| Fuels | 11.8 | 10.1 | 13.5 |
+---------------------+---------------------+---------------------+---------------------+
| Garden Centres | - | 26.8 | - |
+---------------------+---------------------+---------------------+---------------------+
| Unallocated | (37.6) | (58.7) | (48.0) |
+---------------------+---------------------+---------------------+---------------------+
| Continuing | 24.8 | 29.8 | 15.2 |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| Discontinued | - | - | 15.3 |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| | 24.8 | 29.8 | 30.5 |
+----------+----------+----------+----------+----------+----------+----------+----------+
* Distribution operating profit of GBP1.0 million for the half year ended 30
November 2008 is net of non-recurring operating costs of GBP0.3 million in
respect of the termination of a lease at Winsford, Cheshire.
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
3. Segment information (continued)
Segment net assets consist of property, plant and equipment, intangible assets,
inventories, trade and other receivables less operating liabilities. Unallocated
net assets comprise deferred income tax assets less taxation, borrowings,
retirement benefit obligations and certain derivative financial instruments.
4. Discontinued operations
Prior to 31 May 2008, the Board had resolved to dispose of the Group's Garden
Centre operations and negotiations with several interested parties had taken
place. These operations, which were expected to be sold within twelve months of
the financial year end, were classified as a discontinued operation at 31 May
2008.
On 2 October 2008, the Group completed the disposal of its entire interest
in the ordinary share capital of NWF Retail Holdings Limited, the parent company
of a number of subsidiaries which carried out all of the Garden Centre
operations.
The results of the discontinued operation, which have been included in the
condensed consolidated income statement, were as follows:
+----------+----------+----------+----------+----------+----------+----------+----------+
| | Half year ended | Half year ended | Year ended |
+---------------------+---------------------+---------------------+---------------------+
| | 30 Nov 2008 | 30 Nov 2007 | 31 May 2008 |
+---------------------+---------------------+---------------------+---------------------+
| | GBPm | GBPm | GBPm |
+---------------------+---------------------+---------------------+---------------------+
| Revenue | 6.4 | 10.1 | 21.8 |
+---------------------+---------------------+---------------------+---------------------+
| Expenses | (7.0) | (10.9) | (22.2) |
+---------------------+---------------------+---------------------+---------------------+
| Loss before | (0.6) | (0.8) | (0.4) |
| taxation | | | |
+---------------------+---------------------+---------------------+---------------------+
| Income tax expense | (0.1) | 0.3 | 0.1 |
+---------------------+---------------------+---------------------+---------------------+
| Loss after taxation | (0.7) | (0.5) | (0.3) |
| from discontinued | | | |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| Loss before | (3.0) | - | - |
| taxation on | | | |
| disposal of | | | |
| discontinued | | | |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| Income tax expense | (0.1) | - | - |
+---------------------+---------------------+---------------------+---------------------+
| Loss after taxation | (3.1) | - | - |
| on disposal of | | | |
| discontinued | | | |
| operations | | | |
+---------------------+---------------------+---------------------+---------------------+
| Loss for the period | (3.8) | (0.5) | (0.3) |
| from discontinued | | | |
| operations | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+
The effect of discontinued operations on segment results is shown in note 3.
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
5. Income tax expense
In July 2008, the phasing out of industrial buildings allowances was
substantially enacted into law. This has resulted in an exceptional increase in
deferred tax liabilities and a related income statement charge of GBP1.3 million
in these interim financial statements, based on estimates for the full year.
The income tax expense for the half year ended 30 November 2008 is based upon
the estimated effective tax rate for the full year ended 31 May 2009 of 31.2%,
before the inclusion of the impact of the withdrawal of industrial buildings
allowances.
6. Earnings/(loss) per share
From continuing operations
The calculation of basic earnings per share from continuing operations for the
half year ended 30 November 2008 is based on profit after taxation of GBPNil (H1
2007: GBP1.1 million) and on 46.9 million (H1 2007: 46.9 million) ordinary
shares, representing the weighted average number of shares in issue during the
period.
From continuing and discontinued operations
The calculation of basic earnings per share from continuing and discontinued
operations for the half year ended 30 November 2008 is based on loss after
taxation of GBP3.8 million (H1 2007: profit of GBP0.6 million) and on 46.9
million (H1 2007: 46.9 million) ordinary shares, representing the weighted
average number of shares in issue during the period.
Headline from continuing operations
The calculation of basic headline earnings per share from continuing operations
for the half year ended 30 November 2008 is based on profit before exceptional
deferred tax charge of GBP1.3 million (H1 2007: GBP1.1 million) and on 46.9
million (H1 2007: 46.9 million) ordinary shares, representing the weighted
average number of shares in issue during the period.
The calculations of diluted earnings per share are based on the figures
shown above amended for the weighted average dilutive effect (65,000 shares) of
share options outstanding in the period (H1 2007: Nil).
The numbers of shares stated above in respect of H1 2007 have been adjusted to
take into account the effect of the bonus issue of shares (4 for 1) on 4 October
2007 (see note 7 below).
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
7. Shareholders' funds and statement of changes in equity
+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| | Ordinary | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| | share | Share | Other | Retained | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| | capital | premium | reserves | earnings | Total |
+---------------+---------------+---------------+---------------+---------------+---------------+
| | GBPm | GBPm | GBPm | GBPm | GBPm |
+---------------+---------------+---------------+---------------+---------------+---------------+
| At 1 June | 2.3 | 6.2 | 0.3 | 21.3 | 30.1 |
| 2007 | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Profit for | - | - | - | 0.6 | 0.6 |
| the period | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Dividend paid | - | - | - | (1.3) | (1.3) |
| to | | | | | |
| shareholders | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Ordinary | - | 0.4 | - | - | 0.4 |
| shares issued | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Bonus issue | 9.4 | (6.6) | (0.3) | (2.5) | - |
| of shares | | | | | |
| (see below) | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| At 30 | 11.7 | - | - | 18.1 | 29.8 |
| November 2007 | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Profit for | - | - | - | 1.9 | 1.9 |
| the period | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Dividend paid | - | - | - | (0.5) | (0.5) |
| to | | | | | |
| shareholders | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Actuarial | - | - | - | (1.0) | (1.0) |
| loss on | | | | | |
| defined | | | | | |
| benefit | | | | | |
| pension | | | | | |
| scheme | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Taxation on | - | - | - | 0.3 | 0.3 |
| items taken | | | | | |
| directly to | | | | | |
| equity | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| At 31 May | 11.7 | - | - | 18.8 | 30.5 |
| 2008 | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Loss for the | - | - | - | (3.8) | (3.8) |
| period | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Dividend paid | - | - | - | (1.4) | (1.4) |
| to | | | | | |
| shareholders | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Decrease in | - | - | (0.7) | - | (0.7) |
| fair value of | | | | | |
| interest rate | | | | | |
| hedging | | | | | |
| instrument | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| Taxation on | - | - | 0.2 | - | 0.2 |
| items taken | | | | | |
| directly to | | | | | |
| equity | | | | | |
+---------------+---------------+---------------+---------------+---------------+---------------+
| At 30 | 11.7 | - | (0.5) | 13.6 | 24.8 |
| November 2008 | | | | | |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+-------+
On 4 October 2007, the Company's shareholders approved a bonus issue of four new
ordinary shares of 25 pence each ('new ordinary shares') for each existing
ordinary share held by a shareholder on the share register at the close of
business on 4 October 2007. This resulted in the issue of 37.5 million new
ordinary shares with a total nominal value of GBP9.4 million. In order to effect
the bonus issue, GBP9.4 million was capitalised from reserves, comprising GBP6.6
million from Share Premium, GBP0.3 million from Other Reserves and GBP2.5
million from Retained Earnings.
8. Interim report
Copies of this interim report are due to be sent to shareholders on 10 February
2009. Further copies may be obtained from the Company Secretary at NWF Group
plc, Wardle, Nantwich, Cheshire, CW5 6BP, or from the Company's website at
www.nwf.co.uk.
NWF GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
FOR THE HALF YEAR ENDED 30 NOVEMBER 2008 (UNAUDITED)
9. 2009 financial calendar
+---------------------------------------+---------------------------------------+
| Interim dividend paid | 1 May 2009 |
+---------------------------------------+---------------------------------------+
| Financial year end | 31 May 2009 |
+---------------------------------------+---------------------------------------+
| Preliminary announcement of full year | Mid August 2009 |
| results | |
+---------------------------------------+---------------------------------------+
| Publication of annual report and | Early September 2009 |
| accounts | |
+---------------------------------------+---------------------------------------+
| Annual General Meeting | 24 September 2009 |
+---------------------------------------+---------------------------------------+
| Final dividend paid | 2 November 2009 |
+---------------------------------------+---------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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