Wynnstay reports trading loss at Just for Pets

Agriculture services supplier Wynnstay Group PLC reported this week that interim profits declined due to a trading loss at the Just for Pets business, although revenues rose and it increased its dividend.

For the six months ended April 30, profit before tax fell to GBP130,000 from GBP4.0 million in the same period the previous year, due to an impairment charge of GBP3.9 million attributed to Just for Pets.

Wynnstay said that performance of Just for Pets stores, which sells supplies for pet owners, was "subdued" in the period and resulted in a loss, but that the business "remains a relatively small part of the group" compared to its core agricultural activities. The company is reviewing options for Just for Pets and said it will implement restructuring measures in the second half of the financial year.

Group revenue rose to GBP205.3 million from GBP193.2 million, which Wynnstay said was partly due to higher commodity prices after three years of sustained deflation.

Net assets at the end of April was unchanged from last year at GBP85.0 million.

The company declared an interim dividend of 4.20 pence per share, up from 4.0p.

"The recovery in farmgate prices drove an improvement in demand for many agricultural inputs over the winter period. Wynnstay’s agriculture-related activities, including Wynnstay Stores, have benefited as a result over the first half and show year-on-year progress," Chief Executive Ken Greetham said.

"However, the trading loss at our Just for Pets chain has impacted the group's overall results and, given this unit's performance, we have recognised a non-cash goodwill and investment impairment charge and are restructuring the operations and reviewing our options for the business," he said.

Greetham said that looking forward, the company is "encouraged by the improvement in farmgate prices for our farmer customers but believe that the rate of recovery for the agricultural supply sector will remain tempered.

Nonetheless, Wynnstay is well-positioned to continue its organic and acquisitive growth strategy. The breadth of the group's activities and strong balance sheet provide a solid foundation for further development over the coming years."

Shares in Wynnstay were up 1.2% to 575.50p on Wednesday.