Agricultural supplies group Wynnstay said its trading is significantly ahead of market expectations.
The Alternative Investment Market and Powys-based firm said this year’s early UK harvest has benefitted its grain trading volumes, which are much higher than in recent years.
Wynnstay said early cereal seed sales in the last few weeks have been encouraging and outlook for the group’s arable performance is positive due to attractive commodity prices and successful planting conditions. Its current financial year is to the end of October.
Read more: Welsh firms face challenging future as forecasters predict a recession for the UK
It said demand for feed is “unseasonally strong”. This mainly reflects the reduced availability of forage following the hot summer, but is also supported by higher milk prices, which has encouraged demand.
The company has also made further gains in fertiliser activity created from rising and volatile raw material prices. Continued price increase, particularly from ammonium nitrate, have also increased trading results across all the group’s fertiliser activities.
The recent record prices for natural gas have caused European fertiliser manufacturers to announce temporary production suspensions. The UK’s only manufacturer of ammonium nitrate, CF Industries, recently announced the permanent closure of its Cheshire plant and the temporary suspension of ammonia production at its Billingham plant.
These are causing further upward pressure on fertiliser prices with available urea products are increasing by around 10% in the last two weeks, Wynnstay said. While these market conditions will temper demand, they have also generated further stock gains for its Glasson business, the firm said.
Sign up to the BusinessLive Wales newsletter and follow us on LinkedInAs well as an in-depth early morning newsletter, we will be sending out regular breaking news email alerts. To sign up to this service CLICK HERE
And, follow us on LinkedIn to catch the latest stories and to network with the Welsh business community.
Wynnstay published its half year results – for the six months to the end of April this year – earlier this year. The Alternative Investment Market firm posted pre-tax profit of £9.56m – up 78% from £5.36m on the previous year.
Revenue rose by 34% to £335.66m from 2021 figures of £249.71m. However, Wynnstay estimated that price inflation accounted for around £80m of this overall increase in revenue.
At the time, the firm was overall positive on its trading outlook and said it was well-positioned to achieve growth prospects for the full year. However, it said it does not expect these exceptional gains to be repeated in the second half.
Looking ahead, the firm said its management is now highly conscious of inflationary pressures which will increase costs for the business, farmers and consumers.
It added that, due to the uncertain economic climate, the board believes it is prudent, at this stage, to leave its expectations for the next financial year unchanged.
Read more:
“Protect the economy, businesses and people’s livelihoods” Welsh business leaders tell new PM Liz Truss The man in charge of Britain’s biggest energy port Wales’ first exotic animal vet practice opens following six-figure backing Trading confidence in Wales tumbles as cost of doing business crisis takes holdNew coding academy launched to address FinTech skills gap in Wales
