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NWF Group^ (NWF, Hold at 167p) - Strategic progress to continue
NWF Group plc
NWF Group^ (NWF, Hold at 170p) - FY25A a year of strategic progress
NWF, the specialist distribution business, made good progress both strategically and operationally in FY25. Fuels volumes were stable, and margins were up. Food activity benefited from the opening of the new site. Within Feeds, volumes were higher than the prior year, and margins were expanding. As a consequence, EBIT increased from £14.2m in FY24 to £16.3m in FY25 (PL estimate £16.3m). We continue to expect further earnings growth in FY26 – driven by a full year benefit of recent Fuels M&A and further operational gains within Food. In terms of financial liquidity, the business continues to have a net cash position. Despite this solid earnings profile and healthy balance sheet, the shares are trading on a P/E of 8x. This is at the bottom of the groups long-term trading range (8x-14x).
Another solid year of profit improvement and strategic progress from NWF despite some operational challenges. A strong pipeline of fuel acquisition continues to develop. The shares are trading on an attractive May 2026E PE of 8.6x and a 5.3% yield. We reiterate our Buy rating and 250p TP.
NWF, the specialist distribution business, has confirmed that trading in FY25 was slightly ahead of expectations and we are raising our full year PBT estimate from £11.5m to £12.8m (+12% upgrade). Fuels volumes were stable, and margins were up. Food activity is benefiting from the opening of the new site. However, pallet storage and volume progression within Food is a little slower than previously expected. Within Feeds, volumes are higher than the prior year, and full year margins are better than we had expected. Even after spending £11m on M&A in the period, NWF ended the year with £6m of net cash (pre-IFRS16 basis). This is £5m better than we had expected. Given the strategic and operational momentum within the business and with earnings set to benefit from medium-term expansion in Fuels and Food, we anticipate that the shares will move higher, and we are maintaining our target price of 283p.
NWF is well positioned, given the cash on the balance sheet and resilient end markets. The shares are trading on a FY26E PE of c.9x, EV/EBITDA of c.3.2x, and dividend yield of 5.5%, in our view offering an attractive entry point. We reiterate our Buy rating and 250p TP.
NWF Group^ (NWF, Hold at 173p) - Fuels acquisition, +7% to FY26F adj. dil EPS
It is encouraging to see acquisitions resume after a period of hiatus, due to strong market conditions for operators. NWF is well positioned for more, given the cash on the balance sheet. The shares are trading on c.10x FY25E PE, c.4x EV/EBITDA, and a dividend yield of c.5%, offering an attractive entry point, in our view. We reiterate our Buy rating and 250p TP.
NWF, the specialist distribution business, has acquired Northern Energy Oil Ltd for £8.3m. The transaction extends NWF’s Fuel distribution network in the North-East of England, a geography in which the business was previously underweight. We estimate the deal will add >£1m of EBIT and anticipate that the deal is 5% earnings per share accretive in FY26 and 6% earnings per share accretive in FY27. Management has indicated that the M&A pipeline in Fuels “remains active.” Given the healthy FCF of the group, the strong balance sheet, and comfortable headroom on its banking facilities, this pipeline can be financed from internal resources.
NWF Group^ (NWF, Hold at 156p) - HY25A, FY25F unchanged
NWF, the specialist distribution business, has issued a trading in line set of interim results (covering the six months to Nov-24). Fuels volumes are stable, and margins are up. Food activity is benefiting from the opening of the new site. Within Feeds, volumes are higher than the prior year, and margins are stable. Therefore, ahead of the important second half, we continue to expect group EBIT to increase from £14.2m (FY24A) to £16.0m (FY25E). We expect a similar uplift in FY26. In terms of financial liquidity, the business continues to have a net cash position. Despite this solid earnings profile and healthy balance sheet, the shares are trading on a P/E of 8x. This is at the bottom of the groups long-term trading range (8x-14x).
NWF is well positioned, given the cash on the balance sheet and resilient end markets. The shares are trading on a FY25E PE of c.9x, EV/EBITDA of c.3x, and dividend yield of over 5%, in our view offering an attractive entry point. We reiterate our Buy rating and 250p TP.
NWF Group^ (NWF, Hold at 155p) - In line trading update– FY25F unchanged
NWF, the specialist distribution business, has issued a trading in line pre close update (covering the six months to Nov-24). Fuels volumes are stable, and margins are up. Food activity is benefiting from the opening of Lymedale, though certain mobilisation costs have been higher than expected, with some customer throughput lower elsewhere. Within Feeds, volumes are higher than the prior year, and margins are stable. Therefore, ahead of the important second half, we continue to expect full year EBIT increases from £14.2m (FY24A) to £16.0m (FY25E). We expect a similar profit uplift in FY26. Despite this solid earnings profile the shares are trading at the bottom of the groups long-term trading range (8x-14x). Therefore, we see the current valuation as an attractive entry-point for investors and we re-iterate our BUY recommendation.
NWF is well positioned, given the cash on the balance sheet and resilient end markets. The shares are trading on PE of c.9x, EV/EBITDA of c.3x and dividend yield of over 5%, offering an attractive entry point. We reiterate Buy, TP 250p.
The recent AGM, NWF confirmed that the group was trading in line with expectations and each of the three business units were making good progress. Following the update, we met up with management (via Teams) to discuss progress across the business. We were particularly pleased to hear that the new Food warehouse at Lymedale is performing well. The early phase of the racking was completed in April, with initial deliveries commencing in May. The warehouse is approaching optimal capacity. Given the positive roll-out we are confident that the Food business revenue increases from £71 in FY23 to £101m in FY26 and EBIT jumps from £4.2m in FY23 to £7.1m in FY26. Despite this progress the forward P/E is 29% below its long-term average. Therefore, we reiterate our 283p target price.
NWF Group^ (NWF, Hold at 159p) - FY25F unchanged
The cash balance remains strong, which provides material firepower for acquisitions in Fuels, where there is a strong pipeline. The shares are trading on what we see as an attractive PE of 9.2x to May 2025E and yield of 5.2%. We reiterate Buy, TP 250p.
NWF Group^ (NWF, Hold at 165p) - FY25F in line with expectations
NWF Group^ (NWF, Hold at 168p) - FY24A, FY25F unchanged
The Food division continues to build momentum and the cash balance remains strong, providing material firepower for acquisitions in Fuels, with a strong pipeline developing as fuel prices find a normal level. The shares are trading on an attractive May 2025E PE of 9.6x and yield of 5%. We reiterate Buy, TP 250p.
In each of the groups three business units, Fuel, Food and Feeds, NWF represents an important intermediary between wholesale participants and retail clients. As a consequence, NWF has well established positions within specialist protected segments of resilient end markets. Meanwhile, management has continued to build on already strong client relationships and enhance operational efficiencies. This is reflected in sustained long-term earnings growth and cash generation.
NWF Group^ (NWF, Hold at 192p) - FY24F in line
The full year pre close update from NWF shows a resilient performance from Food, with activity levels up 6%. As expected, Fuels experienced a lower contribution from domestic customers and a normalisation of margins. Feeds saw lower volumes due to ideal weather for grazing livestock. Overall, we see group EBIT broadly in line with our FY24 estimates. Food: The ongoing progression of the business continues. Peak pallet volumes were up 16% and average throughput up 6% (FY24 vs FY23). The new warehouse at Lymedale is coming on stream to plan, with 20,000 pallet spaces already operational. Meanwhile, the customer pipeline is strong, providing comfort for future activity levels. Consequently, we see EBIT trending ahead of previous estimates. We expect business unit profits of £5.8m in FY25, up from £4.2m in FY23 and £2.8m in FY22. Fuels: Despite the warm winter, volumes were up FY24 vs FY23. This uplift was driven by increased Commercial activity. As expected, profit per litre continued to moderate, following elevated levels seen during the pandemic and the period of supply chain disruption. We now expect business unit profit of £7.8m in FY24. Whilst this is down from £12.9m in FY23, it compares favourably with a FY15-FY19 average of £5.0m. Feeds: Over the period, volumes in have softened due to ideal grazing conditions for livestock. We now expect business unit profit to be £2.6m in FY24. Whilst this is down from FY23 levels, it is 6.7% above the five-year average. Forecasts: Overall, we see FY24 EBIT broadly in line with our previous forecasts and FY25 EBIT a little lower (due to a lower assumed contribution from Feeds and Fuels). Meanwhile, we have re-assessed our IFRS-16 EBIT forecasts for FY24 and FY25. FY24 is broadly in line. However, due the phasing of (non-cash) lease interest we now expect this will result in financing costs of £4.6m (including pension interest). Well supported dividend: The strong free cash flow and strong balance sheet has enabled the company to deliver a consistent expansion in the dividend. The pay-out has increased every year for over a decade (7.8p FY23 vs 4.5p FY12, +5.1% CAGR). Therefore, we believe the 4.4% prospective dividend yield underpins the shares and we reiterate our positive stance on the stock.
Encouragingly, momentum in Food has continued and the company has cash at YE, providing firepower for fuel acquisitions. On our new numbers, the shares are trading on 11x May 2025E PE and provide a dividend yield of 4.4%. We reduce our TP to 250p to reflect our new forecasts. Buy.
NWF Group^ (NWF, Hold at 200p) - FY24F unchanged - H2 weighting
NWF Group^ (NWF, Hold at 228p) - HY – FY24F unchanged
Interim results demonstrate that NWF, the specialist distributor, delivered a decent performance in 1H24. Within the mix, Food increased divisional EBIT by +38%. As expected, Fuel and Feeds experienced a normalisation of earnings. Overall, the group is on target to generate £12.4m of PBT in FY24 and we are maintaining our full forecasts. Fuels (71% of group profits, three-year average): After an exceptional performance in FY22, divisional EBIT is normalizing. During 1H24, supply conditions have remained stable, and volumes have increased year-on-year (driven by commercial and M&A). However, a warm autumn has limited demand for heating oil, reducing the pence profit per litre from 0.87p (1H23) to 0.21p (1H24). Given the seasonality in the business we expect the full year pence profit per litre will be 1.27p. This is +13.4% higher than the pre Covid five-year average. Food (16% of group profits, three-year average): Storage volumes recently peaked at 141,000 pallets, this compares to an FY23 average of 122,000 pallets. The Crewe and Wardle sites have a capacity of 135,000 pallet spaces, with the remaining volume provided via third party overflow storage. This progression is a deliberate element of the division’s expansion plans, providing the comfort for management to add a third warehouse to the network (announced 10 January). Feeds (13% of group profits, three-year average): In 1H24, the Feeds division experienced a normalizing of margins compared to the significantly elevated levels seen in 1H23. As seen elsewhere in the sector, Feeds volumes were down in the autumn. This reflects the warm and wet weather, which have provided “good grazing conditions” for farmers. Headline financials: It is important to remember that the group’s earnings are seasonal in nature, with 73% of earnings typically delivered in the second half (based on 10-year EBIT averages). Whilst underlying EBIT decreased from £6.8m (1H23) to £4.0m (1H24), it is +48% higher than the five-year average generated before the pandemic. Overall, trading in the first half provides increasing confidence for the full year outturn. During 1H24 net cash only reduced by £3.0m, with strong cash conversion offsetting growth investment. Conclusion: NWF is well placed to deliver our full year forecasts and we continue to expect FY24 PBT of £12.4m.
NWF Group plc NWF Group plc
The Food division continues to build momentum and the cash balance is building, providing material fire power for acquisitions in Fuels with a strong pipeline developing as fuel prices find a normal level. The shares are trading on an attractive PE of 12x to May 2024E and yield 3.5%.
NWF Group^ (NWF, Hold at 215p) - Food warehouse expansion
NWF remains well positioned in our view given the cash on the balance sheet and resilient end-markets. The shares are trading on an attractive level at 11.1x PE, 5.1x EV/EBITDA and a dividend yield of close to 4%. We reiterate our Buy rating and 275p TP.
NWF, the specialist distributor has confirmed that it has secured a third warehousing facility in Lymedale Business Park (near Stoke-on-Trent) for its Food business. The project adds 39% to its warehousing capacity, with incremental volume expected to principally come from pre-existing clients. The project will involve an £8.5m capex fit-out investment and is expected to deliver a 20% IRR. We anticipate in its first full year of operation (i.e. FY26) the warehouse will deliver a headline PBT of £1.2m. This represents an 8.0% upgrade to group EPS. Low risk project, with an expected IRR of 20%: Given the financial success of the Crewe project and strong client demand, the Food business has a signed a long-term lease for additional warehousing space. The 332,000 sq ft site in Newcastle-under-Lyme, which is located close to the M6 and the businesses existing warehousing, extends pallet capacity by 39%. The project is expected to require a cash investment of £8.5m and is projected to deliver an IRR of circa 20%. Crucially, most incremental revenue is expected to come from existing clients, who are looking to distribute a higher volume through NWF. Forecasts: Prior to the Lymedale announcement, we had assumed that Food EBIT is broadly flat FY24 vs FY23. We now expect EBIT to contract from £4.2m (FY23) to £2.3m (FY24). The project is expected to be earnings neutral in the first year (i.e. FY25). We anticipate it will add £1.2m to group PBT in FY26. This represents an 8.0% upgrade to FY26E EPS (post-IFRS-16 basis). Dividend yield attractive: Over the last seven years, NWF’s three businesses have delivered an average free cash flow of £10.4m. This average represents an 8.5% FCF yield. Moreover, across this period cash generation has been trending higher. This cash generation, combined with the strong balance sheet, underpins the dividend pay-out. Crucially, the pay-out has increased every year for 11 years, delivering a 5.1% CAGR over the period. Therefore, we believe the near 4% prospective dividend yield underpins the shares and we reiterate our positive stance on the stock.
NWF is well positioned given the cash on the balance sheet and resilient end markets. Our forecasts already include a normalisation in the Fuels and Feed segments after the recent elevated performance. The shares are trading on an attractive level with a PE of <10x, EV/EBITDA of <4x and a dividend yield of close to 4%. We reiterate our Buy rating and 275p TP.
NWF, the specialist distributor of fuel, food and feed, has issued a trading update. As expected, the Fuel and Feed divisions are trading behind the prior year as market conditions normalise whilst the Food division is trading strongly. Ahead of the important winter months, where most of the profits are generated, we are leaving our full year profit forecasts unchanged. Fuels (71% of group profits, three-year average): During 1Q24, supply conditions have remained stable, volumes have increased year-on-year. After an exceptional performance in FY22, we continue to expect divisional EBIT to normalise (reducing from £17m in FY22 to £9m in FY24). A warm autumn has limited demand for heating oil. As highlighted at the FY23 results, the Board continues to pursue acquisition opportunities in Fuels. The timing and scale of any potential deal is uncertain, though history shows that the team is disciplined in how they structure and price transactions. Food (16% of group profits, three-year average): Storage volumes recently peaked at >140,000 pallets, this compares to an FY23 average of 122,000 pallets. The Crewe and Wardle sites have a capacity of 135,000 pallet spaces, with the remaining volume provided via third party overflow storage. This progression is a deliberate element of the division’s expansion plans, providing the comfort for management to add a third warehouse to the network. Feeds (13% of group profits, three-year average): As seen elsewhere in the sector, Feeds volumes were down in the autumn. This reflects the warm and wet weather. Dividend yield attractive: Over the last seven years, NWF’s three divisions have delivered an average free cash flow of £10.4m. This average represents an 8.5% FCF yield. Moreover, across this period cash generation has been trending higher. This cash generation, combined with the strong balance sheet, underpins the dividend pay-out. Crucially, the pay-out has increased every year for 11 years, delivering a 5.1% CAGR over the period. Therefore, we believe the 4% prospective dividend yield underpins the shares and we reiterate our positive stance on the stock.
NWF, the specialist distributor of fuel, food and feed, has issued a positive trading update. All three divisions are trading in-line with expectations, providing increased comfort for the full year outturn. Therefore, ahead of the important winter months, where most of the profits are generated, we are leaving our full year profit forecasts unchanged.
NWF Group^ (NWF, Hold at 214p) - Q1 - FY24F unchanged
NWF is well positioned, given the cash on the balance sheet and resilient end markets. Our forecasts already include a normalisation in the Fuels segment, after the elevated performance over the last two years. The shares have retreated to an attractive level, with a PE of c.10x, EV/EBITDA of 4x and dividend yield of close to 4%. Buy, TP 275p.
NWF Group^ (NWF, Hold at 245p) - FFF continues to deliver
NWF Group^ (NWF, Hold at 265p) - FY23A; FY24F upgrades and CEO to retire
Initial Equity Trading Comments - 1 August 2023
NWF ANP WEIR GRG TPK SCT SGE HSBA BAG IPF SBRY TSCO DSCV RS1 KYYWY
NWF has enjoyed a strong year across all three of its division, and this performance has translated into a strong cash balance that should fuel future growth. We maintain our Buy rating and 275p target price.
NWF, the specialist distributor of fuel, ambient food and animal feed, delivered an impressive performance in FY23. In the period, all three divisions provided healthy performances and pre-tax profits were the second highest ever (£19.3m, which was £0.7m ahead of our expectations). Crucially, the path to further earnings growth is clear. M&A activity within the Fuel division is moving higher and the Food division is looking to open a third warehouse.
Initial Equity Trading Comments - 19 July 2023
NWF RTN HRGLF
NWF Group^ (NWF, Hold at 263p) - Fuels acquisition
NWF Group^ (NWF, Hold at 258p) - c.10% adj. PBT upgrade.
Trading well – The company has performed well across all three divisions and this has translated into a marked improvement in the balance sheet.
NWF, the specialist distributor of fuel, ambient food, and animal feed, has issued a positive pre-close update. All three divisions delivered healthy performances in the seasonally important second half. As a consequence, management has confirmed that FY23 PBT “is now anticipated to be ahead of the current market expectations and in excess of £19.0m” (or >£18.6m according to our earnings definition). This represents a 9% outperformance vs our previous forecasts (published in March) and 60% ahead of our FY23 forecasts published this time (June) last year.
Trading well – we are not surprised that trading is ahead of expectations, but the scale of beat is surprising. All 3 divisions are performing well, which gives confidence in the longer-term outlook. We have increased our target price from 253p to 275p to reflect the upgrade.
NWF, the specialist distributor of fuel, ambient food, and animal feed, has issued an unscheduled update indicating the “trading in all three divisions has continued to be strong”. Overall, the positive divisional trends seen in the first half have been maintained. Consequently, the Board now anticipates the profits will be “significantly ahead of market expectations” and we are raising our FY23 PBT forecasts from £11.9m to £17.1m.
NWF has had a strong 1H and 2H has started well, giving confidence in full year numbers. We expect a step-up in the rate of acquisitions in Fuels, with the recent purchase of Sweetfuels providing an ideal template. In addition, there is potential for expansion in Foods and the Feeds division has materially improved margins. The shares are trading on an attractive PE of 11.5x to May 2023E and yield 3.5%.
NWF, the specialist distributor of fuel, ambient food and animal feed, has delivered a solid first half. All three divisions are performing well. Pre-tax profits were up +44% to £6.2m. The Group has traded well since the period end, maintaining “encouraging momentum into the seasonally busier second half”. At this stage we are leaving our full year PBT forecasts unchanged (having raised them in December) but see the risks comfortably on the upside.
NWF, the specialist distributor of fuel, food and feed, has issued a solid first half pre-close update and completed an acquisition. All three divisions are trading well, providing increased comfort for the full year’s outturn. Meanwhile, NWF has announced the acquisition of Sweetfuels, which enhances the geographic footprint of the Fuels network. We estimate this will add £1.5m EBIT to FY24 earnings. After interest, we are upgrading our FY24 PBT by 7%.
This was a positive update from NWF, with an encouraging trading performance combined with an acquisition that is right in the company’s sweet spot. We expect this to be the template going forwards, and the pipeline is healthy. We increase our target price from 245p to 253p to reflect the higher earnings.
Strong share price performance The shares have performed particularly well and are +32% YTD. As the share price has moved past our target price, we are moving our recommendation to Hold. NWF should prove resilient in the economic downturn, given that the company operates in large, stable markets. Next news will be the 1H update in early December. We expect the company to report a good 1H performance in all three divisions. Margins in Fuel have been helpful, which is more than offsetting a reduction in volumes. Food has traded ahead of expectations with storage capacity almost fully utilised and further improvements in operating efficiencies. Feed has continued to show good recovery as strong milk prices have helped to support price increases and thus margins. The strong operating performance is translating into a healthy net cash position (pre FRS16), which provides firepower for the company to deliver on its strategy to make infill acquisitions in the Fuel segment. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
Issuer Sponsored BRANDSHIELD SYSTEMS+ (BRSD, House Stock, 9p) – Interims confirm impressive scaleup continues with ARR up 71% CRESCHIC+ (LOAD, House Stock at 266p) - Fourth upgrade adds 25% to earnings HELIOS UNDERWRITING+ (HUW, House Stock, 158p) – H1 FY22 results: lots of moving parts, outlook remains positive I(X) NET ZERO+ (IX., House Stock at 22p) – Interim Results UNION JACK OIL+ (UJO, 31.5p, House Stock) – PEDL183 competent person’s report does not disappoint ORCADIAN ENERGY+ (ORCA, 34p, House Stock) – Board changes FTSE 100 HARGREAVES LANSDOWN^ (HL., Hold, 885p) – Picking up pennies in front of the roller? NEXT^ (NXT, Hold at 5324p) – Interim results show a 2% downgrade to FY guidance FTSE 250 AJ BELL^ (AJB, Buy, 275p) – Cross at loss of boss MITCHELLS & BUTLERS^ (MAB, Hold at 135p) – Q4 update; solid trading but costs continue to weigh FTSE All share NWF GROUP^ (NWF, Hold at 233p) – AGM update; FY23F unchanged
NWF MAB BRSD ORCA UJO NXT LOAD HUW IXNZF HRGLF
NWF, the specialist distributor of fuel, food and feed, has issued a strong trading update covering the seasonally quiet first quarter of the year. All three divisions are trading well, providing increased comfort for the full year outturn. However, ahead of the important winter months, where the majority of the profits are generated, we are leaving our full year profit forecasts unchanged.
AGM statement – strong start Following excellent results last year, NWF has started FY23 positively. All three divisions are ahead of the company’s expectations. However, we make no changes to forecasts given the importance of the winter period. The shares are trading on 12.6x PE and a 3.3% yield to May 2023E. We maintain our Buy recommendation and 245p target price. We expect a further update in December when the company should have a better understanding of the full-year impact. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, performed strongly in FY22, enabling management to deliver a string of profit upgrades. The uptick in earnings was principally driven by an exceptional performance within Fuels (especially in 2H22). Across the whole of FY22 Foods delivered on the upside (through operational efficiencies) and Feeds staged a strong profit recovery in the second half (through improved gross margins). FY23 has started to plan, and we are leaving our earnings forecasts unchanged.
An exceptional year Full year profits rose by 76% to £20.9m and were slightly ahead of expectations. This performance was driven largely by the exceptional performance in Fuels, which benefited from the volatility in oil prices and a supply-constrained market. Our forecasts for the current year are based on a return to a ‘normal’ market. However, there is a lasting benefit in the transformed balance sheet, which gives far greater scope to grow through acquisition in Fuels, where there is a strong pipeline. We increase our target price to 245p to reflect the improvement. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com 2-pages
NWF, the specialist distributor of fuel, food and feed, enjoyed stronger than expected momentum during the second half and in the four months following the interim results (in February) management delivered three profit upgrades. Unsurprisingly, the full year pre-close update confirms the healthy uptick in group profits, driven by a record year in Fuels. Therefore, we maintain our FY22 group PBT forecast of £20.1m, up +74% vs FY21.
Positive full-year update The company confirmed that numbers should be in line with our expectations, after a number of upgrades through the year, and expects full-year profits to be c.70% higher than the prior year. This is largely due to the heightened level of price volatility in fuel combined with insecurity of supply, which we assume will not repeat in future years. Nonetheless, we are increasing our FY23E forecasts by c.3% to reflect improving margins. There has also been a stronger cash performance. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
Yet another upgrade The company has stated that profits will be significantly ahead of expectations, which is the third upgrade in the last two months. This is largely due to the Fuel business, which has continued to benefit from the very significant short-term volatility in oil prices and a supply-constrained market for Fuel. As a result, we are upgrading our FY22E forecast by £3.2m to £20.5m, an increase of 18%. The shares are trading on 11x PE and a yield of 3.8% to May 2023E. We reiterate our Buy recommendation and 235p TP. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, continues to enjoy stronger than expected momentum. In a third unscheduled trading update since the interim results in February, management has confirmed that the Fuel division continues to outperform and trading in the final quarter has been “materially stronger than anticipated”. As a consequence, we are raising our FY22 PBT estimate from £16.5m to £20.1m (+22% upgrade).
NWF, the specialist distributor of fuel, food and feed, continues to enjoy stronger than expected momentum. In a second unscheduled trading update this month, management has confirmed that the Fuel division continues to outperform and “the Board now anticipates full year results will be significantly ahead of the revised expectations”. As a consequence, we are raising our FY22 PBT estimate from £12.5m to £16.5m (+32% upgrade).
Exceptional short-term profit The company stated that profits will be significantly ahead of expectations, a mere three weeks after the last upgrade! The Fuel business has benefited from the very significant short-term volatility in oil prices and a supply-constrained market for Fuel. As a result we are upgrading our FY22E forecast by £4m, or 30%. This means that profit per litre in the current year should be c.2p, which compares to the 1p we use in our long-term forecasts. The higher profit translates into higher cash flow and we now expect the company to be in net cash at yearend. We are leaving 2023E unchanged for now, but see potential for upside. NWF has a balanced, defensive business model, which should be well placed to manage a tougher economic climate. The shares are trading on 12.3x PE and a yield of 3.4% to May 2023E. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
Positive trading update NWF has stated that trading has continued to be strong since the end of 1H. The company has continued to see elevated demand in the Fuels segment, which was helped by the volatility in the oil price. Food has performed as planned and Feed has benefited from the recovery of cost inflation. As a result, we are increasing our 2022E PBT by 18%. We are leaving 2023E unchanged for now, but see potential for upside. NWF has a balanced, defensive business model, which should be well placed to manage a tougher economic climate. The shares are trading on 9.6x PE and a yield of 3.5% to May 2022E. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, continues to enjoy solid operational momentum. In an unscheduled trading update, management has confirmed that with “demand conditions in the Fuels business accelerating” full-year group profits “will be significantly ahead of the Board’s previous expectations”. Consequently, we are raising our FY22 PBT estimate from £10.5m to £12.5m (representing a 19.7% upgrade).
Strong 1H and encouraging start to 2H 1H headline PBT increased 72% to £4.3m, with strong performances from Fuels and Food more than offsetting a tough period in Feed. The company has also stated that it has continued to trade well since period end. We are not changing our forecasts at this stage given the normal 2H weighting, but this gives confidence in the full-year outlook. There was also a material reduction in net debt, which should reduce further in 2H. The shares continue to look good value to us given the sensible rating and attractive yield. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, has delivered a solid first half performance, with headline PBT up +72% to £4.3m. Within the mix, Fuels and Food are performing well, with good first half momentum being maintained ahead of the seasonally busy third quarter.
Strong 1H performance The trading update states that the underlying results for 1H will be significantly ahead of last year, with strong performances from Fuels and Food more than offsetting weaker trading in Feed. We forecast 1H EBIT to be +c.40% to £4.2m. We are not changing our forecasts at this stage given the normal 2H weighting, but this gives confidence in the full-year outlook. In addition, net debt is well below the prior year. The shares continue to look good value given the sensible rating and attractive yield. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, has issued a solid pre-close update. Fuels and Food are performing well, with good first half momentum being maintained ahead of the seasonally busy third quarter.
NWF, the specialist distributor of fuel, food and feed, has issued a trading in-line AGM update. Overall, the Food division is trading marginally ahead of expectations, Fuels in line and Feeds marginally behind.
AGM update as expected Trading YTD date is ahead of the prior year and consistent with the company’s full-year expectations, albeit 1Q is the quietest period of the year, as the summer is the low period for both Fuel and Feed. By division, Food is ahead of expectations, given strong demand and improving operating efficiencies. Fuel has performed as expected, with higher levels of demand. Feed has seen a weaker performance, due to lower volumes in the quiet summer period. Importantly, the company has not been affected by the general shortage of HGV drivers, and has passed on higher wages in the Food segment to customers. The company’s focus on recruiting permanent drivers, ensuring a high level of retention and reducing reliance on agency staff, is clearly paying dividends. The shares are on an attractive rating of 10x PE and 4% yield to May 2022E. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF, the specialist distributor of fuel, food and feed, delivered an impressive performance in FY21, with earnings ahead of pre-pandemic expectations. PBT of £11.5m was 8% ahead of our forecast. This outperformance was principally driven by higher-than-expected earnings within the fuel division. The final dividend of 6.2p delivers a full-year pay-out of 7.2p per share.
Building the acquisition pipeline Full year results were slightly ahead of expectations and well ahead of pre-pandemic forecasts. The company should benefit from more home working in Fuels, the Food division has delivered a strong 2H and margins are recovering in Feed. After a pause due to the pandemic, the pipeline of acquisitions in Fuels has been rebuilt, which should accelerate performance. We retain our current forecasts, but see upside potential to our numbers. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com 3-page note
NWF, the specialist distributor of fuel, food and feed, delivered a better than expected performance during 2H21 and management has announced FY21 profits are now expected to be "ahead" of market forecasts. The outperformance was due to both Fuels (volume and mix) and Food (operational efficiencies). As a consequence, we are raising our FY21 PBT estimates from £10.4m to £11.0m.
Trading ahead of expectations NWF has issued a full-year trading update, which stated that profits will be ahead of expectations, with both Fuels and Food ahead of forecasts. We are upgrading our 2021E by 7%, but are not changing our 2022E at this stage. The improved profits and cash management also resulted in net debt coming in materially lower than expected. We are increasing our target price from 230p to 235p to reflect the lower debt levels. The shares are good value on a PE of 11x to May 2022E and a yield of 3.5%. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
Resilient 1H Profits for 1H were in line with our expectations at £2.5m and we make no changes to our full-year forecast. 1H typically accounts for c.25% of full-year profits and we expect a similar mix this year. The company has resumed its strategy of looking to grow through acquisitions in the Fuel space and we expect to hear of progress in this area in due course. In the meantime, the business should see a positive trend in heating fuel due to cold weather and ongoing lockdown restrictions. The shares continue to look good value on 11x PE and a 3.6% yield to May 2021. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
Solid H1 Profits for H1 will be in line with expectations and we make no changes to our full-year forecast. H1 typically accounts for c.25% of full-year profits and we expect a similar mix this year. The company has also confirmed that there was no material impact on the trading or commercial performance of the business from the cyber incident in November. Charles.Hall@peelhunt.com, Andrew.Ford@peelhunt.com
NWF Group (‘NWF’) issued a COVID-19 trading statement on 29th April 2020. Despite the disruption caused by the recent outbreak, NWF has remained fully operational across all divisions as its products/services are deemed essential to its customers. During March and April, NWF has seen both demand for its products/services and activity levels increase as customers stocked up on heating oil and ambient groceries. The extreme fall in oil prices over recent weeks has meant that the Fuels division has been a significant beneficiary. The volatility in oil prices has also allowed the Group to attain higher profit margins given the wider spread whilst also benefiting from a change in the product mix (i.e. a demand shift from commercial to domestic). Consequently, the Board now anticipates FY2020F to be “significantly ahead” of FY2019A. Thus, we upgrade our FY2020F adj. PBT by c17% to £11.5m which gives an adj. diluted EPS of 18.7p (+c17%). At this stage, no guidance has been given for FY2021F, but we assume FY2020F performance will not be repeated (i.e. no positive flow through into FY2021F). Thus, we leave our FY2021F forecasts unchanged. We retain our Hold recommendation, using FY2021F as our base year for valuation (PER c11x at the current price is fair value in our opinion) given it represents a normalised pattern of trading.
NWF Group ('NWF'), the distributor of fuel, food and feed across the UK, today has issued its interim results to 30 November 2019. The results follow on from the trading update in December, so the business remains on track to meet the Board’s and our full year expectations. Thus, we leave our FY2020F forecasts unchanged. We forecast FY2020F operating profit, adj. PBT and adj. diluted EPS of £10.5m, £9.8m and 16p respectively. NWF trades on a FY2020F PER of 11.3x and an EV/EBITDA ratio of 6.8x and a dividend yield of 3.8%. At this moment, we see NWF’s valuation as fair at present (the norm average of the sector between 12-13x). That said, we believe the company has a strong management team and is in a good position following prior and continued investment across the business.
NWF Group (‘NWF’), the specialist distributor of fuel, food and feed across the UK, reported full-year results for its year ended 31st May 2019 on 30th July. Overall the Group performed well across all three divisions which resulted in strong results that were ahead of original market expectations but behind the record prior-year given the one-off beneficial weather conditions. NWF looks to be in a good place at the moment, in our view with well-invested operations alongside a robust balance sheet and an enhanced focus on consolidating a fragmented fuels market. In this note, we provide our updated financial expectations which adjusts for IFRS16, although a minimal net impact on underlying financials. Despite shares trading on FY2020F PER of 10.5x and an EV/EBITDA ratio of 5.9x with a dividend yield of 4.1%, at present, we see no catalyst for shares to rerate in the short term. We retain our Hold recommendation.
UK-focused specialist agricultural and distribution business NWF Group (NWF LN) has released results for the year ended 31 May 2018 (FY 2018).
NWF Group : Interim results
UK specialist agricultural and distribution business NWF Group (NWF LN) has announced a trading update for the six months ended 30 November 2017 (H1 2018). Trading in-line with expectations, with PBT ahead of the prior year. Net debt lower YoY. Results for the half year ended 30 November 2017 to be released on 30 January 2018.
NWF, the specialist agriculture and distribution business, has issued a trading in-line AGM update. The overall tone of the update shows a similar picture to that discussed at the FY17 results, with Feeds “robust” and Fuels “solid”. Food trading in-line, focusing on business development. With each of the three divisions performing to plan, we are leaving our FY18 forecasts unchanged (PBT £8.3m +5.4% YoY growth, EPS 13.6p +5.1% YoY growth).
Full year result from NWF highlights the benefits of diversification and once again proves the cash generative nature of the three divisions. Given earlier updates there are no operational surprises. Food and Fuel earnings were strong, reflecting increased activity levels in Food and higher volumes in Fuel. Feeds earnings were down. This was entirely due to trading early in 1H17, 2H16 vs 2H17 earnings were flat. Overall, group EBIT was £9.0m vs £8.7m (in-line with PG forecasts). Whilst the free cash flow of £5.2m is down on the five year average, underlying cash generation remains strong and the shares offer investors a 7.5% FCF yield. This underpins the >4% dividend yield and highlights NWFs ability to fund expansion through internally generated funds.
UK-focused specialist agricultural and distribution business NWF Group (NWF LN) has released results for the year ended 31 May 2017 (FY 2017).
NWF, the specialist distributor of feed, food and fuel, has issued an in-line preclose trading update (covering the 12 months to May-17). Within the mix, food and fuel delivered a strong performance, off-setting squeezed margins within feeds. As a consequence, we anticipate underlying PBT will increase from £7.6m in FY16 to £7.8m FY17E. Over the last quarter the shares have retreated on concerns that higher commodity prices will impact on earnings. Today’s announcement confirms that once again, NWF is delivering on expectations. Moreover, given the strong cash generation the shares are trading on a forward free cash flow yield of 10% (FY18E).
Over the last few years, an increasing amount of media coverage has been devoted to sugar, and, more specifically, the apparent negative impact on human health caused by its excess consumption.
NWF ANP RE/ CMET GNS
NWF Group: H1 2017 Results
NWF, the specialist distributor of feed, food and fuel, has issued interim results for the six months to Nov-16. As expected, warmer weather and lower milk prices are affecting volumes within Feeds and Fuels. Soft commodity prices (e.g. soya) are temporarily squeezing margins within Feeds. Offsetting these trends, Food enjoyed a +10% increase in loads. In addition, recent acquisitions are performing as expected. NWF appears to be delivering steady and (importantly) consistent growth in the business. Moreover, the business continues to deliver cash, with post capex cash flow averaging £6.6m over the last five years.
NWF, the specialist distributor of feed, food and fuel, has issued an in-line trading update. As expected, warmer weather and lower milk prices are affecting volumes within Feeds and Fuels. Soft commodity prices (e.g. soya) are temporarily squeezing margins within Feeds. Offsetting these trends, Food enjoyed a +5% increase in loads. In addition, recent acquisitions are performing as expected. NWF appears to be delivering steady and (importantly) consistent growth in the business. Moreover, the business continues to deliver cash, with post capex cash flow averaging £6.6m over the last five years.
NWF H1 Trading Update
Ultimate Products—The Telegraph reports Jim McCarthy, former chief of Poundland has been appointed Chairman of Ultimate Products ahead of a £100m listing in H1 2017. Ultimate Products owns the Beldray cleaning brand and the licence to sell Russell Hobbs and Salter electrical products in the UK.
NWF HZM COS BAGR THRU ATYM MLVN PPIX TSG SZX1
UK specialist agricultural and distribution business, NWF Group (NWF LN), has released a trading update for Q1 (June - August), ahead of its AGM later today. Feeds: Volumes impacted by low milk prices; investment in additional capacity in Cumbria and Cheshire on track Food: Storage and activity levels remain strong; Continuing to use outside storage to deal with higher than anticipated storage requirements Fuels: Impacted by lower demand for heating oil over warm summer; overall volumes strong but squeezed margins
NWF, the specialist agriculture and distribution business, has issued a trading in-line AGM update. Despite challenging trading conditions within Feeds and Fuels, each of the three divisions are broadly performing to plan and we are leaving our FY17 forecasts unchanged (PBT £7.8m, EPS 12.4p).
This month saw a UK-listed stock operating in the African agriculture sector with a market capitalisation of just US$26m attract a US$65m funding package from CDC Group, the UK’s development finance institution. As we said at the time this is an extremely significant (and unexpected) deal for Zambeef Products (ZAM LN), which had otherwise been poised to deliver significant dilution to its investors (c50%) to satisfy an outstanding put option on its poultry joint ventures with RCL Foods (RCL SJ). In this issue we have taken a look at the African agriculture sector more widely and asked whether this deal signals a revival of investor interest in the sector as a whole or just a specific bright point in what has been a pretty disappointing sector for public equity investors over the last few years.
NWF ZAM GNS RE/
Full year results from NWF highlight that earnings are driven by contribution per unit of volume and not revenue (sales -5.4%, EBIT +1.2%). Moreover, despite the challenging trading environment, the business is demonstrably cash generative (FCF £8.4m in FY16, £8.8m FY15, average cash conversion 114% FY14-FY16). This generation is materially helped by a healthy working capital inflow (£5.2m FY16, £2.4m FY15). Therefore, whilst management spent £9.5m on acquisitions and £2.6m on dividends in FY16, net debt only increased from £5.8m to £9.7m. We believe that the on-going growth in volumes and operational efficiencies should help further earnings expansion and we have raised our target price from 149p to 180p.
UK-focused specialist agricultural and distribution business NWF Group (NWF LN), has released preliminary results for the year ended 31 May 2016 (FY 2016)
FY16 pre close update from NWF shows a solid performance, with earnings in-line with board expectations (PG EBIT £8.7m). We believe this is an impressive performance given the headwinds facing each of the three divisions. Moreover, despite spending £9.5m on acquisitions (FY16E), net debt ended the year “significantly lower than anticipated”. This highlights the cash generative nature of the group: post maintenance FCF has averaged £6.7m (FY12-FY16E) and provides the firepower for the group’s bolt-on acquisition strategy.
NWF, the specialist distributor of feed, food and fuel, has announced a strategically interesting bolt-on acquisition in its Feeds division. It is acquiring Jim Peet (Agriculture) which adds production and distribution capabilities in the North of England and South West Scotland, extending the division’s footprint further northwards. Given the proximity to the financial year end, we are leaving our forecasts unchanged. However, we anticipate the deal will positively contribute to the bottom-line, once production synergies are realised (during FY17).
UK-focused specialist agricultural and distribution business, NWF Group (NWF LN), has announced the acquisition of Jim Peet (Agriculture), an established ruminant feed manufacturer.
Interim results from NWF show a solid start to FY16, with underlying EBIT unchanged at £2.8m (in-line with PG forecasts). We believe this is an impressive performance given the headwinds facing each of the three divisions (notably lower milk and fuel prices) and we maintain our FY16 PBT estimates of £7.4m. The business continues to deliver cash. Despite spending £4.5m on acquisitions (1H16) and £2.4m in dividends (2H15), Nov-15 net debt was £1.8m lower than in Nov-14 (£10.4m vs £12.2m). Post capex cash flow has averaged £7.1m over the last five years and provides the firepower for the group's bolt-on acquisition strategy.
UK-focused specialist agricultural and distribution business, NWF Group (NWF LN), has announced six-month results for the period ended 30 November 2015 (H1 2016).
Interim results from NWF show a solid start to FY16, with underlying EBIT unchanged at £2.8m (in-line with PG forecasts). We believe this is an impressive performance given the headwinds facing each of the three divisions (notably lower milk and fuel prices) and we maintain our FY16 PBT estimates of £7.4m. The business continues to deliver cash. Despite spending £4.5m on acquisitions (1H16) and £2.4m in dividends (2H15), Nov-15 net debt was £1.8m lower than in Nov-14 (£10.4m vs £12.2m). Post capex cashflow has averaged £7.1m over the last five years and provides the firepower for the group's bolt-on acquisition strategy.
NWF, the specialist distributor of feed, food and fuel, has issued an in-line trading update. As expected, warmer weather and lower milk prices are affecting sales within Feeds and Fuels, respectively. Offsetting these trends, Food continues to deliver high service levels (99.7%) and on-going efficiency gains. In addition, recent acquisitions are performing as expected. NWF appears to be delivering steady and (importantly) consistent growth in the business. Moreover, the business continues to deliver cash, with post capex cash flow averaging £7.2m over the last five years.
UK specialist agricultural and distribution business, NWF Group (NWF LN), has announced a trading update for the six months ended 30 November 2015 (H1 2016). Trading flat YoY (H1 2015 PBT: £2.5m) Net debt lower YoY (30 November 2014: £12.4m)
NWF Fuels Acquisition VSA Comment Wynnstay Completes Acquisition
NWF Group plc Wynnstay Group plc
NWF, the specialist agriculture and distribution business, has issued a trading in line update. Each of the three divisions are broadly performing to plan and we are leaving our FY16 forecasts unchanged (PBT £8.2m, EPS 13.4p). The shares have materially outperformed the market over recent weeks, reflecting the slightly better than expected FY15 results (announced 4th August). That said, the shares are trading at an undemanding forward P/E of 12.0x (Mar-16) and are yielding 3.4% (2.4x covered).
NWF Group: Q1 Trading Update
FY2015 ‘headline' PBT was marginally ahead of our forecast, at £8.1m (£7.7m-2014) following an upgrade in July. Revenues declined 8.4% to £492m reflecting the impact of lower oil prices in Fuels and commodity prices in Feeds. There was a strong recovery in Feeds in the second half and good performances from Food & Fuels. Strong cash generation leaves debt (at £5.9m) at a 10-year low. The full year dividend has been raised by 5.9% to 5.4p. The shares have performed well over last quarter, rising by 23%, underpinning a solid share price performance in the last year. The current PER rating of 11.7x is in line with peers but it offers a yield of 3.5% which is above a peer group average of 2.5%. We have increased our target price to 175p (165p) following these results and reiterate our Buy recommendation.
NWF Group: FY 2015 Results
FY2015 ‘headline' PBT was marginally ahead of our forecast, at £8.1m (£7.7m-2014) following an upgrade in July. Revenues declined 8.4% to £492m reflecting the impact of lower oil prices in Fuels and commodity prices in Feeds. There was a strong recovery in Feeds in the second half and good performances from Food & Fuels. Strong cash generation leaves debt (at £5.9m) at a 10-year low. The full year dividend has been raised by 5.9% to 5.4p. The shares have performed well over last quarter, rising by 23%, underpinning a solid share price performance in the last year. The current PER rating of 12.0x is in line with peers but it offers a yield of 3.5% which is above a peer group average of 2.5%. We have increased our target price to 175p (165p) following these results and reiterate our Buy recommendation.
