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I am very pleased to report on Wynnstay’s record pre-tax profit and revenue, in this my first Chief Executive Officer’s Review since taking up the role in July 2018. 

The Group performed well across all core activities, reflecting the improved trading backdrop for both the livestock and arable sectors. This came through in increased revenues from continuing operations, which were 18.4% higher than the previous year at £462.66m (2017: £390.72m). Volume growth drove £21.43m of the increase and acquisitions contributed £28.2m. Commodity price inflation was also a factor, adding £22.3m. Both the Group’s Divisions increased their profit contributions, driving a 20.5% rise in underlying* pre-tax profit to £9.60m (2017: £7.97m).

We continue to report the Group’s performance under two segments, Agriculture Division and Specialist Agricultural Merchanting Division (previously referred to as ‘Specialist Retail’), and a detailed review of activities is provided below.

Feed sales set a new record and the Glasson business turned in an exceptional performance. Both operations benefited from the prolonged dry weather conditions in 2018, which drove unseasonal demand for animal feed in the second half. Sales of herbage seed also reached a new high, with the same weather factors driving demand as farms replaced dried, worn-out pasture. The Specialist Agricultural Merchanting Division performed above our expectations with most product categories benefiting from improved farmer sentiment. We have grown this Division’s footprint with the acquisition of further depots, especially in the West Country. The addition of new farming customers creates further growth opportunities for the Group’s wider activities in feeds, fertiliser, and seeds, and helps to continue to build Wynnstay’s profile and market share.

Our crop marketing business, GrainLink, performed well in a difficult market and also expanded into a new trading area, opening an office at Grantham, Lincolnshire.


Agriculture Division

The Agriculture Division’s main activities comprise the manufacture and processing of feed, fertiliser and seeds and the marketing of other agricultural inputs. The Group’s crop marketing services, which are conducted through GrainLink, also form part of this Division.

Revenues from the Division rose by 19.0% over the year to £334.34m in 2018 (2017: £280.87m). This rise was driven mainly by increased demand across most product groups and commodity price inflation.

Operating profit increased by 28.4% to £4.29m (2017 £3.34m). This was despite margin pressure in some areas, which we anticipate continuing in 2019.

Both feed and arable activities performed above our expectations, with record sales of feed, milk replacers, and herbage seeds. Grain and fertiliser volumes were above last year’s levels, although margins were squeezed as competitors chased market share.

We continued to introduce innovative new products and to invest in our specialist sales teams who provide farmers with technical advice. Improving farm productivity remains a significant area of focus for farming enterprises and we aim to assist customers with products and services that will help them to achieve this.

Feed Products

Feed products are manufactured at our main facilities at Llansantffraid and Carmarthen as well as at a smaller facility at Rhosfawr. We manufacture a broad range of ruminant and monogastric feeds, in both loose bulk and a variety of bagged sizes. We also sell raw materials to farmers and other feed manufacturers. The wide range of feed that we offer, supplying dairy, beef, sheep, pig and poultry producers, is a major strength, smoothing out sector variations. It is complemented by our technical sales staff who are able to advise customers on all aspects of animal nutrition.

Total volumes of compound and blended feed products reached a record level, some 6.4% higher than the previous year. This reflected strong demand, especially in the second half of the financial year when the long, dry summer weather limited farmer-grown forage, causing farmers to buy in additional feed.

The increase in feed demand was felt across all sectors, with an especially strong demand for poultry feed as many egg producers increased the size of their business. We also experienced record sales of our calf feed and milk replacer products. In addition, our joint venture company, Bibby Agriculture Limited, benefited from these favourable trading conditions. The dry weather has caused a shortage of fodder for the Winter months, and we expect this to support ongoing feed demand.

Working with our Specialist Agricultural Merchanting depots, our feed advisors have helped to drive sales across a wider geographical area, and we expect to see further progress with this initiative over the new financial year.

During 2018, we continued to invest in our Llansantffraid facility to improve efficiencies and we will be continuing to focus on upgrading and enhancing systems. The outlook for feed products remains strong. Our model of supplying feed across the classes of livestock creates an ‘internal hedge’ which helps to smooth variations in sector demand and generate greater consistency in performance.

Glasson Grain

The Glasson business, which is based in Glasson Dock, near Lancaster, operates in three main areas: the supply of feed raw materials; production of fertiliser; and manufacture of animal feed products.

The business delivered an exceptional performance, with all activities outperforming budget.

The fertiliser operations benefited from the acquisition of a fertiliser blending facility in Montrose, East Scotland, in November 2017 and the integration of the FertLink joint venture manufacturing business. The addition of Montrose has enabled Glasson to trade with an entirely new customer base in a new geography. Glasson is now the second largest fertiliser blender in the UK.

Raw material commodity trading benefited from increased feed demand as a result of the extremely dry weather conditions, and feed manufacturing achieved record production as a demand for our specialist, added-value feed products increased.

Arable Products

Our arable activities performed strongly during the year, although with some variations across sub-sectors.

Overall, seed sales for the year were very good. While, the first half of the year saw reduced activity within our seed operations due to the late, wet Spring delaying planting, the extended dry Summer helped to drive record herbage seed sales, as the weather encouraged farms to replace worn-out pasture and grow forage crops to substitute for the lack of fodder. During the year, we refocused the activities of Woodhead Seeds, based in Selby, Yorkshire, and have brought it under the management of our main seed operation at Astley, Shropshire. This has resulted in lower cereal seed tonnage but a higher overall contribution.

Fertiliser sales for the year were above budget and ahead of the previous year although there was downward pressure on margins. The increase was driven by the busy Spring period and the late Summer surge, as farmers strived to grow grass and forage following months of prolonged dry conditions. A significant increase in fertiliser prices in the Autumn reduced forward purchasing, however, we would expect to see this translate into higher activity in Spring 2019.

We continue to develop our in-house grain marketing business, GrainLink, based in Shrewsbury, Shropshire, and have expanded its presence into Lincolnshire, opening a grain trading office in Grantham. The new office markets grains and oilseeds, and also sells fertiliser and seed. Our plans to develop the business in this area have been taken into consideration in our annual goodwill impairment process, details of which are contained in note 14 of the Financial Statements. Trading volumes at GrainLink were above the prior year and the business has performed well in tougher trading conditions, with the late Spring and dry Summer reducing yields and resulting in strong competition for the UK tonnage, which put pressure on margins.

GrainLink hosted its annual Arable Event in Shropshire in June 2018. This specialised event attracted over 1,000 arable farmers to evaluate field plots of the latest new seed varieties and to study new innovative and cutting-edge technology within the sector.

The dry Autumn has resulted in excellent drilling conditions across most of the country. This bodes well for our seed and grain trading activities in 2019.

Our warehouse expansion project at Astley in Shrewsbury has now been completed and the new facility which takes this warehouse to 30,000 sq. ft, is expected to become operational in the coming weeks. It gives us additional capacity for both our seed processing activities and our depots, and will improve operational efficiencies.


Revenue from our Specialist Agricultural Merchanting Division increased by 16.9% to £128.26m for the year (2017: £109.73m). Acquisitions accounted for approximately £7.83m of this rise and like-for-like sales were £10.7m ahead of the prior year including the effect of inflation. Operating profit contribution from the Division rose by 16.7% to £5.53m (2017: £4.74m).

The Division trades predominantly through a network of depots, which supply a wide range of products specifically geared to the needs of farmers, although rural dwellers also account for a proportion of sales. The offering at our depots includes animal health products, bagged feed and hardware. We also have SQPs (Suitably Qualified Persons) who provide value-added advice on animal health products, as well as the other products that we sell, and they help to make this operation an attractive route to market for our supplier base. The number of depots that we operate now stands at 59 (October 2017: 50).

As well as our Youngs Animal Feeds business, the Division also includes sales generated through our other channels-to-market, including specialist catalogues (for dairy, beef, sheep and poultry farmers), vans and online. It is an important part of the Group’s wider agricultural activities, and also assists in establishing the Group’s trading presence in new geographic areas.

Wynnstay Depots

The acquisitions of the eight former Countrywide depots in April 2018 (one of which we have since closed), MD Lloyd in January 2018 and Mike Hawken Limited in March 2018 have further extended the Group’s geographic trading presence, particularly in the West Country. The integration of these acquisitions is now substantially complete and their overall performance in the period was in line with our budget. We expect the Countrywide depots to make a positive contribution to the Division’s profitability in the new financial year to 31 October 2019.

Like-for-like sales across our depots increased by 9.8%, enabling us to report record sales. In particular feed, hardware, milk replacers and animal health products sales were very strong, reflecting improved trading conditions for farmers and weather-related purchases, particularly of bagged feed in the second half of the year.

Our depots continued to benefit from sales driven by the increasing popularity of our specialist catalogues for dairy, beef and sheep farmers. These have now been complemented by the recent launch of a poultry catalogue, which will appeal to the growing number of egg producers in our trading area. An online option is available for our customers but currently the vast majority choose other purchasing routes, reflecting traditional patterns of buying.

During the year we relocated our Ruthin depot, which has resulted in increased trade. We will continue to invest across our depot network over 2019, and to introduce carefully-chosen new products. We also remain focused on staff training so that our depot-based advisors provide farmers with value-added services.

Youngs Animal Feeds

Youngs Animal Feeds manufactures and markets a range of equine products that are sold through specialist outlets across Wales and the Midlands. Over the year, we reorganised the business transferring some feed manufacturing to Glasson. Our Molichop-branded feed range continues to be manufactured at our purpose-built factory at Standon and remains a market leading product.

Joint Ventures and Associates

In May 2018, the Group transferred the manufacturing operations of a joint venture company, FertLink Limited, into Glasson Grain, and, in June, we sold our share of the business in Wynnstay Fuels, an associate company. As a result, Wynnstay now has three joint venture businesses, Bibby Agriculture, Wyro and Total Angling, and one associate business, Celtic Pride.

The total contribution from the joint venture and associate businesses was higher than the previous year. This was mainly because of an exceptional performance by Bibby Agriculture.


I am very proud of our dedicated, professional and talented employees, and would like to thank them all for their continued hard work and commitment. Their skill and experience helps to ensure that Wynnstay remains one of the leading suppliers of agricultural products and advice to the agricultural industry.


The UK agricultural trading environment has improved significantly. Looking to the year ahead, trading conditions for the arable sector appear broadly favourable, helped by strong forward wheat prices although fertiliser and fuel costs are higher. In the livestock sector, milk prices are stable although there has been a reduction in forecast return over the short term, and red meat prices are firm. However, this sector will be affected by higher winter feeding costs as a result of the prolonged dry Summer, which has caused a shortage in farm-grown winter forage.

The UK’s withdrawal from the European Union creates uncertainties but the Government has confirmed that overall funding for UK farm support will be protected until 2022. The proposed Agriculture Bill gives us a clear indication that the Government will seek to support efficient production as well as measures to enhance the environment. Although the outcome and impact of Brexit is unknown, Wynnstay continues to have contingency plans with suppliers and believes that the requirement for innovation, productivity and efficiency will create long term opportunities.

Our focus remains on continuing to build market share, both organically and through acquisitions, and also driving further efficiencies within the Group. We believe that our broad range of products and technical advice will help to ensure that we remain a valuable route to market for our suppliers as we continue to position Wynnstay as the ‘supplier of choice’ for customers.

Gareth Davies
Chief Executive
22 January 2019