Wynnstay is committed to sustained development within the agriculture sector and will strive for continued growth by acquisition and organic development of the business. In so doing, Wynnstay Group Plc will optimise the return to all stakeholders in the business.
In order to achieve this ambition, the Group recognises that it must excel in terms of value, quality and the development of its products, services and people. The Group strives to become the “Supplier of Choice” for its customer base.
The Group’s development strategy to achieve ‘Supplier of Choice’:
The business operates in a sector where fundamental macro-economic drivers are supporting the growth of its principal activities. A growing world population and changing dietary habits are creating an increased demand for food production, which is supported by a political desire to promote greater productivity and self-sufficiency, in a sustainable manner. These factors provide a strong backdrop for expansion of the Group’s activities, although the inherent cyclical nature of much of the world’s food production can create certain short term stresses to the smooth operation of activities. The Board has always recognised that the natural processes involved in food production will, from time to time, create risks to certain enterprises at different times, either through climatic, disease, economic or other influences. Political factors must also be considered in any strategic planning process, and the overriding issue creating a high degree of uncertainty at the moment remains the Brexit process. The UK government has taken certain steps to alleviate some of this uncertainty within the agricultural sector. This includes commitment for financial support until 2022, which could stretch to 2024, and recognition of the importance of agriculture in less favoured areas as a contributor to the environment, tourism and rural communities. Its inclusion as a high priority industry for policy review also indicates the importance of agriculture in the UK food industry, and the Board awaits the detail of any initial transitional arrangements and ultimate policy framework. Both major political parties in the UK have indicated the need for continuing support in the sector, although this is likely to take a different form to the EU’s Common Agricultural Policy focusing on competitively priced food and care of the environment. Therefore a Group strategy which is designed to minimise risks by ensuring a broad and balanced spread of activities across all the main agricultural areas will be pursued. This policy of having a broad based business limits the impact of any adverse performance in any single activity, and has helped shelter the Group from periodic commodity volatility extremes in the past.
The main markets that the Group operate in continue to be supplied by a relatively fragmented industry. This has provided a strong platform for the development of the business through a consolidation strategy designed to increase market share. The Group has a good track record of both organic and acquisitive growth, and the Board is confident that, with the expertise and enthusiasm of staff, strong commercial relationships and balance sheet strength, this successful strategy can continue. The Board expect continued geographic expansion of the business’s core operating areas and a broadening of its product offering through the ongoing implementation of this strategy. Further growth of the Group will be across all aspects of its activities to ensure balanced development of the business model.
The business recognises the importance of innovation for the future of efficient agricultural production. There is a focus on selecting innovative products which can enhance the productivity of farming businesses and the company encourages communication with customers to promote the benefits of these products.
Long Term Viability
The Group works within a corporate plan to ensure clear direction and focus for strategic development of the business. Initially instigated in 2015 and substantially reviewed in early 2017, the current plan provides a framework into 2019, following which further clarity on Brexit related issues is expected. Regular reviews of planned goals take place to confirm they remain appropriate in changing circumstances. Annual budgets are set in line with corporate goals but recognise specific market conditions at the time.
The Group’s major focus is closely linked to the viability of the UK agricultural industry. Well publicised information on macro-economic factors associated with world supply of food and energy point to a resilient industry. However, the UK’s forthcoming exit from the EU will undoubtedly change the support mechanism for the farming sector. While it is too early to get a full understanding on future Government policy, any changes will be given careful consideration in the ongoing development of the business. The strategy of operating across multiple agricultural enterprises mitigates risk, and the Group will constantly review the long term outlook for the various sectors of the industry in light of all new information as it becomes available. The Board remains optimistic for the overall future of the UK agricultural industry, as the country has the climate, natural resource and expertise to remain a competitive player in the production of many food commodities. The focus on improved efficiency at all points of the food production cycle should offer further opportunities for the marketing of products and services offered by the Group.
The Group has identified four main groupings associated with the business, each has specific outline goals which must be balanced to satisfy the expectations of all stakeholders.
Shareholders – where the Group focuses on financial performance which supports a progressive dividend policy and capital growth in share value.
Customers – where the Group seeks to excel in terms of range, value, quality and service.
Employees – where the Group aims to attract, develop and reward high calibre personnel, and ensure a safe, interesting and productive environment to work in, thus encouraging the highest levels of customer service.
Suppliers – where the Group wishes to provide the best marketing route, thereby procuring preferential terms and offering better value for its customers.
Business Review and Future Developments
A review of the business and future developments of the Group and a discussion of the principal risks and uncertainties faced by the Group are presented in the Chairman’s Statement and Chief Executive’s Review included within the Group’s published accounts