ANNUAL REPORT
AND ACCOUNTS 2017
Moving into our 100th year of trading
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www.wynnstay.co.uk
Contents
About Wynnstay
Performance Highlights
Strategic Report
Principal Activities and Business Model
Locations
Group Strategy
Chairman’s Statement
Chief Executive’s Review
Finance Review
Risk Management Statement
Board and Advisors
Corporate Governance
Board of Directors
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Independent Auditor’s Report
Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated and Company Balance Sheet
Consolidated and Company Statement of Changes in Equity
Consolidated and Company Cash Flow Statement
Principal Accounting Policies
Notes to the Financial Statements
Shareholder Information
Notice of Annual General Meeting
Notes to Notice of Annual General Meeting
Financial Calendar
Shareholder Fraud Warning
Page
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5
7
8 - 9
10 - 11
12 - 13
14 - 17
18 - 20
22 - 24
25 - 26
27
29
30 - 31
32 - 33
34 - 36
37 - 40
41 - 44
45
46
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48 - 49
50
51 - 54
55 - 78
79
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81
82
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Wynnstay Group Plc
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About Wynnstay
A major supplier
of products and
services to the
evolving agricultural
industry
Wynnstay Group was established in 1918 as a farmer’s cooperative. Through a series of mergers,
acquisitive growth and conversion to a Plc, the business has developed into a major supplier of
products and services to the evolving agricultural industry and the rural economy. The business is
further strengthened by a number of complementary joint ventures and associate companies.
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www.wynnstay.co.uk Performance Highlights
Continuing operations only1
Group Revenue continuing operations (£m)
Profit before Tax continuing operations (£m)
£390.72m
((Restated) 2016: £353.73m)
10.46%
399.87
399.88
390.72
363.32
363.52
353.73
6.24%
8.13
7.85
7.62
7.67
7.66
7.21
£7.66m
((Restated) 2016: £7.21m)
Group Revenue
Earnings per Share continuing operations (pence)
Dividend per Share (pence)
12.60p
(2016: 12.00p)
5.00%
11.10
10.20
12.60
12.00
32.29p
((Restated) 2016: 29.71p)
8.68%
34.87
34.42
33.97
32.65
32.29
9.30
8.50
29.71
Operational
Growth in retail sales
Increased demand for farm inputs
Investment in company infrastructure
£390.72m + 10.46%
(Restated) 2016: £353.73m
Profit before Tax
£7.66m
(Restated) 2016: £7.21m
+ 6.24%
Underlying Pre-tax Profit*
£7.97m
(Restated) 2016: £7.30m
+ 9.18%
Earnings per Share
32.29 pence
2016: 29.71 pence
+ 8.68%
Shareholders’ Funds
£85.39m
2016: £86.95m
- 1.79%
Dividend per Share
12.60 pence
2016: 12.00 pence
+ 5.00%
1 Continuing operations exclude the results of the discontinued Just for Pets
Limited business. For more information, see note 11 on page 60.
* Underlying Pre-tax profits include the Group’s share of pre-tax profit from joint
ventures and associate investments but excludes the exceptional item and
share-based payments, a reconciliation is included in page 23 of the annual
report.
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Wynnstay Group Plc‘16‘15‘14‘13‘12‘16‘15‘14‘13‘12‘17‘16‘15‘14‘13‘12‘17‘16‘15‘14‘13‘12‘17‘17 Business snapshot
Investment
Specialist Events
Customer
Service
Product
Offering
In 2017 we continued with our programme of dedicated specialist events for our
customer base, bringing industry speakers and innovative products and services to
our customers.
In October we held the third annual Wynnstay Sheep & Beef Event, held for the
first time in Herefordshire. The event, which is unique within the industry, features
tradestands and demonstrations along with three key speakers providing their
Growth
views on the future of the industry.
The Arable Event, established in 2013 and held in Shropshire, has become
a key event in the calendar of arable farmers in the west of the UK. The
event includes agricultural tradestands, live demonstrations, tours of
new seed variety plots and key industry speakers.
Specialist events are a key part of Wynnstay’s strategy, to ensure
customers are offered access to the latest industry information to
enhance the productivity of their farming business.
Committed to
offering the
latest innovations
and technical
insights
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www.wynnstay.co.uk Strategic
Report
Principal Activities and Business Model
Locations
Group Strategy
Chairman’s Statement
Chief Executive’s Review
Finance Review
Risk Management Statement
Board and Advisors
Page
8 - 9
10 - 11
12 - 13
14 - 17
18 - 20
22 - 24
25 - 26
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Wynnstay Group Plc
Principal Activities and Business Model
The business model has been established to closely reflect the buying patterns of the ultimate customer. The business is reported as two
complementary divisions, Agriculture and Specialist Retail, with a number of operating units reported within the appropriate segments.
Established to closely
reflect the buying
patterns of the ultimate
customer.
Feeds
Glasson
Agriculture
Customer
Retail
Arable
Two complementary divisions,
Agriculture and Specialist Retail, with a
number of operating units reported within
the appropriate segments.
Wynnstay
Stores
Youngs
Animal
Feeds
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www.wynnstay.co.uk Agriculture
Specialist
Retail
The Agriculture Division covers the manufacturing
and supply of a comprehensive range of
agricultural inputs to customers across
many parts of the UK.
Our Retail Division covers the supply of specialist
agricultural and retail products to customers
throughout Wales, Central and Southern England.
Feed Division
Wynnstay Stores
The Feed Division, which operates two compound feed mills and
one blending plant, offers a full range of animal nutrition products
to the agricultural market. The location of the mills allows for
logistically efficient delivery of products throughout our trading
area, third party mills are also used to satisfy additional seasonal
and geographic requirements. Both mills are multi species allowing
the business to provide a broad range of products to service the
requirements of ruminant and monogastric animals. The business
recognises the requirement for nutritional expertise and employs
specialists to provide guidance on feed management for all farm
enterprises.
Continued investment at the two compound mills allows further
expansion of production in both bulk and bagged materials.
Glasson
Glasson, which operates from Glasson Dock near Lancaster, with
a recently acquired production plant in Montrose, is recognised
as a raw materials supplier and fertiliser blender and has a strong
customer base across the UK. Glasson’s activities also include the
packaging of added value products supplied to specialist animal
feed retailers. The business is also involved in a joint venture,
FertLink, which has production facilities at Birkenhead and Goole.
Glasson complements the Group strategy by providing a further
internal hedge against commodity volatility in the agricultural
supply industry.
Arable Division
The Arable Division supplies a wide range of products to arable
and grassland farmers throughout the trading area. The Group is
recognised as a significant supplier of fertiliser, acting as a principal
supplier of CF and Yara products together with our own Top Crop
brand of fertiliser. Seed is processed in Shropshire at the arable
base as well as at Woodheads Seeds in Yorkshire. Agrochemicals
are supplied to complete the range of products.
GrainLink, the Group’s
in-house grain marketing company,
provides farmers with an independent professional marketing
service backed by the financial security of the Wynnstay Group.
The Company has access to major markets for specialist milling
and malting grain as well as feed into mills throughout our trading
area.
The rural retail outlets are well established and provide a
comprehensive range of products for farmers and rural dwellers.
The stores, which now number 50, operating throughout Wales,
Central and Southern England, supply a wide range of specialist
products to farmers, smallholders and pet owners. Our enthusiastic
team are keen to help customers with technical advice on all
aspects of the wide range of products available. The model is
further strengthened by the use of sector specific catalogues and
proactive marketing to promote the extensive range of products
available to the industry. The increased diversity complements our
core agricultural business, acting as an important route to market
for pharmaceutical companies with whom the Group works closely
to provide specialist professional advice to livestock farmers.
Youngs Animal Feeds
Youngs Animal Feeds operates from its production facility at
Standon in Staffordshire. It manufactures and acts as a distributor
of a range of equine and small animal feeds through wholesalers
and retailers in the west of the UK.
Key Strengths
Manufacture and supply of a
comprehensive range of products for the
agricultural industry.
Experienced personnel provide specialist
agricultural advice.
Wynnstay Stores, located in rural areas,
provide a valuable route to market and
important link with farmers and country
dwellers.
Multi-channel offering supported by online
services and product catalogues.
See Group Strategy on page 12-13
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Wynnstay Group Plc
Trading Area, Agricultural Sites and Joint Ventures
Montrose
Agricultural Sites, Joint Ventures
and Trading Area
Feed mills in Powys and Carmarthenshire.
Blending plant in Gwynedd.
Arable and seed processing sites in
Shropshire and Yorkshire.
Raw materials and feed processing plant in
Lancashire.
Fertiliser processing plants at Lancashire,
Angus, the Wirral and Yorkshire.
Agricultural sites
Joint ventures
Trading activity
Glasson
Goole
Birkenhead
Rhosfawr
Llansantffraid
Astley
Carmarthen
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www.wynnstay.co.uk Trading Area, Agricultural Sites and Joint Ventures
Retail Locations
Wynnstay Stores
50 Wynnstay Stores operating
throughout the trading area providing
a comprehensive range of products for
farmers, smallholders and pet owners.
Wynnstay Stores and Wynnstay
Agricentres
Youngs Animal Feeds
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Wynnstay Group Plc
Group Strategy
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’:
Investment
Continued investment in
future developments
Product
Range
Offering a broad spectrum
of products and services
Operations
Continued investment in
manufacturing, technology
and IT systems
Growth
Organic and acquisitive
growth with continued
geographic expansion
Innovation
Select new products to
enhance the productivity of
agricultural enterprises
Supplier of
Choice
Customer
Service
Communicate with
customers and provide
a high level of
customer service
Marketing
Provide most effective
route to market for all
products and services
Operational Strategy
the
macro-economic
The business operates in a sector where
fundamental
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
inherent cyclical
activities, although
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.
Consideration is also given to marketing
and distribution channels to ensure effective
supply of the wide range of products and
services the Group can offer.
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www.wynnstay.co.uk Long Term Viability
The Group works within a corporate plan
to ensure clear direction and focus for
the business.
strategic development of
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-
factors associated with world
economic
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
Developments within the business:
Broad range of trading
brands:
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.
Corporate Goals
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
review of
the business and
A
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.
Geographic Reach
Continued geographic expansion
with the acquisition of a blending
plant and storage facilities
located at Montrose site on the
east coast of Scotland.
Growth
Investment
Investment
Innovation
Marketing
Continuing
Development
Product
Continuing to offer innovative
agricultural products to enhance
enterprise performance. Effective
routes to market are strengthened by
a CRM system.
Investment
Meet the
needs
Customer
Service
People
Continued investment in Wynnstay employees
to achieve excellent customer service, give fully
comprehensive specialist advice and offer the
customer a broad spectrum of specialist products.
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Wynnstay Group Plc
Chairman’s Statement
OVERVIEW
Wynnstay’s core agricultural and specialist
retail activities generated a significantly
improved performance on the prior year1.
However, financial results for the Group as
a whole have been impacted by the trading
difficulties at our pet products operation,
though decisive action has minimised the
effect on employees and creditors of Just for
Pets Limited, as well as shareholders in the
Group.
A key feature of the year was the improvement
in the trading backdrop, with market prices
for agricultural outputs recovering over the
year. For many farmers, particularly in the
dairy sector, output prices had previously
fallen to below the cost of production. The
recovery in prices over the period, therefore,
lifted sentiment across the sector, driving an
upturn in demand for most agricultural inputs,
including feeds.
The benefit of this recovery in demand is
evident in the Board’s preferred alternative
performance measure of underlying pre-tax
profit2 from continuing operations, which rose
by 9.2% to £7.97m (2016 restated: £7.30m)
despite some margin pressure. Revenues
generated
continuing
by Wynnstay’s
operations increased to £390.72m (2016
increased
restated: £353.73m),
activity in most sectors as well as inflation
in certain product categories. The Group’s
reported pre-tax profit3 includes a one-off
charge, associated with the Just for Pets
Limited business, which reduced the outcome
to £1.15m (2016: £7.29m) for the year.
reflecting
The most marked improvements in output
prices were in the livestock sector, particularly
dairy, where milk prices increased sharply
over the last 12 months, although they did
not reach the levels seen in 2013. We remain
encouraged about the level of demand for
livestock feed in the current year.
Seed sales were in line with last year’s record
level and overall fertiliser sales were higher
year-on-year. This reflected increased activity
in Glasson’s fertiliser business in northern
England and Scotland. Grain volumes were
lower compared to the prior year, partly a
result of the smaller harvest of 2016 but also
reflecting farmers’ reluctance to trade grain as
prices declined during the autumn period.
in
farmers
invested
Sales from the network of Wynnstay Stores
their
increased as
enterprises, with a significant improvement
in hardware, supplements and animal health
products. Our stores provide a valuable route
to market, both for our own products and for
those of national suppliers, and we intend to
further expand our geographic presence as
well as invest in ongoing store upgrades and
Jim McCarthy,
Chairman
14
Focused on the
opportunities
presented by
the evolving UK
market
www.wynnstay.co.uk refurbishments. Further details on the Group’s
trading performance are provided in the Chief
Executive’s Review.
Cash generation remained strong during the
year and, at the year end, the Group’s net
cash position was £4.51m (2016: £4.28m).
The Board is encouraged by the progress
that has been made during the year in the
Group’s continuing operations, and plans to
make further investments across all aspects
of the business as it continues to strengthen
Wynnstay’s position as a major supplier of
agricultural products and services to farmers
and the rural community.
FINANCIAL RESULTS
operations
For the year to 31 October 2017, revenues
increased
from
continuing
(2016 restated:
by 10.5% to £390.72m
£353.73m), owing partly to a reversal of the
commodity price deflation experienced in
recent years. Agriculture sales contributed
£280.87m (2016: £249.74m), which reflected
higher average unit values for most feed, seed,
grain and fertiliser products. Specialist Retail
revenue increased by 5.7% to £109.73m
(2016 restated: £103.86m), with good like-
for-like growth in many important product
categories as farmer confidence improved
and farm-related investment increased.
Reported profit before tax from continuing
operations increased by 6.2% to £7.66m
(2016 restated: £7.21m), and on the Board’s
preferred alternative performance measure
of “Underlying Group pre-tax profit”, which
includes the gross share of results from joint
ventures and associates, but excludes share-
based payments and exceptional items, the
Group achieved an increase of 9.2% on the
prior year to £7.97m (2016 restated: £7.30m).
includes an
The improvement in trading conditions is
reflected in both operating divisions, with
(2016:
Agriculture contributing £3.34m
£3.01m) to operating profit, a rise of 11.0%
year-on-year. This
improved
performance in the FertLink and Bibby joint
ventures. Our Specialist Retailing activities
contributed £4.74m (2016 restated: £4.47m),
a 6.0% increase, which mainly reflected
improved revenues across nearly all stores.
Other activities recorded a similar loss to the
prior year of £0.10m (2016: loss of £0.10m).
Net finance costs increased slightly to £0.15m
(2016
restated: £0.14m) as commodity
inflation created higher average working
capital utilisation.
Basic earnings per share from continuing
operations were 8.7% higher at 32.29p
per share (2016 restated: 29.71p). Costs
associated with the discontinued Just for Pets
Limited business amounted to £6.59m (2016
restated: income of £0.06m). This resulted in a
reported loss for the year after tax of £0.28m
(2016: profit of £5.83m).
Balance sheet net assets stood at £85.39m
(2016: £86.95m) at the year end, equating to
£4.37 (2016: £4.48) per share, and the return
on net assets from continuing operations was
9.4% (2016 restated: 8.4%).
DIVIDEND
Reflecting the recovery in the performance of
continuing operations, the Board is pleased
to propose the payment of an increased final
dividend of 8.40p per share (2016: 8.00p).
This, together with the interim dividend of
4.20p per share, paid on 31 October 2017,
takes the total dividend for the year to 12.60p,
an increase of 5.0% on last year (2016:
12.00p).
The final dividend will be paid on 30 April 2018
to shareholders on the register on 3 April
2018. A scrip dividend alternative will continue
to be available as in previous years. The last
date for election for the scrip dividend will be
16 April 2018.
COLLEAGUES
Wynnstay has tremendously dedicated and
talented colleagues across its operations and,
on behalf of the Board, I would like to thank
them all for their input and hard work during
the year. Their expertise and commitment will
help to drive Wynnstay’s performance and
future growth.
OUTLOOK
Wynnstay has the benefit of a strong balance
sheet and a broad base of activities covering
all aspects of agricultural inputs. This has
been a significant factor in Wynnstay’s resilient
performance during the prolonged downturn
which affected the whole of UK agriculture. It
also creates a robust platform for the Group’s
future growth and development.
The improvement in farmgate prices has
generated an increase in demand for most
agricultural inputs and, with market prices
at more realistic levels for farmers, there is a
greater degree of stability within the industry.
Currently, the medium-to-long term picture
is less clear, due to the ongoing negotiation
process for the UK’s exit from the European
Union and the likely shift in the nature of
support mechanisms
for UK agriculture.
However, the Government has indicated its
support for the industry as a whole, and
Brexit comes at a time when world demand
for agricultural products for food and also for
energy continues to increase. This is a positive
driver for the industry and should bring further
opportunities for Wynnstay.
While there are some uncertainties over the
next few years, the Board remains confident
of the Group’s market positioning and is firmly
focused on the opportunities presented by the
evolving UK market.
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Jim McCarthy
Chairman
30 January 2018
1 2016 results have been restated to reclassify the Just for Pets
Limited operation during the year ended 31 October 2017 as
discontinued.
2 The underlying pre-tax profit calculation is defined and shown on
page 23 in the Finance Review.
3 Reported pre-tax profit is profit for the year, adding back taxation
and share of tax incurred by associates and joint ventures as is
shown on page 24 in the Finance Review.
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Wynnstay Group Plc
Datganiad Y Cadeirydd
TROSOLWG
Arweiniodd gweithgareddau amaethyddol
a manwerthu arbenigol craidd Wynnstay
at berfformiad llawer gwell o gymharu â’r
flwyddyn flaenorol . Fodd bynnag, mae’r
anawsterau masnachu yn ein gweithrediad
cynnyrch i anifeiliaid anwes wedi effeithio ar
ganlyniadau ariannol y Grŵp cyfan, er bod
camau gweithredu pendant wedi lleihau’r
effaith ar gyflogeion a chredydwyr Just for
Pets Limited, yn ogystal â cyfrandalwyr yn y
Grŵp.
Un o nodweddion allweddol y flwyddyn
oedd y gwelliant yn y sefyllfa masnachu,
gyda phrisiau’r farchnad ar gyfer allbynnau
amaethyddol yn adfer dros y flwyddyn. I lawer
o ffermwyr, yn enwedig yn y sector llaeth,
roedd prisiau allbwn wedi gostwng yn is na
chost cynhyrchu. Arweiniodd y gwelliant
mewn prisiau dros y cyfnod at welliant ym
mhob rhan o’r sector, gan hyrwyddo cynnydd
yn y galw am y rhan fwyaf o fewnbynnau
amaethyddol, gan gynnwys porthiant.
Mae budd y cynnydd hwn mewn galw yn
amlwg yn y mesur perfformiad amgen a ffefrir
gan y Bwrdd sef elw cyn treth sylfaenol² o
weithrediadau parhaus, a gododd 9.2% i
£7.97m (ailddatganwyd 2016: £7.30m) er
gwaethaf peth pwysau o ran elw. Cynyddodd
refeniw a gynhyrchwyd gan weithrediadau
parhaus Wynnstay i £390.72m (ailddatganwyd
2016: £353.73m), gan adlewyrchu cynnydd
mewn gweithgarwch yn y rhan fwyaf o
sectorau yn ogystal â chwyddiant mewn
categorïau cynnyrch penodol. Mae elw cyn
treth³ y Grŵp a gofnodwyd yn cynnwys tâl
untro, sy’n gysylltiedig â’r busnes Just for
Pets Limited, a wnaeth leihau’r canlyniad i
£1.15m (2016: £7.29m) ar gyfer y flwyddyn.
Y gwelliannau mwyaf nodedig mewn prisiau
allbwn oedd yn y sector da byw, yn enwedig
llaeth, lle cododd prisiau llaeth yn sydyn dros
y 12 mis diwethaf, er na wnaethant gyrraedd
y lefelau a welwyd yn 2013. Rydyn yn parhau
i deimlo’n galonogol am lefel y galw am
borthiant da byw yn y flwyddyn gyfredol.
Roedd gwerthiannau hadau yn unol â’r
lefel uchaf a welwyd
llynedd ac roedd
gwerthiannau gwrtaith cyffredinol yn uwch
o flwyddyn
i flwyddyn. Roedd hyn yn
adlewyrchu cynnydd mewn gweithgarwch
ym musnes gwrtaith Glasson yng ngogledd
Lloegr a’r Alban. Gwerthwyd llai o rawn o
gymharu â’r flwyddyn flaenorol, yn rhannol
o ganlyniad i gynhaeaf llai 2016 ond hefyd
mae’n adlewyrchu amharodrwydd ffermwyr i
fasnachu grawn wrth i brisiau ostwng yn ystod
cyfnod yr hydref.
Jim McCarthy,
Cadeirydd
16
Canolbwyntio
ar y cyfleoedd
a gyflwynir gan
farchnad esblygol
y DU
www.wynnstay.co.uk caledwedd,
atchwanegiadau
Cynyddodd gwerthiannau o
rwydwaith
Wynnstay Stores wrth i ffermwyr fuddsoddi
yn eu mentrau, gyda chynnydd sylweddol
mewn
a
chynnyrch iechyd anifeiliaid. Mae ein siopau
yn rhoi llwybr gwerthfawr i’r farchnad ar
gyfer cynhyrchion ein hunain a chynhyrchion
cyflenwyr cenedlaethol, ac rydym yn bwriadu
ehangu ein presenoldeb daearyddol yn
ogystal â buddsoddi mewn gwaith parhaus
i uwchraddio ac adnewyddu siopau. Ceir
manylion pellach ar berfformiad masnachu’r
Grŵp yn Adolygiad y Prif Weithredwr.
Anogir y Bwrdd gan y cynnydd a wnaed yn
ystod y flwyddyn yng ngweithrediadau parhaus
y Grŵp, a’r nod yw gwneud buddsoddiadau
pellach ym mhob agwedd ar y busnes wrth
iddo barhau i cryfhau sefyllfa Wynnstay fel
prif gyflenwr cynhyrchion a gwasanaethau
amaethyddol i ffermwyr a’r gymuned wledig.
CANLYNIADAU ARIANNOL
Ar gyfer y flwyddyn hyd at 31 Hydref 2017,
cynyddodd refeniw o weithrediadau parhaus
10.5% i £390.72m (ailddatganwyd 2016:
£353.73m), yn rhannol oherwydd gwrthdroad
y dadchwyddiant mewn prisiau nwyddau a
welwyd yn ystod y blynyddoedd diwethaf.
Cyfrannodd gwerthiannau amaethyddiaeth
£280.87m (2016: £249.74m), sy’n adlewyrchu
gwerthoedd uned uwch ar gyfartaledd ar
gyfer y rhan fwyaf o gynnyrch porthiant,
hadau, grawn a gwrtaith. Cynyddodd refeniw
Manwerthu Arbenigol 5.7%
i £109.73m
(ailddatganwyd 2016: £103.86m), gyda thwf
tebyg am debyg da mewn nifer o gategorïau
cynnyrch pwysig wrth i hyder ffermwyr wella
ac wrth i’r buddsoddiad yn ymwneud â
ffermydd gynyddu.
Cynyddodd elw a adroddwyd cyn
treth
o weithrediadau parhaus 6.2% i £7.66m
(ailddatganwyd 2016: £7.21m), ac ar y mesur
perfformiad amgen a ffefrir gan y Bwrdd sef
“elw cyn treth sylfaenol y Grŵp”, sy’n cynnwys
cyfran gros o ganlyniadau o fentrau ar y cyd a
chwmnïau cyswllt, ond heb gynnwys taliadau
yn seiliedig ar gyfranddaliadau ac eitemau
eithriadol, cyflawnodd y Grŵp gynnydd o
9.2% o gymharu â’r flwyddyn flaenorol i
£7.97m (ailddatganwyd 2016: £7.30m).
Caiff y gwelliant mewn amodau masnachu ei
adlewyrchu yn y ddwy is-adran gweithredu,
gydag Amaethyddiaeth yn cyfrannu £3.34m
(2016: £3.01m) at elw gweithredu, cynnydd
o 11.0% o flwyddyn i flwyddyn. Mae hyn
cynnwys perfformiad gwell yn y mentrau
ar y cyd, FertLink a Bibby. Cyfrannodd
ein gweithgareddau Manwerthu Arbenigol
£4.74m
(ailddatganwyd 2016: £4.47m),
cynnydd o 6.0%, sy’n bennaf yn adlewyrchu
refeniw gwell ym mhob siop bron. Cofnododd
gweithgareddau eraill golled tebyg i’r flwyddyn
flaenorol o £0.10m (2016: colled o £0.10m).
Cynyddodd costau cyllid net ychydig
i
£0.15m (ailddatganwyd 2016: £0.14m) wrth
i chwyddiant mewn nwyddau greu defnydd
cyfartalog uwch o gyfalaf gweithio.
Roedd enillion sylfaenol fesul cyfranddaliad
o weithrediadau parhaus 8.7% yn uwch ar
32.29c fesul cyfranddaliad (ailddatganwyd
2016: 29.71c). Cyfanswm costau a oedd yn
gysylltiedig â’r busnes Just for Pets Limited
a ddaeth i ben oedd £6.59m (ailddatganwyd
2016: incwm o £0.06m). Arweiniodd hyn at
golled a adroddwyd ar gyfer y flwyddyn ar ôl
treth o £0.28m (2016: elw o £5.83m).
Parhaodd lefelau cynhyrchu arian parod i fod
yn gryf yn ystod y flwyddyn ac, ar ddiwedd y
flwyddyn, sefyllfa arian parod net y Grŵp oedd
£4.51m (2016: £4.28m).
Cyfanswm asedau net y
fantolen oedd
£85.39m (2016: £86.95m) ar ddiwedd y
flwyddyn, sy’n cyfateb i £4.37 (2016: £4.48)
fesul cyfranddaliad, a’r adenillion ar asedau
net o weithrediadau parhaus oedd 9.4%
(ailddatganwyd 2016: 8.4%).
DIFIDEND
Gan adlewyrchu’r cynnydd ym mherfformiad
gweithrediadau parhaus, mae’n bleser gan y
Bwrdd gynnig talu difidend terfynol o 8.40c
fesul cyfranddaliad (2016: 8.00c). Ynghyd â’r
difidend interim o 4.20c fesul cyfranddaliad,
a dalwyd ar 31 Hydref 2017, mae hyn yn
creu cyfanswm difidend o 12.60c ar gyfer y
flwyddyn, sy’n gynnydd o 5.0% o gymharu â’r
llynedd (2016: 12.00c).
Telir y difidend terfynol ar 30 Ebrill 2018 i
gyfranddalwyr sydd ar y gofrestr ar 3 Ebrill
2018. Bydd difidend sgrip amgen ar gael
o hyd, fel mewn blynyddoedd blaenorol. Y
dyddiad olaf ar gyfer dewis cael difidend sgrip
fydd 16 Ebrill 2018.
CYDWEITHWYR
Mae gan Wynnstay gydweithwyr gwirioneddol
ymroddedig a thalentog ym mhob rhan o’i
weithrediadau ac, ar ran y Bwrdd, hoffwn
ddiolch i bob un ohonynt am eu mewnbwn a’u
gwaith caled yn ystod y flwyddyn. Bydd eu
harbenigedd a’u hymrwymiad yn helpu i lywio
perfformiad a thŵf Wynnstay yn y dyfodol.
RHAGOLWG
Gall Wynnstay fanteisio ar fantolen gref a Gall
Wynnstay fanteisio ar fantolen gref a sail eang
o weithgareddau sy’n cwmpasu pob agwedd
ar fewnbynnau amaethyddol. Mae hyn wedi
bod yn ffactor pwysig ym mherfformiad
cadarn Wynnstay yn ystod y dirywiad hir a
gafodd effaith ar y byd amaeth ledled y DU.
Mae hefyd yn creu llwyfan cadarn ar gyfer tŵf
a datblygiad y Grŵp yn y dyfodol.
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Mae’r gwelliant mewn prisiau clwyd fferm
wedi arwain at gynnydd yn y galw am y rhan
fwyaf o fewnbynnau amaethyddol a, gan fod
prisiau’r farchnad ar lefelau mwy realistig i
ffermwyr, mae mwy o sefydlogrwydd o fewn
y diwydiant.
Ar hyn o bryd, mae’r darlun tymor canolig i
hirdymor yn llai clir, oherwydd y broses negodi
barhaus o ran ymadawiad y DU â’r Undeb
Ewropeaidd a’r newid tebygol yn natur y
dulliau cymorth ar gyfer amaethyddiaeth yn
y DU. Fodd bynnag, mae’r Llywodraeth wedi
datgan ei chefnogaeth ar gyfer y diwydiant
cyfan, ac mae Brexit yn dod ar adeg pan
mae’r galw am gynhyrchion amaethyddol
ar gyfer bwyd a hefyd ar gyfer ynni ledled y
byd yn parhau i gynyddu. Mae hyn yn ffactor
cadarnhaol ar gyfer y diwydiant a dylai ddod â
chyfleoedd pellach i Wynnstay.
Er bod peth ansicrwydd ar gyfer yr ychydig
flynyddoedd nesaf, mae’r Bwrdd yn parhau
i fod yn hyderus ynghylch lleoliad y Grŵp yn
y farchnad ac mae’n canolbwyntio’n gadarn
ar y cyfleoedd a gyflwynir gan farchnad y DU
sy’n esblygu.
Jim McCarthy
Cadeirydd
30 Ionawr 2018
1 Mae canlyniadau 2016 wedi cael eu hailddatgan i ailddosbarthu’r
gweithrediad Just for Pets Limited yn ystod y flwyddyn a ddaeth i
ben 31 Hydref 2017 fel gweithrediad sydd wedi dod i ben.
² Diffinnir a dangosir y cyfrifiad elw cyn treth sylfaenol ar dudalen 23
yn yr Adolygiad Ariannol.
³ Mae elw cyn treth a gofnodir yn elw ar gyfer y flwyddyn, gan
ailychwanegu trethiant a chyfran o’r dreth yr eir iddi gan gwmnïau
cyswllt a chyd-fentrau fel y dangosir ar dudalen 24 yn yr Adolygiad
Ariannol.
17
Wynnstay Group Plc
Chief Executive’s Review
INTRODUCTION
The Group’s core agricultural businesses
delivered a significantly improved performance
year-on-year, despite continuing margin
pressures. However, as expected, Wynnstay’s
results overall were impacted by Just for Pets
Limited (“JfP”), which was regrettably placed
into administration on 10 October 2017.
increased
to £7.66m
The Group’s profit before tax from continuing
operations
(2016
restated: £7.21m). Underlying pre-tax profit1
(as defined on page 23) from continuing
operations, increased by 9.2% to £7.97m
(2016 restated: £7.30m). The rise in the
Group’s profitability reflected an uplift in
activity across most of the Group’s businesses
as trading conditions for farmers improved.
Revenues from continuing operations rose to
£390.72m (2016 restated: £353.73m), with
inflation affecting nearly all bulk commodities.
Ken Greetham,
Chief Executive
18
We plan to
continue to invest
in the Group’s
infrastructure
Including the effect of JfP, the Group’s reported
profit before tax was £1.15m2 (2016: £7.29m).
As previously announced, JfP’s performance
was hit by deteriorating trading conditions and
its ultimate move into administration was one
of the most difficult situations that the Group
has experienced. We are, however, pleased
that the decisive actions taken helped to
minimise the potential adverse effects on all
those concerned, including employees, with
a high proportion of jobs preserved. JfP’s
trading losses in the second half, along with
the costs relating to its administration, have
been recognised in the Group’s results as well
as the related goodwill impairment charge,
which was taken in the first half of the year.
The improvement in farmgate prices during
the year came as welcome relief to our farmer
customers and, while questions around Brexit
are likely to cause some ongoing caution,
output prices are now at a more sustainable
level for producers. This has boosted the
farming industry and increased demand for
most inputs, particularly dairy feed, which had
suffered from reduced demand in the previous
year.
The business continues to seek organic and
acquisitive expansion, and I am pleased
to highlight the acquisition, by Glasson, of
a fertiliser blending facility at Montrose, in
November 2017. It is an opportunity for
us to increase our share in the UK fertiliser
market with further geographic expansion into
Scotland. There are also investment plans in
place that will enable us to improve efficiency
and expand our capacity
feeds and
seeds, along with an ongoing refurbishment
programme at our retail outlets.
in
The agreement of terms for the UK’s exit from
the EU remains unresolved and this creates
a degree of uncertainty in the agricultural
market. However, the UK is a relatively
efficient producer of most agricultural
products and this, combined with pledged
www.wynnstay.co.uk support from the UK Government, gives a
degree of comfort to the industry. Whatever
the outcome of the final Brexit negotiations,
there is no doubt that improving productivity
will remain a significant focus for most farming
enterprises, and Wynnstay is well positioned,
with its broad range of products and services,
to aid efficiency within the sector.
REVIEW OF ACTIVITIES
Agriculture
The Group’s agricultural operations provide
a full range of inputs to arable and livestock
farmers. This
is complemented by crop
marketing services and, in most regions,
a network of country stores, which offer
Wynnstay’s customers a one-stop shop,
catering for their needs with a wide range of
products.
The Agricultural Division generated an
operating contribution for the year of £3.34m,
up 11.0% year-on-year
(2016: £3.01m),
although we experienced some variation
in contribution across product sectors.
Revenues rose by 12.5% to £280.87m (2016:
£249.74m), which reflected volume increases
across most agricultural inputs, except grain,
as well as some inflationary impact in feed and
grain prices.
in output prices
The significant decline
experienced by
in 2015 carried
farmers
through into 2016, but the welcome upturn
in prices over the course of 2017 has now
brought a degree of optimism to the sector.
Demand for feed and fertiliser, which can be
viewed as the drivers for yield, increased in the
period, mirroring the general UK market. We
experienced some variation in order patterns
for fertiliser as farmers timed their orders
around fluctuations in market prices during
the year. Demand for seed was in line with
previous years’, however the smaller 2016
harvest meant that grain volumes were lower
year-on-year.
Wynnstay’s position as a supplier of a
comprehensive range of agricultural inputs,
combined with our retail business model
continues to create opportunities for the
Group to expand its presence both within its
existing trading areas and beyond.
Feed Products
The previously reported increase in farm
output prices, particularly for milk, increased
UK demand for feed products. This is reflected
in the strong upturn in feed demand year-on-
year, and it also provides us with confidence
for sales over the winter period. The increased
volume of milk in the UK market has given
rise to some concern over milk prices, which
have peaked at around 30p/litre, and there
is some possibility of a slight reduction. With
a generally stable UK and world market, we
believe that this is likely to be short-term,
and we do not expect to see a repeat of the
reduction in prices experienced in 2015.
ruminant
range of
The business produces a
monogastric and
feeds which,
along with the supply of blended feeds and
traded raw materials, provides stability to the
feed business, as well as protection against
potential volatility in any one sector of the
livestock market. The supply of bagged
feeds brings further predictability and stability
to production. Demand for bagged feed,
which is mainly sold through the retail stores,
increased during the year, and our investment
in the new bagging facility, in 2016, helped to
satisfy demand efficiently. Further investment
in both our compound feed mills is planned
for 2018.
There is an ongoing requirement for the
farming industry to improve efficiencies, and
Wynnstay is well placed to provide a wide
range of products, along with advice from its
in-house specialists, to aid the process.
Glasson Grain
The Glasson business, based in Lancashire,
is involved in the supply of raw materials,
processing of specialist feed products and
the marketing of fertiliser, both wholesale and
direct-to-farm.
While demand for raw materials was lower than
the previous year, sales of fertiliser increased
significantly, albeit with some reduction in
margin in a competitive market. The business
has increased its market penetration in the
north of England and Scotland, and the
acquisition of the Montrose production facility
in Scotland, after the year end, will further
enhance sales in the area.
The financial outcome for the year is in line
with the previous year, with an increase
in contribution from fertiliser balancing a
reduction within the trading division of the
business.
The smaller 2016 harvest, combined with
a reticence of farmers to sell grain from the
larger 2017 crop, contributed to a reduction
in volumes year-on-year in GrainLink, our
in-house grain marketing business. We also
experienced some margin pressure as traders
competed in a subdued market. Wheat prices
weakened slightly during the autumn period,
however longer term futures prices indicate a
general level of stability at above the average
cost of production. Overall, farm stocks of
grain are higher than in 2016, most of which
will be traded before the 2018 harvest.
Specialist Retail
Revenue from ongoing specialist retailing
activities increased by 5.7% to £109.73m
(2016 restated: £103.86m), with a 6.0%
increase in contribution to £4.74m (2016
restated: £4.47m).
Our specialist retailing activities now comprise
the Group’s network of Wynnstay Stores,
which supply a wide range of products for
farmers and country dwellers, and Youngs
Animal Feeds, which offers a range of
products for equine and small animals. This
follows the Group’s very difficult decision
to withdraw from the pet products market.
The pets sector has seen very challenging
trading conditions since
late 2015 and
JfP began to experience a deterioration in
trading in 2016. In the first half of FY 2017,
it became apparent that the JfP business
did not have sufficient scale as a standalone
retailer to survive an increasingly difficult
trading environment. Following consultation
with advisors, and careful and extensive
consideration of possible solutions, including
a sale of the business, the decision was
taken to institute an administration process.
While this was extremely disappointing, we
are pleased that the decisive action helped to
minimise, as much as possible, the effect of a
very challenging situation on employees and
creditors to the JfP business.
Arable Products
Wynnstay Stores
remains
The arable business
strong,
although lower grain volumes, along with
continued margin pressure, have reduced the
contribution of this area of activity compared
to the prior year. Combined sales of cereal
and herbage seed was in line with the record
performance of the previous year, and the
business is well placed as a major supplier of
seed to UK farmers. Further capital investment
is budgeted for in 2018 to support additional
expansion of the site at Astley in Shropshire.
Demand for fertiliser was strong in the spring
and summer periods, although, in contrast to
the previous year, higher prices in the autumn
tempered demand for early, out-of-season
orders. As a result, it is expected that there will
be a stronger spot market as farmers buy for
the spring usage period.
The Group’s network of Wynnstay Stores has
a strong geographic presence throughout
Wales and the west of England.
Like-for-like sales across the Stores business
increased by 5%, with the upturn reflecting
improved sentiment in the livestock sector,
a result of higher output prices for milk and
meat. This has been particularly evident in
animal health and hardware products as
well as milk powders, which our specialists
within the Agricultural Division also advise
on. The success of our Dairy and Sheep &
Beef catalogues has also contributed to the
improvement in sales, although a change in
product mix across the store network has led
to a slight reduction in average margin.
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Wynnstay Group Plc
Chief Executive’s Review continued
We continue to invest in the network of
Wynnstay Stores, and we finished a total
refurbishment of the Craven Arms outlet, in
Shropshire, early in the year. In January 2018,
we also completed the relocation of our store
in Ruthin, in Denbighshire.
The Wynnstay Agricentre business, based in
the south west of the UK, operates a slightly
different model, with a high percentage of
products delivered to
farms. During the
year, we have focused on the efficiency of
its delivery network, and this has resulted in
the closure of two outlets and initiatives to
create better customer service processes. We
have also invested in personnel in the region,
ahead of an anticipated improvement in sales
throughout the trading area.
Wynnstay Stores provide an important route
to market across a wide geographic area for
both our own products and those supplied
by national and international manufacturers.
We anticipate further growth in our specialist
retailing activities as we expand the Group’s
trading area, and envisage new opportunities
arising for the development of products within
the Agricultural Division.
Youngs Animal Feeds
The Youngs business manufactures and
markets a range of equine products to
specialist outlets across the centre of the UK.
We are currently in the process of reorganising
this activity to optimise its operations within
the Group.
Joint Ventures and Associates
The Group has four joint venture businesses
(Bibby Agriculture, Wyro, FertLink and Total
Angling) as well as two associate businesses
(Wynnstay Fuels and Celtic Pride). These
extend the Group’s activities and strengthen
its marketing channels for a number of
products. Their combined contribution was
higher year-on-year, benefiting in particular
from an improved performance from FertLink,
which reflected a recovery in volumes in the
fertiliser marketplace.
STAFF
The last two years have been challenging for
our farmer customers and all those involved
in the agricultural supply industry. The talent
and dedication of our personnel forms the
bedrock of the Group’s success and I would
like to take this opportunity to record my
personal appreciation to all our staff who
have contributed so much this year. 2018 is
a centenary year for Wynnstay and there are
a number of plans underway to mark this
milestone, which we look forward to with great
enthusiasm.
OUTLOOK
20
in demand
improvement
The recovery in output prices has brought
for
a welcome
all agricultural inputs. The improvement is
principally a result of a more balanced world
market, particularly for milk products. Prices
have also been enhanced by the devaluation
of sterling, which brought added benefits to
the UK industry. The improved pricing appears
to be sustainable, at least in the short-term,
and the farming industry is eagerly awaiting
the outcome of the Brexit negotiations to
understand the full implications for demand
and prices in the medium to long-term.
The macroeconomic factors of increasing
population, dietary changes, and the strategic
importance of a sustainable food supply are
significant points of consideration for the
industry. While farming, rural communities and
the environment will still require some level of
Government support, the increasing focus
on agricultural efficiency and productivity
will create opportunities for the industry.
We believe that Wynnstay is well placed to
support long-term growth across the sector,
with its wide range of innovative products
and services, and well-established industry
relationships.
The new financial year has started in line
with management expectations. While Brexit
creates some uncertainty, the improvement in
output prices has brought about a sense of
renewed optimism, and the trading backdrop
is firmer than this time last year, which is
encouraging. As we embark on our centenary
year, we plan to continue to invest in the
Group’s infrastructure, particularly focusing
on manufacturing and logistics, which will
improve the Group’s efficiency and yield
broader benefits in the medium to long term.
I look forward to providing a further update
on trading at Wynnstay’s AGM in March with
the meeting’s venue returning to Shrewsbury
Town FC.
Ken Greetham
Chief Executive
30 January 2018
1 Underlying pre-tax profit includes the gross share of results from
joint ventures and associates, but excludes share-based payments
and exceptional items.
2 Reported profit before tax is profit for the year, adding back
taxation and share of tax incurred by associates and joint ventures
as is shown on page 24 in the Finance Review.
www.wynnstay.co.uk Business snapshot
Craven Arms Store Refurbishment
Investment
In December 2016 the Wynnstay Store located at Craven Arms in Shropshire was
reopened following a full refurbishment. The refurbishment and expansion of the
store offers an improved customer experience with a greater range of products and
services available in an improved shopping environment.
Customer
Service
Product
Range
The store is located in the heart of Shropshire’s rural community and offers
farmers and rural dwellers a comprehensive range of products and services,
supported by a direct sales and specialist team, catalogue and online
channels.
Marketing
The store’s
geographic
location is in the
heart of the rural
community
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Wynnstay Group Plc
Finance Review
Group Structure
into
reporting purposes,
the Group’s
For
classified
two
operations
are
main divisional
segments, Agriculture,
encompassing the manufacturing and supply
of a comprehensive range of agricultural inputs
delivered to customers, and Specialist Retail,
covering the supply of specialised products
linked through the provision of expert advice
of their use. An additional reporting segment
called “Others” is used for peripheral activities
not readily attributable to either of the main
segments.
The legal structure is a holding company,
Wynnstay Group Plc, which has investments
in five wholly owned trading subsidiaries,
namely;
- Wynnstay
(Agricultural Supplies)
Limited, an agricultural merchant.
- Glasson Grain Limited, a feed and
fertiliser merchant.
- GrainLink Limited, a grain merchant.
- Woodheads Seeds Limited, a seed
processor and merchant.
- Youngs Animal Feeds Limited, an
equine and pet products distributor.
Additionally, Wynnstay Group Plc holds
investments in the principal joint ventures and
associate companies outlined in note 19 in
the accounts, and certain other property and
investment assets, which are reported within
one of the appropriate segments.
Trading Results
the
the business over
trading conditions
A summary of
experienced by
the
last financial year is provided in the Chief
Executive’s Review on pages 18-20. The
financial performance of the business has
generally reflected
trading
the
environment for the Group’s predominant
farmer customers, where farm gate prices
have
the previous year,
supported by the lower value of Sterling
since the Brexit referendum result. Clearly
the final results are impacted by the Just for
Pets Limited discontinued activity, and further
details on this are given later.
improved over
improving
Following three years of a cumulative deflation
effect on revenues from falling commodity
values, we have seen a reversal in this trend
during the last financial year, which has
seen a 10.5% increase in Group revenues
from continuing activities, which reached
£390.72m
restated £353.73m).
While improved trading conditions has seen
increased demand and higher volumes in
certain product categories, we estimate the
inflationary impact on this reported revenue
(2016:
Paul Roberts,
Finance Director
22
The total dividend
represents the
fourteenth
consecutive
year of payment
growth
www.wynnstay.co.uk number at around £22m, mainly in our Agriculture segment, which had revenues of £280.87m (2016: £249.74m). Specialist Retail revenues from
continuing activities increased by 5.7% to £109.73m (2016: restated £103.86m) with good growth across core product categories.
On a continuing operations basis, Group operating profit before intangible amortization, share-based payments, investment impairment and
costs of corporate restructuring was £7.87m (2016: £7.36m), and profit before taxation on an IFRS basis was £7.66m (2016: £7.21m). On
the Board’s preferred alternative performance measure referred to as Underlying pre-tax profit which includes the gross share of results from
joint ventures and associates, but excluding share-based payments and impairment and exceptional items, the Group achieved £7.97m (2016:
£7.30m). A reconciliation with the reported income statement and this measure, together with the reasons for its use is given below:
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2016
(Restated)
Profit before tax from continuing operations
7,664
7,207
Share of tax incurred by joint ventures and associates
Share-based payments
Investment impairment and costs of corporate restructuring
70
142
95
26
63
-
Underlying Pre-tax profit
7,971
7,296
The Board uses this alternative performance measure as it believes the underlying commercial performance of the current trading activities
is better reflected, and provides investors and other users of the accounts with an improved view of likely future performance by making the
following adjustments to the IFRS results for the following reasons:
-
-
-
The add back of tax incurred by joint ventures and associates. The Board believes the incorporation of the gross result of these entities
provides a fuller understanding of their combined contribution to the Group performance.
The add back of share-based payments. This charge is a calculated using a standard valuation model, with the assessed non cash
cost each year varying depending on new scheme invitations and the number of leavers from live schemes. These variables can create
a volatile non-cash charge to the income statement, which is not directly connected to the trading performance of the business.
Non-recurring items. The Group’s accounting policies include the separate identification of non-recurring material items on the face
of the income statement, which the Board believes could cause a misinterpretation of trading performance if not disclosed. During
2017, these exceptional items were the write off of an unlisted investment in a business which went into administration and certain
non-cash costs related to the dissolution of dormant subsidiaries to facilitate a simplified corporate Group structure.
Reported losses from discontinued operations, relate to the administration of the Just for Pets Limited business in October 2017, an extremely
difficult decision following a review of its prospects under deteriorating trading conditions. This course of action was taken in the best interests of
all stakeholders in that business, including employees, creditors and Wynnstay shareholders, and followed a period of accelerating losses after
the devaluation of Sterling in 2016. This process led to the eventual sale of 18 stores and the transfer of nearly 200 colleagues to the acquiring
business, and protects the future trading results of the Group from the likely continuing losses that were occurring in that entity. The total charge
related to the discontinuation of the activity amounted to £6.59m, and is detailed in note 11 of the accounts.
Taxation
The Group’s tax charge on continuing operations, including joint ventures and associates, of £1.43m (2016: £1.46m) represents 18.5% (2016:
20.2%) of the Group pre-tax profit from continuing operations of £7.73m (2015: £7.23m). No relief has been provided for in relation to the charges
for discontinued operations, as these are likely to be treated as being of a capital nature. A reconciliation relating to Group’s tax charge and Group
pre-tax profit is given below:
£000’s
2017
2016
Group’s tax charge
Taxation
Share of tax incurred by associates and joint ventures
Group pre-tax profit from continuing operations
Profit before taxation from continuing operations
Share of tax incurred by associates and joint ventures
1,359
70
1,429
7,664
70
7,734
1,436
26
1,462
7,207
26
7,233
23
Wynnstay Group Plc
Finance Review continued
A reconciliation to reported (loss)/profit for the year is as follows:
£000’s
2017
Group pre-tax profit from continuing operations
(Loss)/profit for the year from discontinued operations
Group pre-tax profit
Group’s tax charge
(Loss)/profit for the year
7,734
(6,586)
1,148
(1,429)
(281)
2016
(Restated)
7,233
58
7,291
(1,462)
5,829
Earnings Per Share and Dividend
Balance Sheet
Basic earnings per share from continuing
(2016: 29.71p),
operations were 32.29p
based on a weighted average number of
shares in issue during the year of 19.529m
(2016: 19.425m). The Board proposes to
recommend the payment of a final dividend
of 8.40p per share to be paid on the 30
April 2018, which when added to the interim
dividend of 4.20p per share paid on the 31
October 2017, makes a total of 12.60p for
the year (2016: 12.00p), an increase of 5.0%.
The total dividend is expected to be covered
2.56 times (2016: 2.50 times) by earnings
from continuing operations. The total dividend
represents the fourteenth consecutive year
of payment growth since the business was
floated on the Alternative Investment Market
of the London Stock Exchange in 2004.
The Board has noted the current dividend
cover which is now below historical levels,
but still within a range which can support
the continuing progressive policy. Current
Company distributable
reserves amount
to £14.19m, which are adequate to cover
at least five years of current level dividend
payments. Adequate
cash
resources and future generation assumptions
also support the Board’s view that the current
policy is sustainable. A process of subsidiary
dividend payments to the parent Company is
now established to ensure adequate liquidity
and capital are available to support the policy.
The Board will continue to monitor dividend
cover ratios when assessing future payment
recommendations.
anticipated
Share Capital
During the year a total of 170,185 (2016:
104,229) new ordinary shares were issued for
a total equivalent cash amount of £0.723m
(2016: £0.435m). A total of 110,896 (2016:
26,800) shares were issued in relation to the
exercise of employee share options for a total
consideration of £0.378m (2016: £0.068m),
and the remaining 59,289 (2016: 77,429)
shares were issued to existing shareholders
exercising their right to receive dividends in the
form of new shares, with an equivalent cash
value of £0.345m (2016: £0.367m).
Group net assets at the year end amounted
to £85.39m (2016: £86.95m). Based on the
weighted average number of shares in issue
during the year of 19.529m, (2016: 19.425m)
this represented a net asset value per share of
£4.37 (2016: £4.48). During the financial year
the share price traded in a range between
a high of £6.67 in March 2017 and a low
of £4.55 in October 2017. Based on these
balance sheet values, Return on Net Assets
from continuing operations for the year was
9.4% (2016 restated: 8.4%).
Capital investment in fixed assets amounted
to £2.74m (2016: £3.98m) which was lower
than initially budgeted as some projects have
been delayed through the necessary planning
processes, and will now be completed during
the new financial year, resulting in an expected
higher level of investment in this period.
Net Working Capital, which is defined as, the
net of inventory, trade and other receivables
and trade and other payables, showed a
10% increase as at the year end, standing at
£40.3m (2016: £36.5m), which was primarily
caused by the inflationary impact referred to
earlier, partially offset by the reduction related
to the discontinued operations.
Cashflow, Net Cash and Banking
Facilities
Facilities
The business remains strongly cash generative,
despite having to absorb the higher levels of
working capital created by the expansion in
activities and commodity inflation. Net cash
at the year end has increased to £4.51m
from £4.28m, after absorbing the increased
working capital requirement referred to above
of £3.8m. The year end does represent a
traditionally low point in the Group’s cash
utilisation cycle, and therefore the Board
continues to prioritise the maintenance of
adequate debt facilities to accommodate the
usual spring peak of this seasonal fluctuation,
together with any unexpected commodity
price volatility. Utilisation of bank facilities has
been limited during the year, but a total of
committed and short term facilities of £17.0m
remained in place at the year end (2016:
£17.9m), which the Board believes should
exceed any actual requirement.
24
Key Performance Indicators
The performance of the business is regularly
monitored against financial Key Performance
Indicators (KPI’s), defined as follows:
Revenue:
Earnings per
share:
Return on
Net Assets:
Net Asset
per share:
The invoiced value of sales
from
the Group’s activities,
measured at a fair value net of
all rebates and excluding value
added tax.
Profit for the year after taxation
divided by
the weighted
average number of shares in
issue during the year excluding
any shares held by the Group’s
Employee Share Ownership
Trust.
Group pre-tax profit, including
share of pre-tax profits of joint
ventures and associates before
intangible amortisation, share-
based payment charges or
exceptional costs, divided by
the balance sheet net asset
value.
The balance sheet net asset
value, divided by the weighted
average number of shares in
issue during the year, excluding
any shares held by the Group’s
Employee Share Ownership
Trust.
Underlying
Pre-tax profit:
Pre-tax
Underlying
profit
includes the Group’s share of
pre-tax profit from joint ventures
and associate investments but
excludes the exceptional item
and share-based payments.
Relevant results for these KPI’s, for the year
under review and the prior year comparatives
have been disclosed earlier in this Report.
Paul Roberts
Finance Director
30 January 2018
www.wynnstay.co.uk
Risk Management Statement
For the year ended 31 October 2017
The Group adopts a risk approach appropriate
to the business activities being conducted,
and the Board retain responsibility for regularly
reviewing
strategies.
risk management
Risks and uncertainties for the business are
classified into two main categories, Financial
and Operational, and the Board monitor such
risks having developed policies for managing
the uncertainties they bring. The monitored
risk categories and the main policies for
control are as follows:
levels, and the Group therefore has to maintain
adequate financial resources to accommodate
unexpected, but foreseeable trading patterns
and conditions. The Group has historically
operated with banking facilities that provide
healthy headroom above
the anticipated
maximum requirement as projected in working
capital cycle forecasts. This policy continues,
and debt facilities are in place with HSBC
Bank Plc which includes a significant element
of committed facilities through to 2020.
Financial Risk Management:
The Group policies for managing treasury risks
are developed and approved by the Board and
are designed to minimise exposure to market
volatility they include:
Interest Rate – While currently most of the
Group’s term debt is floating base rate linked,
the Board constantly reviews its option to fix
the rates attached to this debt through the
use of interest rate swap derivatives. Fixed
rate term finance is generally used for the
acquisition of vehicles.
Foreign Currency – The main currency related
risk to the Group arises from the forward
purchasing of imported raw materials for
our Glasson business. This risk is mainly
managed by entering into currency purchase
agreements at
the underlying
transaction is completed. The fair value of
these contracts is not material. As at the
year end the principal amounts relating to
forward purchased currency contracts were
£8,529,816 (2016: £6,342,105).
time
the
Commodity Price - While the Group does
not engage in the taking of speculative
commodity positions, it does have to make
significant forward purchases of certain raw
materials, particularly for use in its animal feed
manufacturing activities. Position reporting
systems are in place to ensure the Board is
appraised of the exposure level on a regular
basis, and where necessary hedging tools,
primarily wheat futures contracts on the
London LIFFE market, are used to manage
price decisions.
Credit – A significant proportion of the Group’s
trade is conducted on credit terms and as
such a risk of non payment is always present.
Detailed systems of credit approval before
initial supply, the operation of credit limits and
an active credit control policy act to minimise
this risk and historically the incidence of bad
debts is low. The grain trading business has
exposed the Group to certain substantial
customer credit balances, and to assist
in mitigating this perceived risk, a credit
insurance policy has been purchased to
provide partial cover against default by certain
customers.
Finance Availability – Fluctuating commodity
prices can adversely impact working capital
Internal Controls – As the Group operates
across a number of different markets in both
its Agriculture and Specialist Retail segments,
strong internal controls are required to ensure
the business is not exposed to financial
irregularities or losses that are not readily
identifiable. Such controls include policies for
the proper authorisation of the procurement of
all products and services, and the sanctioning
of expense expenditure and employment
costs. These policies are principally controlled
by the Management Boards of the operating
subsidiaries of the Group, who meet on
a regular routine basis. The Group Chief
Executive and Finance Director attend all
these meetings and undertake business and
financial reviews of subsidiary activity with
particular attention paid to the monitoring of
actual performance against budget.
Operational Risk Management:
Trading concerns are regularly reviewed in
routine Management Board meetings of the
operating subsidiaries of the Group, with
conclusions reported to the Board. Existing
identified risks include:
Customer Loss and Competition – There is a
constant risk of customer loss from increasing
competition in the agricultural sector as the
industry continues to consolidate. The Group
continues to counter this risk by pursuing a
sensible growth strategy to increase its market
share primarily through geographic expansion
and acquisitions. The Group specifically seeks
to maintain a broad spread of activities across
the main agricultural input areas to minimise
threats affecting any particular
farming
enterprise. Significant investment continues in
the Company’s sales channels, both in terms
of the traditional direct teams and new trading
desk facilities.
Brexit – The decision for the UK to exit the
EU has created a considerable amount
the
throughout
of business uncertainly
whole economy, exacerbated within
the
agricultural sector due to the importance
of the Common Agricultural Policy (CAP) to
the income of many farmers. Some relief to
the specific uncertainty was provided by the
UK government announcement, in August
2016, that it would guarantee the same
level of funding for farmers after an EU exit
and through to 2020. This political support
timeframe was then subsequently extended
to the end of the current parliament in 2022
by the re-elected Conservative government
following a manifesto commitment. Further
information from the government, detailed
at the Oxford Farming Conference, indicates
funding maybe extended to 2024. It is also
likely that future funding will switch emphasis
from the current acreage bases to focus on
production and environmental aspects, with
a recognition of issues faced by farmers
in the less favoured areas. The variation in
changes to the incomes of certain categories
of customers as a result of structured support
payments could impact the performance
of some product group income streams
for the business. The Board will continue to
monitor developments and any new policy
indications issued by government with a view
to formulating appropriate responses at the
earliest opportunity.
Sterling Appreciation – Following the Brexit
referendum decision in June 2016, the most
immediate
impact affecting the business
related to the fall in the value of Sterling,
which while having an adverse effect on some
input costs such as fuel, it also created an
immediate improvement in the value of many
farm products, particularly grain. Additionally
a lower exchange rate also benefited farmer
customers who were in receipt of EU support
payments calculated at fixed Euro rates
across the community. When translated into
Sterling, as the payments are received in the
UK, this resulted in higher level of income than
in previous years. Over the last year, there has
been some appreciation in the value of Sterling
against the US dollar, but limited movement
against the Euro. Any marked appreciation
against these important currencies is likely
to be detrimental to the overall income of the
Group’s farmer customer base, and therefore
could adversely
for the
Company’s products.
impact demand
World Commodity Prices – During 2015 and
2016, the value of grain and dairy commodities
was depressed on a worldwide basis. This
was a result of cyclical over production
which coincided with geo-political issues
such as the Russian ban on the importation
of Western food products and the reduction
in Chinese demand, which followed a period
of economic uncertainty in that critically
important import market. The effect of this
global price weakness was immediately felt in
the UK, where farmers responded by reducing
costs and slashing production. The resultant
fall in demand for many product categories
had a detrimental impact on the Group’s
activities and took some time to recover as
confidence only slowly returned as prices
eventually improved. The Board therefore
acknowledges that the Group’s performance
can sometimes be affected by circumstances
beyond its control, but acts to minimise
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Wynnstay Group Plc
Risk Management Statement continued
For the year ended 31 October 2017
industry
local authorities, and
regulated
registrations required to legally supply certain
product categories. The Group manages
these obligations through a process of having
a named individual with specific responsibility
for each type of approval, who can provide
regular updates on issues connected with that
obligation to the appropriate Management
Board Meeting.
to
this supply would damage
Supply Chain Efficiency – The Group’s
considerable inventories both in the retail
businesses and as raw materials for the
manufacturing activities are vital
the
success of the organisation, and disruption
to
revenue
streams. To minimise this risk, the Group
operates partnership
relationships with
as many suppliers as possible which
endeavour to ensure that optimum stock
levels are maintained in Group warehouses,
in wholesaler locations or within committed
supplier facilities. A project team works to
optimise stock turn ratios while ensuring
adequate availability
through challenging
seasonal cycles.
Reputation – The Group’s trading philosophy
is to seek to be the “Supplier of Choice” to
its customers. To achieve this, a reputation
for quality products, service and value for
money must be maintained. Through a
Information and
comprehensive employee
Consultation policy, all members of staff
and
tasked with
enhancing the Group’s reputation in the eyes
of customers and all other stakeholders of
the business. The Group’s corporate plan is
communicated to management at various
levels within the business to facilitate a strong
understanding of
the ethos and culture
necessary for continued success.
local management are
general
– Difficult
economic
Fraud
circumstances, evolving
trading channels
and new methods of communication with
customers and suppliers may increase the
risk of fraud being perpetrated on the Group.
The Board has recognised this increased
risk, and continually reviews internal systems
and controls, addressing areas of identified
weaknesses including any matters raised as
part of the Group audit process.
Paul Roberts
Finance Director
30 January 2018
such risks through its policy of maintaining a
diverse product offering, of appeal to a wide
cross section of farming enterprises, so that
a severe issue in one sector does not impact
the entire Group.
feed business
Manufacturing Productivity – Much of the
Group’s
is conducted on
a customer “made to order” basis. This
requires sophisticated order processing,
manufacturing and delivery systems, as
low lead times can provide a competitive
advantage. The breakdown of any of
these systems, through mechanical fault,
weather and traffic disruption, or computer
malfunctions and errors can create the risk
of order fulfilment failure. The Group protects
against this through the operation of multiple
supply points, with third party manufacturing
arrangements in place, and the back up
of all IT systems supported with a disaster
recovery plan. The increasing use of Customer
Relationship Management
(CRM) systems
allow for higher levels of pre-emptive order
processing, thereby encouraging customer
retention. Efficient manufacturing and quality
control compliance regimes, independently
audited from time to time, also contribute
to minimising the risks of such productivity
failures.
social
corporate
Environmental – In accordance with the
responsibility
Group’s
commitments, all activities are planned so as to
limit environmental risks and adverse impacts,
but a number of larger operating sites require a
specific Environment Agency regulated permit
to carry out certain activities. The continued
efficient conduct of such activities on those
sites is therefore dependent on compliance,
to the regulator’s satisfaction, with the specific
terms of the permits which have been issued.
Non-compliance with permit terms could
result in the prohibition of regulated activities
at those locations, thereby adversely affecting
the Group’s ability
to conduct business
connected to those activities. To effectively
manage these situations and minimise risks
of non-compliance the Board oversees the
operations of an Environment & Regulatory
Compliance Management Committee, which
consists of a number of senior managers
within the Group who have specific experience
and responsibilities for the activities carried
out on the regulated sites.
Licensed Activities – The Business requires
a considerable number of governmental
and other regulatory authority approvals and
licences to conduct many important activities
within the Group’s operations. The loss for
whatever reason of any such approval or
licence could have a detrimental impact on
part or all of the performance of the Business.
Such examples might include commercial
vehicle operators and consumer credit licences
issued by national regulators, explosive and
other hazardous goods licences issued by
26
www.wynnstay.co.uk Risk Management Statement continued
Board and Advisors
Directors
J J McCarthy
B P Roberts
K R Greetham
D A T Evans
P M Kirkham
H J Richards
S J Ellwood
Company Secretary
B P Roberts
Company Number
2704051
Registered Office
Eagle House
Llansantffraid Ym Mechain
Powys
SY22 6AQ
Auditor
KPMG LLP
8 Princes Parade
Liverpool
L3 1QH
Principal Bankers
HSBC Plc
Wales Corporate Banking Centre
15 Lammas Street
Carmarthen
SA31 3AQ
Nominated Advisor and Stockbroker
Shore Capital Limited
Bond Street House
11 Clifford Street
London
W1S 4JU
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Solicitors
Harrisons Solicitors LLP
11 Berriew Street
Welshpool
Powys
SY21 7SL
DWF LLP
5 St Paul’s Square
Liverpool
L3 9AE
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Wynnstay Group Plc
Business snapshot
Investment
Formulated Feeds - specialist service and support
Customer
Service
Product
Range
Wynnstay has a full range of high quailty poultry feeds. Throughout the whole period of
lay Wynnstay’s experienced team offer specialist on site support to poultry enterprises,
including housing management, establishing lighting patterns, weight monitoring
and feeding routines. Wynnstay’s specialist support and formulated feeds ensures
outstanding egg production from the flock.
Growth
Wynnstay’s
specialist support
and formulated
feeds has ensured
outstanding egg
production from
the flock
28
www.wynnstay.co.uk Corporate
Governance
Board of Directors
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Independent Auditor’s Report
Page
30 - 31
32 - 33
34 - 36
37 - 40
41 - 44
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Wynnstay Group Plc
Board of Directors
Kenneth Richard Greetham
Chief Executive
Age 58
Ken joined the Board in 2008 when he became Chief Executive.
He joined Wynnstay in 1997 following the integration of
Shropshire Grain and was responsible for the development of the
Group’s arable activities.
Bryan Paul Roberts
Finance Director
Age 54
Paul joined the Board in 1997 when he also became Company
Secretary. He originally joined the Company in 1987 having
previously worked in the animal feed industry. He is a Fellow of
the Chartered Institute of Management Accountants.
James John McCarthy
Chairman
Age 62
Jim joined the Board in July 2011 and was appointed Chairman
of the Group in November 2013. He has a wealth of corporate
and management experience from a background in the retailing
industry which spans over 40 years. He retired as Chief Executive
Officer of Poundland Limited in 2016.
David Andrew Thomas Evans
Retail Director
Age 49
Andrew joined the Board in 2008 and has executive responsibility
for all the Group’s retail activities. He is also a dairy farmer in Mid
Wales.
30
www.wynnstay.co.uk Philip Michael Kirkham
Vice-Chairman / Senior Independent
Non-Executive Director
Age 60
Philip joined the Board in April 2013. He runs a mixed farming
business in the West Midlands and also has significant
experience in the UK livestock sector. He is Non-Executive
Chairman of National Milk Records Plc and Meadow Quality Ltd.
Howell John Richards
Non-Executive Director
Age 53
Howell joined the Board in July 2014. He has significant
experience within the agricultural supply industry and has
established a large dairy enterprise in South Wales. As a member
of a number of well recognised committees Howell promotes the
UK dairy industry and supports initiatives for young entrants into
UK farming.
Stephen Ellwood
Non-Executive Director
Age 60
Steve joined the Board in January 2016. He has a wealth of
experience within the UK agriculture and agri-food sectors after
spending 10 years as Head of Agriculture at HSBC, following on
as Head of Food and Agriculture at Smilth & Williamson for four
years. Steve is now an active Non-Executive Director at four agri-
food businesses.
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Wynnstay Group Plc
Directors’ Report
For the year ended 31 October 2017
The Directors present their report together
with the audited financial statements of the
Parent Company (“the Company”) and the
Group for the year ended 31 October 2017.
Wynnstay Group Plc (“the Company”) is a
public limited company incorporated and
domiciled in the United Kingdom under the
Companies Act 2006.
The address of the Company’s registered
office is Wynnstay Group Plc, Eagle House,
Llansantffraid-Ym-Mechain, Powys, SY22
6AQ.
The Company has its primary listing on AIM,
part of the London Stock Exchange.
financial
statements were
The Group
authorised for issue by the Board of Directors
on 30 January 2018.
information on
Further
the activities of
the business and the Group strategy are
presented in the Chairman’s Statement, Chief
Executives’ Review, Strategic Report and
Corporate Governance Report included within
the Group’s full published Annual Report.
Directors and their Interests
The Directors of the Company who held office during the year and their interests in the share capital
of the Company at the year end were as follows:
25p Ordinary Shares
SAYE Options
Discretionary Options
J J McCarthy
S.J. Ellwood
2017
5,000
-
2016
5,000
-
B P Roberts
101,498
100,175
K R Greetham
D A T Evans
P M Kirkham
H J Richards
45,203
20,544
1,000
-
45,203
20,120
1,000
-
2017
2016
2017
2016
-
-
2,806
6,425
3,243
-
-
-
-
4,129
6,425
3,243
-
-
-
-
8,000
8,000
8,000
-
-
-
-
31,000
31,000
26,000
-
-
In addition to the above shareholdings, Mr B P Roberts and Mr K R Greetham are trustees of the
Company’s Employee Share Ownership Plan trust, which at the year end held 8,724 shares (2016:
55,841 shares). Accordingly these Directors were deemed to hold an additional non-beneficial
holding in such shares.
No Director at the year end held any interest in any subsidiary or associate company. Biographical
details of the Directors are set out before the Director’s Report.
Share Capital
Directors’ Appointments and Retirements
The movement in the share capital during the
period is detailed in note 28 to the financial
statements.
Results, Dividends and Transfers to
Reserves
Reserves
Reported under
the Group profit
IFRS
before taxation from continuing operations
is £7,664,000 (2016: restated £7,207,000).
After a
taxation charge of £1,359,000
(2016: restated £1,436,000), and loss on
discontinued activities of £6,586,000 (2016:
profit £58,000) the Group loss for the year is
£281,000 (2016: profit £5,829,000).
The Directors recommend a final ordinary
dividend of 8.40p per ordinary 25p share net
(2016: 8.00p per ordinary 25p share net), to
be paid on 30 April 2018 to shareholders on
the register at the close of business on 3 April
2018.
The share price will be marked ex dividend
with effect from the 29 March 2018. In
accordance with the rules of the Company’s
Scrip Dividend Scheme, eligible shareholders
will be entitled to receive their dividend in the
form of additional shares. New mandate forms
for this scheme should be signed and lodged
with the Company Secretary 14 days before
the dividend payment date of 30 April 2018.
Land and Buildings
In the opinion of the Directors, the current
open market value of the Group’s interest
in land and buildings exceeds the book
value at 31 October 2018 (refer to note
17) by approximately £3,760,000
(2016:
£3,990,000).
Under Article 91, Mr J J McCarthy and Mr H J Richards retire from the Board by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves for re-election.
Directors’ and Officers’ Liability Insurance
During the year the Company purchased and maintained liability insurance for its Directors and
Officers which remained in force at the date of this report.
Substantial Shareholdings
At 31 October 2017, the following shareholders held 3% or more of the issued share capital of the
Company:
Registered Shareholder
Beneficial Holder
Ferlim Nominees Limited
11.1%
Discretionary managed funds of Investec Wealth &
Investment Limited
Chase Nominees Limited
Bank of New York Nominees
Limited
6.2%
5.0%
Schroder Investment Management Limited
Discretionary managed funds of Brown Shipley Private
Bank
Goldman Sachs Securities Limited
4.6%
Polar Capital
Lion Nominees Limited
4.0%
Discretionary managed funds of Close Asset
Management Limited
The Directors are not aware that any other person, Company or Group of Companies held 3% or
more of the issued share capital of the Company.
Employees
The Group has procedures for keeping its employees informed about the progress of the business.
The Group continues to encourage employee motivation by operating a Savings Related Share
Option Scheme open to all employees. The Group provides training and support for all employees
where appropriate, and gives a full and fair consideration to disabled applicants in respect of duties
which may be effectively performed by a disabled person. Where existing employees become
disabled, the Group will seek to continue employing them, bearing in mind their disability and
provided suitable duties are available. Failing this, all attempts will be made to provide a continuing
income. Health and Safety matters are a high priority issue for the Board, who consider a monthly
report on developments and any incidents that may have occurred, including accidents and near
misses.
32
www.wynnstay.co.uk Policy for Payment of Creditors
The Group agrees terms and conditions with
suppliers before business takes place and,
while there is no Group code or standard it is
not Group policy to extend supplier payment
terms beyond that agreed. There are no
suppliers subject to special arrangements.
The average credit terms for the Group as a
whole based on the year end trade payables
figure and a 365 day year is 52 days (2016:
47 days).
Auditor Reappointment
KPMG LLP have indicated their willingness
to continue
in office and accordingly a
resolution proposing their reappointment will
be submitted to the Annual General Meeting.
The Board have decided that after a tenure
of six years it would be appropriate to carry
out a competitive tender for the Group
audit for 2018. KPMG LLP have expressed
their willingness to be considered in the
competitive review, but have agreed to resign
should they be unsuccessful, which would
enable the Directors to appoint a new auditor
in accordance with section 489(3)(c) of the
Companies Act 2006.
Disclosure of Information to Auditor
The Directors who were members of the Board
at the time of approving the Directors’ Report
are listed on page 27. Having made enquires
of fellow Directors each of these Directors, at
the date of this report, confirms that:
•
•
to the best of each Director’s knowledge
and belief, there is no relevant audit
information of which the Group’s auditor
is unaware; and
each Director has taken all the steps a
Director might reasonably be expected
to have taken to be aware of relevant
audit information and to establish that
the Group’s auditor is aware of that
information.
This confirmation is given and should be
interpreted in accordance with the provisions
of s418 of the Companies Act 2006.
Statement of Directors’ Responsibilities in
Respect of the Annual Report and Accounts,
Strategic Report and Directors’ Report and
the Financial Statements
The Directors are responsible for preparing
the Annual Report and Accounts, Strategic
Report and Directors’ Report and the financial
statements in accordance with applicable law
and regulations.
law
requires
the Directors
to
Company
prepare Group and Parent Company financial
statements for each financial year. Under
that law they have elected to prepare both
the Group and the Parent Company financial
statements in accordance with IFRSs as
adopted by the EU and applicable law. As
required by the AIM Rules of the London Stock
Exchange they are required to prepare the
Group financial statements in accordance with
IFRSs as adopted by the EU and applicable
law and have elected to prepare the Parent
Company financial statements on the same
basis.
Under Company law the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and Parent
Company and of their profit or loss for that
period. In preparing each of the Group and
Parent Company financial statements, the
Directors are required to:
•
select suitable accounting policies and
then apply them consistently;
• make judgments and estimates that are
reasonable and prudent;
•
•
state whether they have been prepared
in accordance with IFRSs as adopted by
the EU; and
the financial statements on
prepare
the going concern basis unless it is
inappropriate to presume that the Group
and the Parent Company will continue in
business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Parent Company’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Parent Company and enable them to
ensure that the financial statements comply
with the Companies Act 2006. They have
general responsibility for taking such steps as
are reasonably open to them to safeguard the
assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing
a Directors’ Report, Corporate Governance
Statement and Directors Remuneration
Statement that complies with that law and
those regulations
for
responsible
The Directors are
the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Legislation in the United
Kingdom governing
the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
By order of the Board
Paul Roberts
Finance Director
30 January 2018
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Wynnstay Group Plc
Corporate Governance Statement
For the year ended 31 October 2017
The Principles of Good Governance
The Board is committed to high standards
of corporate governance. The adoption and
maintenance of good governance is the
responsibility of the Board as a whole, who
have considered the twelve principles of good
practice published in the QCA Corporate
Governance Guidelines for Smaller Companies
introduced
in 2013. The Board believes
that it has incorporated these principles in
formulating a Corporate Governance policy
appropriate to the size of the Group, and
which can provide comfort for the Company’s
numerous and widespread shareholder base
who have the right to expect the highest
possible level of standards. The Directors are
pleased to provide the following information:
The Board of Directors
in
The Board currently comprises seven
directors, three of whom are executive and
four non-executives. The roles of Chairman
and Chief Executive are separated. The
Chairman is non-executive and is elected by
the whole Board on an annual basis, with Mr
J J McCarthy originally appointed to this role
in November 2013. The executive directors
all have considerable experience
the
agricultural supply industry and have spent
much of their careers with the Group, providing
a significant degree of management continuity.
The non-executives bring a range of business
and commercial expertise to the Board,
including direct agriculture and specialist retail
skills, and are all deemed independent under
the Guidelines. Mr P M Kirkham, having been
appointed in April 2013 is deemed the Senior
independent non-executive. The Chairman
is responsible for the periodic performance
reviews of the Board, its sub-committees and
non-executive directors. In June 2017, the
Senior independent non-executive conducted
a Board evaluation exercise, considering the
structure, governance, operating dynamics
and the risk management processes currently
in place. The conclusions of this exercise were
considered by the whole Board and deemed
improvement
satisfactory, with areas
scheduled
formal
schedule of matters requiring Board approval
is maintained, and covers such areas as
Group strategy, approval of financial budgets
and results, Board appointments, approval of
major capital expenditure and dividend policy.
The Board normally meet once a month with
additional meetings as necessary. Directors
are able, if necessary, to take independent
professional advice in furtherance of their
duties, at
the Company’s expense. All
directors and some senior members of staff
have adopted a set of guidelines in regard to
their responsibilities for the management and
conduct of the Company. The Board believes
that this structure, together with the operation
its sub-committees described below,
of
review. A
further
for
for
satisfies the flexible and effective management
elements of the QCA guidelines. Certain
relevant details of the contracts of employment
for the executive directors, and the letters of
appointment for the non-executive directors
are disclosed in the Director’s Remuneration
Statement.
BOARD COMMITTEES
Audit Committee
This Committee currently consists of three
non-executive directors: Mr P M Kirkham,
Mr H J Richards and is chaired by Mr S J
Ellwood, who through his previous banking
experience satisfies the guideline requirement
for a financially qualified member of an audit
committee. The Committee normally meets
three times a year as required. The Committee
has standard terms of reference which have
been formally approved by the Board, and
which include the supervision of the external
audit process and the effectiveness of the
internal financial controls. The
terms of
reference further task the Committee with
identifying and evaluating significant internal
and external risks faced by the Company,
and then making recommendations to the
Board on appropriate strategies for effectively
managing these risks. Such risks include:
• The reliability of internal and external
reporting systems;
• The safeguarding of assets
inappropriate use, loss and fraud;
from
•
Identifying and properly managing
liabilities;
• Compliance with
relevant
taxation
legislation and ensuring the Group
acts in accordance with its published
tax strategy; and
• Ensuring the business operates within
all applicable legislation and uses best
practice wherever possible.
three
times
The Audit Committee met
during the year and all committee members
attended. The Committee agreed the nature
and scope of the audit with the auditor and
their findings. The Committee
monitored
to
internal audit assignments
organise
test the operating effectiveness of internal
systems and controls. These assignments
are not completed by specific internal audit
employees, but appropriate members of
staff. The Committee has procedures in place
to enable it to meet with the auditor without
the presence of the Company’s management
and it formulates and oversees the Company
policy on maintaining auditor objectivity and
independence in relation to non audit services.
The policy is to ensure that the nature of the
non audit services performed or the fee income
relative to the audit does not compromise the
auditors’ independence, objectivity or integrity
and complies with ethical standards. Details
of such services and fees are provided in note
6 to the accounts.
Remuneration Committee
This Committee of the Board consists of Mr
J J McCarthy and Mr H J Richards and is
chaired by Mr P M Kirkham. The Committee
meets at least once a year and has standard
terms of reference in place which have been
formally approved by the Board. These
terms of reference include the formulation of
remuneration policies for executive directors
and senior managers, and the supervision
of employee benefit structures throughout
the Company. The Remuneration Committee
met twice during the year and all committee
members attended.
Nomination Committee
This Committee of the Board currently consists
of Mr J J McCarthy, Mr K R Greetham and is
chaired by Mr P M Kirkham. The Committee
meets at least once a year and has standard
terms of reference in place which have
been formally approved by the Board. The
Committee is tasked with reviewing the
leadership needs of the Company and making
recommendations to ensure the continuity of
such leadership through the identification,
evaluation and appointment of both executive
and non-executive directors.
The Nomination Committee met once during
the year and all committee members attended.
Relations with Shareholders
the
importance
The Board
recognises
its shareholders
of communicating with
and maintains dialogue with
institutional
shareholders and analysts, and presentations
are made when
results are
announced. Mr P M Kirkham is the nominated
independent non-executive Director who
makes himself available to shareholders who
may require independent Board contact, and
has done so, with a number of institutional
and other shareholders during the year.
financial
The Annual General Meeting is the principal
forum for dialogue with private shareholders
who are given the opportunity to raise
questions at the meeting. The Company
aims to send out notice of the Annual General
meeting at least 21 working days before the
meeting. Shareholders also have access to
the Company’s website at www.wynnstay.
co.uk.
Going Concern
The Directors have prepared the financial
statements on a going concern basis, having
satisfied themselves from a review of internal
budgets, forecasts and current bank facilities
that the Group has adequate resources to
34
www.wynnstay.co.uk continue in operational existence for the
foreseeable future.
arrangements are an ideal way of aligning staff
interests with those of other stakeholders.
Internal Control
for
the system of
The Board of Directors has overall
responsibility
internal
controls, including financial, operational and
compliance, operated by the Group and for its
effectiveness. Such a system can only provide
reasonable and not absolute assurance
against material misstatement or loss, as it is
designed to manage rather than eliminate the
failure to achieve business objectives.
The key procedures within
structure include:
the control
• Managers at all levels in the Group have
clear lines of reporting responsibility
within a clearly defined organisational
structure;
financial
exist with
reporting
• Comprehensive
procedures
budgets
covering profits, cash flows and
capital expenditure being prepared
and adopted by the Board annually.
Actual results are reported monthly to
the Board and results compared with
budgets and last year’s actual. Revised
forecasts are prepared as appropriate;
and
• There is a structured process for
appraising and authorising capital
projects
defined
authorisation levels.
clearly
with
Corporate Social Responsibility
The Directors recognise the importance of
managing the business in a responsible, fair
and ethical manner, and strive to engender
such values in every aspect of the Group’s
operations. Social,
and
sustainable considerations are taken into
account in the formulation of polices in the
following areas of activity:
environmental
Human resources – the relationship nature of
much of the Group’s trading activities makes it
heavily dependent on the quality and efficiency
of the personnel involved in the business.
People management and development
is therefore critical to the success of the
Company, and considerable effort and
investment is put into the recruitment, training,
welfare and support of all staff. The Group is
committed to creating a fair, enjoyable and
fulfilling work environment and has policies
to create opportunity, prevent
in place
discrimination,
engagement
encourage
and keep staff informed on aspects of the
business. All eligible employees are offered
the opportunity to become shareholders in
the business through regular invitations to
join sharesave schemes. The Board believes
that these tax effective and relatively risk free
to understanding
Modern slavery and human trafficking –
following the introduction of the Modern
Slavery Act 2015, the Group prepared an
initial statement, published in December 2016,
regarding the procedures in place to limit the
risk of slavery or human trafficking events
occurring within its business and supply chain.
This statement set out Wynnstay’s current
approach
the potential
risks of such abuses, and the steps in place
and to be implemented, to prevent modern
slavery or human trafficking events occurring
within its own business and associated supply
chains. This statement relates to intentions
and actions taken during the financial year,
and the future development of procedures
for identifying risks and preventing abuses.
An updated statement is currently under
preparation.
The Wynnstay Board has committed to
preventing modern slavery and human
trafficking acts within its corporate activities,
and to ensure that its national and international
supply chains are free from such abuses.
Where possible the organisation prefers to
build long standing relationships with our
suppliers, where through a strengthening of
trading commitments, we can make clear
our expectations of business behaviour.
A review of primary trading partners has
been completed with a view to identifying
relationships where a risk may exist. This
categorisation approach is intended to allow
the Company to prioritise its limited resources
initially to any areas of perceived highest
threat. Engagement with these suppliers has
not identified any substantial risks to date.
Procurement policies have been updated to
include ethical and supplier codes of conduct
where appropriate, in addition to any usual
commercial contract terms. This process is
intended to be rolled out to all appropriate
supply relationships. Our procurement policy
is intended to comply with the Modern
Slavery Act 2015 and incorporates a risk
assessment protocol which identifies and
assesses potential risk within that particular
supply chain. Appropriate investigative and
auditing processes commensurate to the
scale of the enterprise and risk, are intended
to be executed as necessary. Our staff will be
provided with sufficient training enabling them
to identify risk and ensure the expectations
of the procurement policy and its associated
processes are understood at all levels across
the Group. All suspected cases of modern
slavery and human trafficking are requested to
be reported to the Head of Procurement, and
any such report will be investigated on a case
by case basis, with appropriate remedial action
taken immediately. The Board also recognise
that concerns about modern slavery are not
just limited to the Company’s supply chains,
but may also be a risk within the Group’s own
employment environment, and particularly
with regard to temporary or agency staff use.
A review of such hiring practises has taken
place, and a list of approved providers is
maintained.
Health and safety – the Group takes the
health and safety of its staff, customers and
everyone else involved with its activities very
seriously. All staff receive basic training and
where
individual roles require, additional
specialist support is provided. Occupational
health specialists are utilised
to screen
employees who operate in environments with
an added risk of exposure to noise, vibration
or other hazards that may cause harm.
The Group and subsidiary Boards routinely
consider health and safety matters and ensure
adequate resources are in place to enable
all personnel to fulfil their obligations in this
regard. The Audit Committee considers an
annual report on safety, risk and compliance
management and will require appropriate
action be taken where areas of concern are
identified. Reportable injuries (Riddor) during
the financial year numbered 4 across the
Group, which was a reduction on the previous
year when there were 5 incidents.
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tasked
the year
Sustainability and
limiting environmental
impact – the Group seeks to operate all
in a sustainable manner, and
activities
management are actively encouraged to
consider and minimise the environmental
impact of their operations. Energy usage is
recorded across the Group and reported
individual
for monitoring, with
centrally
departments
efficiency
improvement targets on a unit productivity
basis. During
the Group has
acted upon a number of the improvement
opportunities identified from the full audit
conducted in 2016 to comply with the Energy
Savings Opportunity Scheme managed by
National Resources Wales. LED
lighting
has been installed in at least 7 locations
during the year, and a number of electrical
motors have been replaced in manufacturing
plants to reduce electricity consumption.
Replacement
have been
compressors
installed in the Carmarthen feed mill and new
molasses storage equipment commissioned
at the Llansantffraid plant, all designed to
reduce environmental risks. Over the course
of the next year a significant capital project
is planned at Carmarthen to improve waste
water management on the site, which will
include improved water treatment facilities
and a water recycling lorry wash. Recycling
processes operate across the Group for
plastics, paper, cardboard, metal, wood,
electrical equipment and used oils. Fuel
efficiency is paramount in vehicle investment
decisions, and mileage management is a key
task for all fleet responsible personnel.
35
Wynnstay Group Plc
Corporate Governance Statement
Continued
Supporting the community – Making a positive
difference to the communities in which we
operate is important to the Group. We play
an active part in communities surrounding our
stores and business offices by supporting local
events, fundraising activities and community
to educational
groups. Offering support
establishments such as schools, colleges and
universities in the form of donations, group
visits and support with research projects is
of particular importance as we recognise the
significance of the future generation within the
industry. Alongside this we support the Royal
Agricultural Benevolent Institution (R.A.B.I)
and local Young Farmers Clubs in all regions
as our nominated charities, with donations
to these organisations last year amounting to
£5,912.
Additional Information and New Developments
– The Board regularly monitors developments
to Corporate Governance regulations and
processes appropriate to entities of its size.
The requirements of the new Anti Money
Laundering Directive have been noted and
the Company has now created a Register of
People with Significant Control, although as at
the date of this report, the Register contains
only the prescribed statement A that “The
company knows or has reasonable cause
to believe that there is no registrable person
or registrable relevant legal entity in relation
to the company.” The Group published a
Tax Strategy document in October 2017 in
accordance with new HMRC requirements,
and the Board fully supports such disclosure
principles. Data is currently being collated
towards complying with the new Reporting
on Payment Practise Regulations for which
the Company will become obliged to comply
with in 2018. System and process reviews are
well under way for the implementation of the
General Data Protection Regulations (GDPR)
in May 2018, with all appropriate staff currently
receiving initial training.
Auditor Independence
The Board
is satisfied that KPMG LLP
has adequate policies and safeguards in
place to ensure that auditor objectivity and
independence is maintained. The Company
meets its obligations for maintaining the
appropriate relationship with the external
auditors through the Audit Committee whose
terms of reference include an obligation to
consider and keep under review the degree
of work undertaken by the external auditor,
other than the statutory audit, to ensure such
objectivity and independence is safeguarded.
By order of the Board
Paul Roberts
Secretary
30 January 2018
36
www.wynnstay.co.uk Directors’ Remuneration Report
For the year ended 31 October 2017
BOARD REMUNERATION
Introductory Statement
As a Company listed on the Alternative Investment Market of the London Stock Exchange, the Company is exempt from the s420 obligation of the
Companies Act 2006 to prepare a directors’ remuneration report, and the s439 obligation to put a written remuneration policy to a shareholders
vote once every three years. However, the Board continues to believe that it should operate to the highest corporate governance standards
appropriate to companies of its size and resource availability. It is therefore pleased to provide the following voluntary information, and to refer to
the details of the director’s remuneration received during the year which can be found in note 9 to the Accounts which is provided in accordance
with AIM Rule 19. Details of Director’s current shareholdings are provided in the shareholding section of the Directors Report.
Board Remuneration Policy
All matters relating to remuneration of the Directors of the Company are determined by the Remuneration Committee whose decisions are made
with a view to achieving the broad objective of rewarding individuals for the nature of their work and the contribution they make towards the Group
achieving its strategic aims. Proper regard is given to the need to attract and retain high quality and motivated staff at all levels and to ensure the
effective management of the business. The Committee will be cognisant of comparative pay levels after taking into account geographic location
and the operations of the business.
The remuneration policy for Directors is set so as to achieve the above objectives and is broadly split into Executive and Non-Executive categories,
and consists of the following components in each sub category:
Executive Directors:
Element
Basic Salary
Purpose
Operation and Review
To attract and retain effective
management to implement
Group strategy.
Annual Performance
Bonuses
To reward delivery of pre-agreed
annual financial objectives.
Wynnstay Profit
Related Pay
To encourage achievement
of profit budgets within main
trading subsidiaries.
Pension and Death in
Service Life Assurance
To facilitate retention and
motivate effective management.
Reviewed by the Committee on an annual basis, consistent with annual
reviews conducted for all other employees. The current values of individual
approved salaries became effective from November 2017 and will be reviewed
again in November 2018. Details of the amounts currently being received are
shown in the table below. All salaries are paid monthly in arrears.
Individually constructed performance related schemes measured against
specific criteria agreed annually. Paid in the March following the financial year
to which the bonus relates, after completion of the annual audit.
Subsidiary company wide employee scheme to reward all staff with a pro-rata
profit share, based on a pre-set formula explained below. Paid in the February
following the announcement of the financial results for the previous year, after
completion of the annual audit.
Fixed Company contributions expressed as a percentage of current basic
salary for each individual paid into a personal pension scheme held in that
individual’s name. The death in service cover provides for four times current
annual salary paid into trust, where death occurs during the term of the
Director’s employment contract.
Benefits in Kind
Long Term Incentive
Plans
Other Share Schemes
To assist Directors in the
completion of their duties.
Benefits restricted to the provision of a company car and private medical
insurance.
To align executive rewards with
returns for shareholders and to
encourage executive retention
and strategic consistency.
Single fixed term schemes, generally running for a minimum period of three
years, with performance related conditions, where the maximum payout is
set at approximately one year’s basic salary paid in shares, at the end of the
scheme, based on the market value of those shares as at commencement.
To align executive rewards
with benefits available for other
managers in a tax efficient
manner.
HMRC Approved tax efficient share schemes as offered to other employees
which are also made available to executive directors on the same periodic
basis. These include discretionary Company Share Option Plans (CSOP) and
eligible Save As You Earn plans (SAYE).
The executive director’s remuneration terms are detailed in individual contracts of employment and associated amendment documentation, which
amongst other points contain standard details as follows:
-
-
-
-
-
Notice period to be given by the Company is twelve months.
Notice period to be given by the Director is six months.
Paid holiday entitlement of 23 days plus bank holidays, 24 days in the centenary year.
Post employment restrictive covenants lasting twelve months.
Standard non-compete restrictions during employment.
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Wynnstay Group Plc
Directors’ Remuneration Report continued
Non-Executive Directors:
Element
Purpose
Operation and Review
Basic Annual Fee
Travelling Expenses
To attract and retain a balanced
skill set of individuals to ensure
strong stewardship and
governance of the Group.
To reimburse legitimately
incurred costs of attending
necessary Board and associated
meetings.
Fees are set so as to reflect the factors pertinent to respective positions, taking
into account the anticipated amount of time commitment, and comparative
rates paid by other companies of a similar size. The Non-Executive Directors
do not participate in share option awards, performance bonuses or pension
arrangements. Fees are reviewed by the Remuneration Committee on an
annual basis.
Pre-set rates used to reimburse mileage, travel, accommodation and other
incurred expenses in line with those used for other employees.
Medical Insurance Benefit
in Kind
To assist Directors in the
completion of their duties.
Benefits restricted to the provision of private medical insurance for those
Directors who do not have alternative arrangements in place.
The non-executive director’s remuneration terms are detailed in individual letters of appointment, which amongst other points contain standard
details as follows:
-
-
-
Initial appointment for a period of twelve months.
Renewal of appointment for a fixed period of three years after initial twelve months.
Post employment restrictive covenants lasting twelve months.
REMUNERATION REPORT
Executive Director Remuneration
During the year the Board carried out a business review process, particularly with regard to future human resource requirements to support
the continued growth plans adopted for the business. This review identified that a number of senior commercial roles within the Group’s main
operating subsidiaries had remuneration levels that were adrift from comparative market rates. Accordingly a number of resultant amendments
were made to employment contracts of the individuals conducting these roles, and the Remuneration Committee consequently reviewed the
executive director pay structures and recommended increments effective from April 2017.
Therefore in line with the above policy, the Remuneration Committee have approved the following details of executive director remuneration:
-
Basic Salaries. A current annual salary effective from November 2017, is shown in the table below in column A. The previous annual
salary effective up to April 2017 is shown in column B, with the actual amounts received during the last financial year is shown in
column C.
Bonuses
Executive
Director
K R Greetham
B P Roberts
D A T Evans
Column A
Column B
Column C
Current Basic
Salary
£000’s
Previous Basic
Salary
£000’s
Actual Salary
Received
Nov 16 – Oct 17
£000’s
147
121
107
145
106
91
145
114
99
Annual Performance Bonuses and Profit Related Pay. The contractual bonus schemes for Mr K R Greetham and Mr B P Roberts are
based on a fixed percentage of the Group pre-tax Profit, which includes the Group’s share of pre-tax profits from joint ventures and
associate investments. The scheme for Mr D A T Evans is based on a fixed percentage of the pre-tax Profit of Wynnstay (Agricultural
Supplies) Limited. The respective bonus percentages, and the payments made for the financial year ending October 2016 are shown
in the table opposite in columns A and B respectively. The Executive Directors also participate in the Wynnstay Profit Related Pay
Scheme, (“PRP”) which is a scheme for employees of Wynnstay Group Plc and Grainlink Limited and which pays an annual bonus
based on a formula which produces a percentile result which is then applied to the relevant individual’s prior year earnings. The
formula calculation is the aggregate of the pre-tax profit of Wynnstay (Agricultural Supplies) Limited and Grainlink Limited divided by
the aggregate of the combined revenues, adjusted for a commodity inflationary index, and subject to a limiting factor preventing
the total paid under the scheme from exceeding 10% of the profits of the participating companies. The relevant rate for 2016, paid
in February 2017, was 2.9% (2016: 3.6%), with the actual PRP paid to each individual executive shown in Column C opposite. The
anticipated rate for 2017 relating to the last financial year is 3.0% of relevant earnings.
-
38
www.wynnstay.co.uk
Bonuses
Executive
Director
Column A
Column B
Column C
Annual bonus %
Bonus received
Mar 17
£000’s
PRP received
Feb 17
£000’s
K R Greetham
B P Roberts
D A T Evans
0.750%
0.550%
0.750%
54
40
38
6
5
4
The impact of the charges relating to the discontinuation of the Just for Pets Limited business will be reflected in the bonus calculations
of the Chief Executive and Finance Director for the year ending October 2017, which are due for payment in March 2018.
Pension and death in service life cover. Individual Company contributions to personal pension plans are based on the value of
the Executive Directors’ basic salary only. The annual defined Company contributions to a personal pension scheme held in the
individual’s name, expressed as a percentage of salary, and the amounts paid on behalf of each individual during the last financial
year, are shown in the table below under column A and column B respectively. The death in service life assurance cover is provided in
a Group policy covering all members, with individual costs attributed to separate members being unavailable. However the scheme
to which all three of the executive directors belong had a total renewal cost at November 2016 of £76,586 (2015: £72,523), and there
were 607 (2015: 550) members covered, equating to an average cost of £126 per person (2015: £132).
Pension
Executive
Director
K R Greetham
B P Roberts
D A T Evans
Column A
Column B
Pension %
Pension Contribution
£000’s
9.6%
9.6%
6.5%
14
10
6
Benefits in kind. Each Executive Director is supplied with a company car, primarily for the furtherance of their duties. However these
vehicles are available for the Executive’s private use and as such have a taxable benefit in kind value calculated in accordance with
HMRC rules. These values for the tax year ending April 2017 are shown in the table below in column A. Executives refund the cost of
fuel they use for private motoring on a monthly basis. Additionally the Company pays the cost of providing private medical insurance
for the Executives to ensure that should they require treatment this is provided as quickly as possible, and minimises any period of
potential absence from their duties. The cost to the Company of this cover for each individual in 2016 is shown below in column B.
Benefits in kind
Column A
Column B
Executive
Director
K R Greetham
B P Roberts
D A T Evans
Company
Car Value
£11,046
£9,279
£9,412
Private
Medical Cover
£761
£761
£761
Long Term Incentives. The Remuneration policy allows for a single long term incentive plan to be in place at any one time, with a
targeted overall maximum financial gain, over the life of the scheme, approximating to one years basic salary as at the beginning
of the scheme, for a 100% achievement of the performance criteria. The current long term incentive scheme matured in October
2017, having been implemented for Executive Directors in October 2014 in line with the policy criteria outlined above. The scheme
was structured as a Long Term Performance Related Unapproved Share Option Scheme, with options being exercisable within a six
month period commencing on the third anniversary of the grant date, providing the performance conditions have been satisfied. The
performance conditions related to the earnings per share (“EPS”) and market capitalisation (“MC”) of the Group as at October 2017,
with the minimum successful achievement required for any options to be exercisable being an EPS of 36p and a MC of £110m.
-
-
-
-
C
o
r
p
o
r
a
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e
G
o
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e
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e
39
Wynnstay Group Plc
Directors’ Remuneration Report continued
As the MC of the Group at the close of business on the 31st October 2017 was £97.8m, the minimum performance condition for this
scheme was not achieved, and as such, a nil award was receivable, and no benefits will be obtained by any participant.
In line with the Policy above, to have a single long term incentive plan in place at any one time, the Remuneration Committee intend
to introduce a new scheme for executive directors and certain other senior managers soon, but as at the date of this report, this
had not yet been effected. Therefore the number of current options under this element of the Remuneration Policy held by executive
directors is shown as nil in the table below :
Share Option Table
LTIP Schemes
Other Outstanding Options
Executive Director
Maximum Award
SAYE
CSOP
K R Greetham
B P Roberts
D A T Evans
No. of Options
No. of Options
No. of Options
Nil
Nil
Nil
6,425
2,806
3,243
8,000
8,000
8,000
-
Other Share Schemes. The executive directors participate in the discretionary Approved Company Share Option Plan (CSOP), which
is a tax efficient scheme providing the opportunity to hold up to £30,000 of option value, which, if the scheme rules and legislation
are complied with, can be exercised free of income tax liability for the holder. The current outstanding options are shown in the
table above, and are exercisable up to March 2022 without any performance criteria attached to them. Additionally the current
Executive Directors are eligible to participate in Save As You Earn (SAYE) option invitations, subject to the scheme and legislative
limitations. Such options held by the Executive Directors, as at October 2017 are shown in the table above, and again do not have
any performance criteria attached to them. Depending on the particular scheme, they are exercisable between September 2017 and
January 2022, with further details provided in the Director’s Report on page 32 and in note 9 to the accounts. During the year Mr B
P Roberts exercised 1,323 options at a price of £3.40 per share following the maturity of an existing Save As You Earn scheme.
Non-Executive Director Remuneration
The remuneration of the Non-Executive Directors, is and has been paid in accordance with the policy outlined above and has been set so as to
reflect the factors pertinent to their respective positions. Details of the amounts received during the last financial year and the current levels of
Basic Annual Fees being paid are given in the table below:
Non-Executive Director
Financial Year ending Oct 2017
2017 / 2018
Basic Fee
£000’s
Benefits
in kind
£000’s
Travelling
Expenses
£000’s
Current
Basic Fee
£000’s
Benefits
in kind
£000’s
J J McCarthy
P M Kirkham
S J Ellwood
H J Richards
50
34
34
34
-
1
-
1
1
1
1
1
50
34
34
34
-
1
-
1
P M Kirkham
Vice-Chairman and Chairman of Remuneration Committee
30 January 2018
40 www.wynnstay.co.uk
Independent auditor’s report
to the members of Wynnstay Group Plc
For the year ended 31 October 2017
1. Our Opinion is Unmodified
We have audited the financial statements of Wynnstay
Group Plc (“the Company”) for the year ended 31
October 2017 which comprise the Consolidated
Statement of Comprehensive Income, Consolidated
and Company Balance Sheets, Consolidated
and Company Statement of Changes in Equity,
Consolidated and Company Cash Flow Statements,
Principal Accounting Policies, and the related notes.
Overview
Materiality
group financial
statements as a
whole
£400k (2016: £400k)
5.0% (2016: 5.0%) of normalised
group profit before tax
Coverage
5.2% (2016: 5.5%) of normalised
group profit before tax
In our opinion:
Risks of material misstatement vs 2016
Recurring risk
Impairment of
Goodwill and
Investments
No change
- the financial statements give a true and fair view
of the state of the Group’s and of the parent
Company’s affairs as at 31 October 2017 and of the
Group’s loss for the year then ended;
- the group financial statements have been properly
prepared in accordance with International Financial
Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU);
- the parent Company financial statements have been
properly prepared in accordance with IFRSs as
adopted by the EU and as applied in accordance
with the provisions of the Companies Act 2006;
and
- the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs (UK)”)
and applicable law. Our responsibilities are described
below. We have fulfilled our ethical responsibilities
under, and are independent of the Group in accordance
with, UK ethical requirements including the FRC Ethical
Standard as applied to listed entities. We believe that
the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion.
41
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our audit opinion
above, the key audit matter was as follows:
Impairment of Goodwill and
Investments
(Group - Goodwill: £14.3 million; 2016:
£18.1 million; Company - Investments:
£13.1 million; 2016: £18.6 million).
Refer to page 25 (risk management
statement), page 52 (accounting policy)
and page 61 (financial disclosures).
The risk
Our response
Forecast-based valuation:
Our procedures included:
in an
The business operates
fluctuating
of
environment
competitor
prices,
commodity
activity and pressure on margins,
Therefore, the Group’s goodwill and
parent company’s investment values
are at risk of irrecoverability.
The estimated recoverable amounts
are subjective due to the inherent
uncertainty involved in forecasting
and discounting future cash flows.
Benchmarking assumptions:
Evaluating assumptions used, in
particular those relating to: i) the short
and long term growth rates; ii) future
changes in cash flows; and iii) the
discount rates used, by comparing these
with internally and externally derived
data and using our own valuation
specialists where applicable;
Sensitivity analysis: Performing
breakeven analysis on the key
assumptions noted above; and
Assessing transparency: Assessing
whether the group’s disclosures about
the sensitivity of the outcome of the
impairment assessment to changes
in key assumptions reflected the risks
inherent in the valuation of goodwill.
42
3. Our application of materiality and an overview of the
scope of our audit
Normalised profit before tax
£7,734k (2016: £7,233k)
Materiality for the group financial statements as a whole was
set at £400,000, determined with reference to a benchmark of
group profit before tax, normalised to exclude this year’s loss on
discontinued operations as disclosed in note 11, of £6.6 million,
of which it represents 5.2% (2016: 5.5%).
Materiality for the parent company financial statements as a
whole was set at £300,000 (2016: £300,000), determined with
reference to a benchmark of company net assets, of which it
represents 1% (2016: 1%).
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £20,000,
in addition to other identified misstatements that warranted
reporting on qualitative grounds.
Of the group’s 7 (2016: 7) reporting components, we subjected 7
(2016: 7) to full scope audits for group purposes.
The components within the scope of our work accounted for the
percentages illustrated opposite.
The remaining 1% of total group assets is represented by 5
reporting components (2016: 9), none of which contribute to
group revenue or group profit before tax and none of which
individually represented more than 1% of or total group assets.
For these residual components, we performed analysis at an
aggregated group level to re-examine our assessment that there
were no significant risks of material misstatement within these.
The work on all components, including the audit of the parent
company, was performed by the Group team. The Group
team applied the component materialities, which ranged from
£100,000 to £250,000, having regard to the mix of size and risk
profile of the Group across the components.
The group team performed procedures on the items excluded
from normalised group profit before tax.
Group Materiality
£400k (2016: £400k)
£400k
Whole financial statements
materiality (2016: £400k)
£250k
Range of materiality at 5
components (£100k-£250k)
(2016: £75m to £225k)
Normalised profit before tax
Group materiality
£20k
Misstatements reported to the
audit committee (2016: £20k)
Group revenue
Group profit before tax
100%
(2016 100%)
100
100
100%
(2016 100%)
100
100
Group total assets
Group normalised profit before
tax
1
1
99%
(2016 99%)
99
99
100%
(2016 100%)
100
100
Full scope for group audit purposes 2017
Specified risk-focused audit procedures 2017
Full scope for group audit purposes 2016
Specified risk-focused audit procedures 2016
Residual components
43
4. We have nothing to report on going concern
7. Respective responsibilities
We are required to report to you if we have concluded that the use
of the going concern basis of accounting is inappropriate or there
is an undisclosed material uncertainty that may cast significant
doubt over the use of that basis for a period of at least twelve
months from the date of approval of the financial statements. We
have nothing to report in these respects.
5. We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information presented
in the Annual Report together with the financial statements. Our
opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Strategic report and directors’ report
Based solely on our work on the other information:
- we have not identified material misstatements in the strategic
report and the directors’ report;
Directors’ responsibilities
As explained more fully in their statement set out on page 33,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and
fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue our opinion in an auditor’s report. Reasonable assurance
is a high level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
- in our opinion the information given in those reports for the
financial year is consistent with the financial statements;
and
8. The purpose of our audit work and to whom we owe our
responsibilities
- in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
6. We have nothing to report on the other matters on which
we are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
- adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
- the parent Company financial statements are not in agreement
with the accounting records and returns; or
- certain disclosures of directors’ remuneration specified by
law are not made; or
- we have not received all the information and explanations
we require for our audit.
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Will Baker
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
8 Princes Parade
Liverpool
L3 1QH
We have nothing to report in these respects.
30 January 2018
44
Financial
Statements
Consolidated Statement of Comprehensive Income
Consolidated and Company Balance Sheet
Consolidated and Company Statement of Changes in Equity
Consolidated and Company Cash Flow Statement
Principal Accounting Policies
Notes to the Financial Statements
Page
46
47
48 - 49
50
51 - 54
55 - 78
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45
Consolidated Statement of
Comprehensive Income
For the year ended 31 October 2017
2017
(Restated) 2016
Note
£000
£000
£000
£000
CONTINUING OPERATIONS
Revenue
Cost of sales
Gross profit
Manufacturing, distribution and selling costs
Administrative expenses
Other operating income
Group operating profit before intangible amortisation,
share-based payments, investment impairment and costs of
corporate restructuring
Intangible amortisation and share-based payments
Group operating profit before investment impairment and
costs of corporate restructuring
Investment impairment and costs of corporate restructuring
Group operating profit
Interest income
Interest expense
Share of profits/losses in associates and joint ventures accounted
for using the equity method
Share of tax incurred by associates and joint ventures
Profit before taxation from continuing operations
Taxation
Profit for the year from continuing operations
DISCONTINUED OPERATIONS
(Loss)/profit for the year from discontinued operations
(Loss)/profit for the year
Basic earnings per ordinary share (pence)
Profit from continuing operations
(Loss)/profit from discontinued operations
Diluted earnings per ordinary share (pence)
Profit from continuing operations
(Loss)/profit from discontinued operations
2
4
5
6
3
3
7
7
10
11
13
13
66
(219)
267
(70)
390,724
(337,835)
52,889
(40,009)
(5,335)
326
7,871
(156)
7,715
(95)
7,620
(153)
197
7,664
(1,359)
6,305
(6,586)
(281)
32.29
(33.72)
(1.43)
31.87
(33.29)
(1.42)
69
(208)
93
(26)
The prior year comparatives have been restated to reclassify the Just for Pets Limited operation discontinued during the year
ended 31 October 2017 as a discontinued operation (see note 11).
The notes on pages 51 to 78 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
46
353,726
(303,439)
50,287
(38,724)
(4,570)
364
7,357
(78)
7,279
-
7,279
(139)
67
7,207
(1,436)
5,771
58
5,829
29.71
0.30
30.01
29.51
0.30
29.81
www.wynnstay.co.uk
Consolidated and Company
Balance Sheet
For the year ended 31 October 2017
Registered Number 2704051
Group
Company
2017
£000
2016
£000
2017
£000
2016
£000
Note
ASSETS
NON-CURRENT ASSETS
Goodwill
Investment property
Property, plant and equipment
Investment in subsidiaries
Investments accounted for using equity method
Intangibles
CURRENT ASSETS
Inventories
Trade and other receivables
Financial assets
- loan to joint venture
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Financial liabilities - borrowings
Trade and other payables
Current tax liabilities
NET CURRENT ASSETS
NON-CURRENT LIABILITIES
Financial liabilities – borrowings
Trade and other payables
Deferred tax liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share premium
Other reserves
Retained earnings
Total Equity
14
16
17
18
18
15
20
21
19
24
25
22
23
25
22
27
28
14,266
2,372
18,709
-
3,444
95
38,886
30,056
62,961
2,844
8,914
104,775
143,661
(2,512)
(52,738)
(847)
(56,097)
48,678
(1,896)
(22)
(254)
(2,172)
(58,269)
85,392
4,916
29,529
3,319
47,628
85,392
18,147
2,372
20,535
-
3,457
109
44,620
31,344
50,316
2,786
10,111
94,557
139,177
(2,626)
(44,750)
(905)
(48,281)
46,276
(3,202)
(388)
(358)
(3,948)
(52,229)
86,948
4,874
28,848
2,933
50,293
86,948
-
2,372
7,748
12,828
259
-
-
2,372
7,808
18,182
409
-
23,207
28,771
-
30,318
2,844
1
33,163
56,370
(1,494)
(1,980)
-
(3,474)
29,689
-
30,417
2,786
1
33,204
61,975
(1,528)
(2,193)
(112)
(3,833)
29,371
(1,111)
(1,916)
-
-
(1,111)
(4,585)
51,785
4,916
29,529
3,150
14,190
51,785
-
-
(1,916)
(5,749)
56,226
4,874
28,848
2,764
19,740
56,226
The financial statements were approved by the Board of Directors
on 30 January 2018 and signed on its behalf.
The notes on pages 51 to 78 form part of these financial statements.
J J McCarthy – Director
B P Roberts - Director
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47
Wynnstay Group Plc
Consolidated Statement of
Changes in Equity
As at 31 October 2017
Group
At 1 November 2015
Profit for the year
Total comprehensive income for the year
Transactions with owners of the Company, recognised directly in equity:
Shares issued during the year
Own shares acquired by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
At 31 October 2016
Loss for the year
Total comprehensive loss for the year
Transactions with owners of the Company, recognised directly in equity:
Shares issued during the year
Own shares disposed of by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
Share
capital
£000
Share
premium
account
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
4,848
28,439
2,890
46,678
82,855
-
-
26
-
-
-
26
-
-
409
-
-
-
409
-
-
-
(20)
-
63
43
5,829
5,829
5,829
5,829
-
-
(2,214)
-
(2,214)
435
(20)
(2,214)
63
(1,736)
4,874
28,848
2,933
50,293
86,948
-
-
42
-
-
-
42
-
-
681
-
-
-
681
-
-
-
244
-
142
386
(281)
(281)
(281)
(281)
-
-
(2,384)
-
(2,384)
723
244
(2,384)
142
(1,275)
At 31 October 2017
4,916
29,529
3,319
47,628
85,392
The notes on pages 51 to 78 form part of these financial statements
There was no other comprehensive income during the current and prior years.
48
www.wynnstay.co.uk Company Statement of
Changes in Equity
As at 31 October 2017
Company
At 1 November 2015
Profit for the year
Total comprehensive income for the year
Transactions with owners of the Company, recognised directly in equity:
Shares issued during the year
Own shares acquired by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
At 31 October 2016
Loss for the year
Total comprehensive loss for the year
Transactions with owners of the Company, recognised directly in equity:
Shares issued during the year
Own shares disposed of by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
Share
capital
£000
Share
premium
account
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
4,848
28,439
2,721
20,755
56,763
-
-
26
-
-
26
-
-
409
-
-
409
-
-
-
(20)
-
63
43
1,199
1,199
1,199
1,199
-
(2,214)
-
(2,214)
435
(20)
(2,214)
63
(1,736)
4,874
28,848
2,764
19,740
56,226
-
-
42
-
-
-
42
-
-
681
-
-
-
681
-
-
-
244
-
142
386
(3,166)
(3,166)
(3,166)
(3,166)
-
-
(2,384)
-
(2,384)
723
244
(2,384)
142
(1,275)
At 31 October 2017
4,916
29,529
3,150
14,190
51,785
The notes on pages 51 to 78 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
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Wynnstay Group Plc
Consolidated and Company
Cash Flow Statement
As at 31 October 2017
Note
37
Cash flows from operating activities
Cash generated from continuing operations
Interest received
Interest paid
Tax paid
Net cash flows from operating activities in continuing operations
Net cash generated from operating activities in discontinued operations
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Proceeds on sale of investments
Disposal of subsidiarity, net cash disposed of
Purchase of intangibles
Own shares acquired by ESOP trust
Own shares disposed of by ESOP trust
Dividends received
Net cash used by investing activities in continuing operations
Net cash used in investing activities in discontinued operations
Net cash used by investing activities
Cash flows from financing activities
Net proceeds from the issue of ordinary share capital
Finance lease principal repayments
Repayment of borrowings
Dividends paid to shareholders
Net cash used in financing activities in continuing operations
Net cash used in financing activities in discontinued operations
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
The notes on pages 51 to 78 form part of these financial statements.
Group
(Restated)
2016
£000
8,477
69
(208)
(1,315)
7,023
388
7,411
223
(2,140)
290
-
(3)
(20)
-
-
(1,650)
(607)
(2,257)
435
(835)
(2,162)
(2,214)
(4,776)
(14)
(4,790)
364
9,747
10,111
2017
£000
6,053
66
(219)
(1,496)
4,404
282
4,686
177
(2,018)
150
(678)
-
-
244
-
(2,125)
(36)
(2,161)
723
(1,152)
(896)
(2,384)
(3,709)
(13)
(3,722)
(1,197)
10,111
8,914
Company
2017
£000
538
-
-
(93)
445
-
445
-
(239)
150
-
-
-
244
1,900
2,055
-
2,055
723
-
(839)
(2,384)
(2,500)
-
(2,500)
-
1
1
2016
£000
2,748
-
-
(18)
2,730
-
2,730
-
(112)
190
-
-
(20)
-
1,100
1,158
-
1,158
435
-
(2,109)
(2,214)
(3,888)
-
(3,888)
-
1
1
50
www.wynnstay.co.uk
Principal Accounting Policies
General Information
Wynnstay Group Plc has a number of
operations. These are described
the
segmental analysis in note 2.
in
Wynnstay Group Plc
is a company
incorporated and domiciled in the United
Kingdom. The address of its registered office
is shown on page 27. The Company has its
primary listing on AIM, part of the London
Stock Exchange.
Accounting Policies
The Group’s principal accounting policies
adopted in the preparation of these financial
statements are set out below.
Basis of preparation
(IFRS),
The Group’s financial statements have been
prepared in accordance with International
Financial Reporting Standards as adopted
by the EU
International Financial
Reporting Interpretation Committee (IFRIC)
interpretations and those provisions of the
Companies Act 2006 applicable to companies
reporting under IFRS. The Group financial
statements have been prepared under the
historical cost convention other than certain
assets which are at deemed cost under
the transition rules, share-based payments
which are included at fair value and certain
financial instruments which are explained in
the relevant section below. A summary of the
material Group accounting policies is set out
below and have been applied consistently.
Prior year figures in the consolidated income
statement and related notes have been
restated to present separately amounts relating
to operations classified as discontinued in the
current year. For details, see note 11.
The preparation of financial statements
in conformity with IFRS requires the use
of certain critical accounting estimates
and assumptions that affect the reported
amounts of assets and liabilities at the date
of the financial statements, and the reported
amounts of revenues and expenses during the
reporting period. Although these estimates are
based on management’s best knowledge of
the amount, event or actions, actual results
ultimately may differ from those estimates.
The Group’s forecasts and projections, taking
account of reasonable possible changes in
trading performance, show that the Group
should be able to operate within the level of
its current cash balances and debt facilities.
These debt facilities consist of term and
revolving credit
loans, with an average
maturity of three years and overdraft facilities
scheduled for review, as usual, in April 2018.
No matters have been drawn to the Group’s
attention by its bankers to suggest that the
facilities or the existing overdraft arrangements
may not be forthcoming.
Basis of consolidation
incorporated
The Group’s consolidated financial statements
the financial statements of
incorporate
Wynnstay Group Plc (‘the Company’) and
entities controlled by Wynnstay Group Plc
(its ‘subsidiaries’) together with the Group’s
share of the results of its associates and joint
ventures. Subsidiaries are entities controlled
by the Group. Control is achieved where the
Group is exposed to, or has the rights to,
variable returns through its power over the
entity. Group
transactions
inter-company
are eliminated in full. Results of subsidiary
undertakings acquired are included in the
financial statements from the effective date
of control and are excluded from the date
of disposal. The net assets, both tangible
intangible, of acquired subsidiary
and
undertakings are
the
financial statements on the basis of their fair
value as at the effective date of control and
are excluded from the date of disposal. All
business combinations are accounted for by
applying the acquisition method. Subsidiaries
are entities where the Group has the power
to govern the financial and operating policies,
generally accompanied by a share of more
than 50% of the voting rights. Subsidiaries are
consolidated from the date on which control
is assumed by the Group and are included
until the date the Group ceases to control
them. Associates are entities over which the
Group has significant influence but not control,
generally accompanied by a share of between
20% and 50% of the voting rights. Joint
ventures are entities over which the Group
has joint control. Investments in associates
and joint ventures are accounted for using the
equity method.
into
into the customer’s possession, and when the
amount of revenue can be measured reliably
and when it is probable that the economic
benefits associated with the transaction will
flow to the Group.
Retail
Revenue from the sale of goods is recognised
either at the point of sale through the till or
when the Group has transferred the significant
risks and rewards of ownership of goods to
the buyer, for example, delivering products
into the customer’s possession, and when the
amount of revenue can be measured reliably
and when it is probable that the economic
benefits associated with the transaction will
flow to the Group.
Discontinued operations
Where an asset or group of assets (a disposal
group) is available for immediate sale and
the sale is highly probable and expected to
occur within one year then the disposal group
is classified as held for sale. The disposal
group is measured at the lower of the carrying
amount and fair value less costs to sell.
Depreciation is not charged on such assets.
Where a group of assets that comprises
operations that can be clearly distinguished
operationally and
reporting
purposes from the rest of the group (a
component), has been disposed of or
classified as held for sale, and it:
for financial
•
•
represents a separate major line of
business or geographical area of
operations; or
is part of a single co-ordinated plan
to dispose of a separate major line
of business or geographical area of
operations; or
•
is a subsidiary acquired exclusively with
a view to resale;
then
the component
discontinued operation.
is classified as a
In respect of Just for Pets Limited, the
administration event causes a loss of control
of that entity and is therefore accounted for
as a disposal.
Non-recurring items
Going concern
Revenue recognition
As highlighted in note 24 to the financial
statements, the Group meets its day to day
working capital requirements through the
use of cash balances and overdraft facilities
which are due for review on an annual basis.
The current economic conditions create
uncertainty, particularly over: (a) the level of
demand for the Group’s products; (b) the
exchange rate between sterling and the US
dollar which has consequences for the cost
of the Group’s raw materials; and (c) the
availability of bank finance in the foreseeable
future.
Revenue represents the invoiced value of sales
which fall within Wynnstay Group’s ordinary
activities. Revenue is measured at the fair
value of the contract net of rebates excluding
value added tax and after eliminating sales
within the Group.
Agriculture
Revenue from the sale of goods is recognised
when the Group has transferred the significant
risks and rewards of ownership of goods to
the buyer, for example, delivering products
Non-recurring items that are material by size
and/or by nature are disclosed on the face of
the consolidated statement of comprehensive
income and within a note to the financial
statements
items”.
Management consider that the separate
disclosure of non-recurring
items helps
provide a better indication of the Group’s
underlying business performance.
“exceptional
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Wynnstay Group Plc
Principal Accounting Policies continued
hold or issue derivative financial instruments
for trading purposes, however, if derivatives
do not qualify for hedge accounting they are
accounted for as such.
in
Derivative financial instruments are recognised
and stated at fair value. Where derivatives do
not qualify for hedge accounting, any gains or
losses on re-measurement are immediately
the Group Statement of
recognised
Consolidated
Income. Where derivatives
qualify for hedge accounting, recognition of
any resultant gain or loss depends on the
nature of the hedge relationship and the item
being hedged. In order to qualify for hedge
accounting, the Group is required to document
from
relationship between
the item being hedged and the hedging
instrument. The Group is also required to
document and demonstrate an assessment of
the relationship between the hedged item and
the hedging instrument, which shows that the
hedge will be highly effective on an ongoing
basis. This effectiveness testing is performed
at each period end to ensure that the hedge
remains highly effective.
inception
the
Derivative financial instruments with maturity
dates of more than one year from the balance
sheet date are disclosed as non-current.
Fair value hedging
Derivative financial instruments are classified
as fair value hedges when they hedge the
Group’s exposure to changes in the fair value
of a recognised asset or liability. Changes in
the fair value of derivatives that are designated
and qualify as fair value hedges are recorded
in the Group Statement of Comprehensive
Income together with any changes in the fair
value of the hedged item that is attributable to
the hedged risk.
Leases
Leases are classified as finance leases at
inception where substantially all of the risks
and rewards of ownership are transferred to
the Group. Assets classified as finance leases
are capitalised on the balance sheet and are
depreciated over the expected useful life of
the asset. The interest element of the rental
obligations is charged to the Group Statement
of Comprehensive Income over the period
of the lease. Rentals paid under operating
leases are charged to the Group Statement
of Comprehensive Income on a straight-line
basis over the term of the lease. Leasehold
land is normally classified as an operating
lease. Payments made to acquire leasehold
land are included in prepayments at cost and
are amortised over the life of the lease. Any
incentives to enter into operating leases are
recognised as a reduction of rental expense
over the lease term on a straight-line basis.
Investment property
Investment properties are properties which
are held either to earn rental income or for
capital appreciation or for both. Investment
properties are stated at fair value.
Any gain or loss arising from the change
in fair value is recognised in profit and loss.
Rental income from investment property is
accounted for on a receivable basis.
Property, plant and equipment
Property, plant and equipment are stated
at cost, net of accumulated depreciation
and any provision for impairment losses.
Depreciation is provided at rates calculated to
write off the cost less estimated residual value
of fixed assets over their expected useful lives
as follows:
• Freehold property - 2.5% - 5% per
annum straight line
• Lease premium - over the period of
the lease
• Leasehold land and buildings - over
the period of the lease
• Plant and machinery and office
equipment - 10% - 33% per annum
straight line
• Motor vehicles - 20% - 30% per
annum straight line
Goodwill
Goodwill represents the excess of the cost of
acquisition over the fair value of the identifiable
assets, liabilities and contingent liabilities of the
acquired entity at the date of the acquisition.
At the date of acquisition, goodwill is allocated
to cash generating units for the purpose of
impairment testing. Goodwill is recognised
as an asset and assessed for impairment
impairment
annually. Any
recognised
is
immediately
the Group Statement of
in
Comprehensive Income. Once recognised, an
impairment of goodwill is not reversed.
Impairment of assets
At each reporting date, the Group assesses
whether there is any indication that an asset
may be impaired. Where an indicator of
impairment exists, the Group makes an
estimate of
recoverable amount. Where
the carrying amount of an asset exceeds
its recoverable amount the asset is written
down to its recoverable amount. Recoverable
amount is the higher of fair value less costs
to sell and value in use, and is considered
for each individual asset. If the asset does
not generate cash flows that are largely
independent of those from other assets or
groups of assets, the recoverable amount
of the cash generating unit to which the
Financial instruments
Financial assets and liabilities are recognised
on the Company and Group’s consolidated
balance sheet when the Company and/or
Group becomes a party to the contractual
instrument. The main
provisions of
categories of financial instruments are:
the
Trade receivables
Trade and other receivables are recognised at
fair value, less any impairment losses.
Investments
Investments are initially measured at cost.
They are classified as either ‘available-for-
sale’, ‘fair value’, or ‘held to maturity’. Where
securities are designated as at ‘fair value’ gains
or losses arising from changes in fair value are
included in the net profit or loss for the period.
For ‘available-for-sale’ investments, gains or
losses arising from changes in fair value are
recognised directly in equity, until the security
is disposed of or is determined to be impaired,
at which time the cumulative gain or loss
previously recognised in equity is included
in the net profit or loss for the period. Equity
investments that do not have a quoted market
price in an active market and whose fair value
cannot be reliably measured by other means
are held at cost.
Interest-bearing borrowings
Interest-bearing bank loans and overdrafts are
initially recorded at fair value, net of attributable
transaction costs. Subsequent
initial
recognition, interest-bearing borrowings are
stated at amortised cost with any difference
between proceeds and redemption value
being recognised in the Group Statement of
Consolidated Income over the period of the
borrowings on an effective interest basis.
to
Financial Guarantees
The Group enters into financial guarantees
with its subsidiaries. These guarantees are
accounted for as insurance contracts.
Trade payables
Trade and other payables are recognised at
fair value.
Equity instruments
Equity instruments issued by the Group and/
or Company are recorded at the proceeds
received, net of direct issue costs. An equity
instrument is any contract that evidences a
residual interest in the assets of the Group
and/or Company after deducting all of its
liabilities.
Derivative financial instruments and hedging
financial
The Group
instruments to hedge its exposure to foreign
exchange, and commodity risks arising from
day to day activities. The Group does not
derivative
uses
52
www.wynnstay.co.uk Application of the “own use” exemption
Forward contracts are entered into by the
Group to purchase and/or sell grain and other
agricultural commodities, and management
judge that these forward commodity contracts
are entered into for the Groups “own use”
rather than as trading instruments when they
are entered into. They continue to be held
in accordance with the Group’s expected
purchase, sale and/or usage requirements.
Valuation of share-based payments
The fair value of share-based payments
is determined using valuation models and
is charged to the Group Statement of
Income over the vesting
Comprehensive
period. Estimations of vesting and satisfaction
of performance criteria are
to
determine fair value.
required
Impairment of goodwill
for
The carrying value of goodwill must be
assessed
impairment annually. This
requires an estimation of the value in use of
the cash generating units to which goodwill
is allocated. Value in use is dependent on
estimations of future cash flows from the cash
generating unit and the use of an appropriate
discount rate to discount those cash flows to
their present value.
Provision for impairment of trade receivables
The financial statements include a provision for
impairment of trade receivables that is based
on management’s estimation of recoverability.
There is a risk that the provision will not match
the trade receivables that ultimately prove to
be irrecoverable.
Provision for impairment of inventories
The financial statements include a provision
for impairment of inventories that is based on
management’s estimation of recoverability.
There is a risk that the provision will not match
the inventories that ultimately prove to be
impaired.
asset belongs is determined. Discount rates
reflecting the asset specific risks and the time
value of money are used for the value in use
calculation.
Employment benefit costs
The Group operates a defined contribution
pension scheme. Contributions to this scheme
are charged to the Group Statement of
Comprehensive Income as they are incurred,
in accordance with the rules of the scheme.
Inventories
Inventories are stated at the lower of cost
and net realisable value. Cost comprises
direct materials and, where applicable, direct
labour costs and those overheads that have
been incurred in bringing the inventories to
their present location and condition. Where
appropriate, cost is calculated on a specific
identification basis. Otherwise
inventories
are valued using the first-in-first-out method.
Net realisable value represents the estimated
selling price less all estimated costs to
completion and costs to be incurred in
marketing, selling and distribution.
Taxation including deferred taxation
The income tax expense represents the
sum of the current income tax and deferred
income tax. Current income tax is based
on the taxable profits for the year. Taxable
profit differs from the profit as reported in the
Group Statement of Comprehensive Income
because it excludes items of income and
expense that are taxable or deductible in
other years and it further excludes items that
are never taxable or deductible. The Group’s
liability for current tax is calculated using tax
rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred income tax is provided in full, using
the liability method, on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amounts in the
Group financial statements. However, deferred
income tax is not accounted for if it arises
from initial recognition of an asset or liability
other than a business combination. Deferred
income tax is determined using tax rates (and
laws) that have been enacted or substantively
enacted by the balance sheet date and are
expected to apply when related deferred
income tax asset is realised or the deferred
income tax liability settled. Deferred income
tax assets are recognised to the extent that
it is probable that future taxable profits will
be available against which the temporary
differences can be utilised.
Dividends
Final equity dividends to the shareholders of
the Company are recognised in the period
that they are approved by the shareholders.
Interim equity dividends are recognised in the
period that they are paid.
Share-based payments
The Group issues equity-settled share-based
payments to certain employees. Equity-settled
share-based payments are measured at fair
value at the date of the grant. The fair value
determined at the grant date of the equity-
settled share-based payments is expensed on
a straight-line basis over the vesting period,
based on the Group’s estimate of shares that
will eventually vest. Fair value is measured
by use of a valuation model. The expected
life used in the model has been adjusted,
based on management’s best estimate, for
the effects of non-transferability, exercise
restrictions and behavioural considerations.
The movements in respect of equity-settled
share-based payments are recognised in
other reserves.
Investments
Investments held as fixed assets are shown at
cost less provisions for impairment.
Cash and cash equivalents
Cash and cash equivalents, for the purposes
of the consolidated cash flow statement,
comprise cash at bank and in hand, money
market deposits and other short term highly
liquid investments with original maturities of
three months or less and bank overdrafts.
Bank overdrafts are presented in borrowings
within current liabilities in the balance sheet.
Foreign currencies
Monetary assets and liabilities denominated in
foreign currencies are translated into sterling
at the rate of exchange ruling at the balance
sheet date. Transactions in foreign currencies
are translated into sterling at the rate ruling
on the date of the transaction. Exchange
gains and losses are recognised in the Group
Statement of Comprehensive Income.
Employee share ownership trust
The Company operates an employee share
ownership trust it is accounted for as a
separate entity, and therefore the assets,
liabilities, income and cost of the ESOP are
incorporated into the financial statements of
the Group.
Significant judgments, key assumptions
and estimates
Application of certain Group accounting
policies
to make
judgments, assumptions and estimates
concerning the future as detailed below:
requires management
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Wynnstay Group Plc
Principal Accounting Policies continued
New standards and interpretations
There have been a number of minor changes to standards which became applicable for the year
ended 31 October 2017, none of which have been assessed as having a significant impact on
the Group.
The following adopted IFRSs have been issued but have not yet been applied by the Group in
these financial statements.
EU effective date for accounting
periods commencing on or after
New or amendments to existing standards
Amendments to IAS 7: Disclosure Initiative
Amendments to IAS 12: Recognition of Deferred Tax Assets for
Unrealised Losses
IFRS 15 Revenue from Contracts with Customers
Amendment to IFRS 4 ‘Insurance contracts’ regarding the
implementation of IFRS 9 ‘Financial instruments’
IFRS 9 Financial Instruments
IFRS 16 Leases
IFRS 17 Insurance Contracts
1 January 2017
1 January 2017
1 January 2018
1 January 2018
1 January 2018
1 January 2019
1 January 2019
It is considered that the above standards and amendments, with the exception of IFRS 9
‘Financial Instruments’ and IFRS 16 ‘Leases’, will not have a significant effect on the results or
net assets of the Group or Company.
IFRS 15 ‘Revenue from Contracts with Customers’, is effective for accounting periods beginning
on or after 1 January 2018, and will therefore first apply to the Group in the year ending 31
October 2019. The Group has assessed its income streams using the five stage revenue
recognition model and agent versus principal considerations and preliminary conclusions are
that the Group results and net assets will not be materially impacted by this standard.
IFRS 9, ‘Financial instruments’, is effective for accounting periods beginning on or after 1 January
2018, and will therefore first apply to the Group in the year ending 31 October 2019. IFRS 9
requires entities to provide for possible future credit losses on loans and receivables, including
trade receivables, even if it is highly likely that the loan or receivable will be fully collectible. The
standard introduces an “expected credit loss” model that focuses on the risk that a loan or
receivable will default rather than whether a loss has been incurred. The Group currently has
material amounts of trade receivables past due and it is expected that IFRS 9 may impact the
value of the provision for impairment of trade receivables. The assessment of the impact to the
Group is ongoing.
IFRS 16, ‘Leases’, is effective for period beginning on or after 1 January 2019, and will therefore
first apply to the Group in the year ending 31 October 2020. The Group is currently assessing
the impact of the accounting changes that will be required; in particular, leases currently treated
as operating leases such as short term property leases, and company vehicles are likely to
be recorded as an asset and a lease liability. The Group is in the process of collating lease
documentation.
54
www.wynnstay.co.uk Notes to the Financial Statements
For the year ended 31 October 2017
1.
2.
The Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement
and related notes that form part of these approved financial statements.
SEGMENTAL REPORTING
IFRS 8 requires operating segments to be identified on the basis of internal financial information about the components of the Group
that are regularly reviewed by the chief operating decision maker (“CODM”) to allocate resources to the segments and to access their
performance.
The chief operating decision maker has been identified as the Board of Directors (‘the Board’). The Board reviews the Group’s internal
reporting in order to assess performance and allocate resources. The Board has determined that the operating segments, based on
these reports are Agriculture, Specialist Retail and Other.
The Board considers the business from a product/service perspective. In the Board’s opinion, all of the Group’s operations are carried
out in the same geographical segment, namely the United Kingdom.
Agriculture – Manufacturing and supply of animal feeds, fertiliser, seeds and associated agricultural products.
Specialist Retail – Supplies of a wide range of specialist products to farmers, smallholders, and pet owners.
Other – Miscellaneous operations not classified as Agriculture or Specialist Retail.
The Group disposed of Just for Pets Limited, a part of the Specialist Retail segment, on 10 October 2017 when Just for Pets Limited
entered administration. The prior year segmental results have been restated to exclude the results of Just for Pets Limited from Specialist
Retail, see note 11.
The Board assesses the performance of the operating segments based on a measure of operating profit. Finance income and costs
are not included in the segment result that is assessed by the Board. Other information provided to the Board is measured in a manner
consistent with that in the financial statements.
Inter-segmental transactions are entered into under the normal commercial terms and conditions that would be available to unrelated
third parties.
No segment is individually reliant on any one customer.
The segment results for the year ended 31 October 2017 for continuing operations are as follows:
Year ended 31 October 2017
Revenue from external customers
Segment result
Group operating profit before investment impairment and costs of
Group operating profit before investment impairment and costs of
corporate restructuring
Share of results of associates and joint ventures before tax
Investment impairment and costs of corporate restructuring
Interest income
Interest expense
Profit before tax from continuing operations
Income taxes (includes tax of associates and joint ventures)
Profit for the year attributable to equity shareholders from
continuing operations
continuing operations
Segment net assets
Corporate net cash (note 25)
Segment net assets after corporate net cash
Agriculture
Specialist Retail
£000
280,870
£000
109,727
3,017
320
3,337
4,740
-
4,740
Other
£000
127
(42)
(53)
(95)
Total
£000
390,724
7,715
267
7,982
(95)
66
(219)
7,734
(1,429)
6,305
33,908
39,739
7,239
80,886
4,506
85,392
55
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Notes to the Financial Statements continued
2.
SEGMENTAL REPORTING continued
The segment results for the year ended 31 October 2016 for continuing operations are as follows:
Year ended 31 October 2016 (restated)
Revenue from external customers
Segment result
Group operating profit before investment impairment and costs
of corporate restructuring
of corporate restructuring
Share of results of associates and joint ventures before tax
Interest income
Interest expense
Profit before tax from continuing operations
Income taxes (includes tax of associates and joint ventures)
Profit for the year attributable to equity shareholders from
continuing operations
Segment net assets
Corporate net cash (note 25)
Segment net assets after corporate net cash
Agriculture
Specialist Retail
£000
249,736
£000
103,864
2,934
72
3,006
4,414
51
4,465
Other
£000
126
(69)
(30)
(99)
32,173
40,538
7,104
Total
£000
353,726
7,279
93
7,372
69
(208)
7,233
(1,462)
5,771
79,815
4,283
84,098
3.
FINANCE COSTS
Interest expense:
Interest payable on borrowings
Interest payable on finance leases
Interest and similar charges payable
Interest income
Interest receivable
Finance costs
4.
OTHER OPERATING INCOME
Rental income
Other operating income
2017
£000
(Restated) 2016
£000
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
(114)
(105)
(219)
66
66
(153)
-
(3)
(3)
-
-
(3)
(95)
(113)
(208)
69
69
(139)
-
(1)
(1)
-
-
(1)
2017
£000
(Restated) 2016
£000
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
326
-
326
22
66
88
364
-
364
24
66
90
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5.
INVESTMENT IMPAIRMENT AND COSTS OF CORPORATE RESTRUCTURING
Continuing operations
Investment impairment
Costs of corporate restructuring
2017
£000
60
35
2016
£000
-
-
The investment impairment relates to an accounting disposal of unlisted investments. The costs of corporate resturcturing relate to the
dissolution of dormant subsidiaries.
6.
GROUP OPERATING PROFIT
The following items have been included in arriving at operating profit:
Staff costs
Depreciation of property plant and equipment:
- owned assets
- under finance leases
Amortisation of intangibles
(Profit) on disposal of fixed assets
Other operating lease rentals payable
Repairs and maintenance expenditure on plant,
property and equipment
Trade receivables impairment
2017
£000
Continuing
operations
24,975
Discontinued
operations
2,838
(Restated) 2016
£000
Continuing
operations
24,232
Discontinued
operations
2,972
1,947
710
14
(73)
2,242
1,851
65
320
4
-
(8)
2,073
92
-
1,825
623
15
(127)
1,786
1,671
8
316
4
-
(1)
1,703
110
-
Services provided by the Group’s auditor
During the year the Group obtained the following services from the Group’s auditor:
Audit services – statutory audit
Other services relating to taxation
Other services - XBRL tagging
2017
£000
(Restated) 2016
£000
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
102
8
2
8
-
-
85
8
2
9
-
-
Included in the Group audit fee are fees of £5,000 (2016: £5,000) paid to the Group’s auditor in respect of the parent company. The fees
relating to the parent company are borne by one of the Group’s subsidiaries.
7.
SHARE OF POST-TAX PROFITS /(LOSS) OF ASSOCIATES AND JOINT VENTURES
Continuing operations
Share of post-tax profit in associates
Share of post-tax profits/(loss) in joint ventures
Total share of post-tax profits/(loss) of associates and joint ventures
2017
£000
17
180
197
2016
£000
31
36
67
57
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Notes to the Financial Statements continued
8.
STAFF COSTS
The aggregate payroll costs, including Directors’ emoluments, charged in the financial statements for the Group were as follows:
Wages and salaries
Social security costs
Pension and other costs
Cost of share-based reward
2017
£000
(Restated) 2016
£000
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
22,002
2,030
801
142
24,975
2,672
135
31
-
2,838
21,350
2,039
780
63
24,232
2,802
138
32
-
2,972
The average number of employees, including Directors, employed by the Group during the year was as follows:
2017
No.
(Restated) 2016
No.
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
Administration
Production
Sales, distribution and retail
99
110
614
823
13
-
227
240
9.
DIRECTORS’ REMUNERATION
Aggregate Directors’ remuneration
Directors’ emoluments
Company contributions to money purchase pension schemes
Aggregate gains made on the exercise of Approved SAYE options
90
100
620
810
2017
£000
687
30
2
719
13
-
243
256
2016
£000
672
30
-
702
Details of the Directors’ interest in the share capital of the company, including outstanding share options at the year end, are provided in
the Directors’ Report. The following remuneration detail is provided in accordance with AIM Rule 19.
Name of Director
Executives
K R Greetham
B P Roberts
D A T Evans
Non-Executives
J J McCarthy
S J Ellwood
P M Kirkham
H J Richards
Basic salary
Benefits
in kind
£000
£000
Annual
bonuses
£000
2017
Total
£000
145
114
99
50
34
34
34
510
12
10
10
-
-
1
1
34
61
45
37
-
-
-
-
143
218
169
146
50
34
35
35
687
2016
Total
£000
225
165
142
50
20
35
35
672
58
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DIRECTORS’ REMUNERATION continued
Retirement benefits are accruing to the following number of directors under:
Money purchase pension scheme
Contribution paid by the Group to money purchase pension schemes in
respect of such directors were:
K R Greetham
B P Roberts
D A T Evans
Gains made on exercise of approved and unapproved share option schemes
K R Greetham
B P Roberts
D A T Evans
10.
TAXATION
Analysis of tax charge in year
Continuing operations
Current tax
- continuing operations
- adjustments in respect of prior years
Total current tax
Deferred tax
- accelerated capital allowances
Total deferred tax
Tax on profit on ordinary activities
Factors affecting tax charge for the year
2017
No.
3
£000
14
10
6
30
2017
£000
-
2
-
2
2017
£000
1,490
(56)
1,434
(75)
(75)
1,359
2016
No.
3
£000
14
10
6
30
2016
£000
-
-
-
-
(Restated) 2016
£000
1,677
(161)
1,516
(80)
(80)
1,436
The tax assessed for the year is lower (2016: lower) than the standard rate of corporation tax in the UK applicable to the Group 19.41%
(2016: 20.00%), but after other adjustments, including for a prior year over provision, the charge to the accounts is marginally lower at
17.73% ( 2016: lower at 19.99%) and is explained as follows:
Continuing operations
Profit on ordinary activities before tax
Profit on ordinary activities multiplied by standard rate of corporation tax in
the UK of 19.41% (2016: 20%)
Effects of:
Tax effect of share of profit of associates and joint ventures
Other items
Expenses not deductible for tax purposes
Adjustment to tax charge in respect of prior years
Origination and reversal of timing differences
Total tax charge for year
2017
£000
7,664
1,488
(38)
(4)
36
(56)
(67)
1,359
(Restated) 2016
£000
7,207
1,441
(13)
90
-
(161)
79
1,436
Factors that may affect future tax charges
A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) was reflected in the tax charge for the year.
Further reductions to 17% (effective 1 April 2020) were substantively enacted on 6 September 2016. This will reduce the Group’s future
current tax charge accordingly.
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Wynnstay Group Plc
Notes to the Financial Statements continued
11.
DISCONTINUED OPERATIONS
The Group disposed of Just for Pets Limited, a part of the Specialist Retail segment, on 10 October 2017 when Just for Pets Limited
entered administration and on this date recognised a disposal of the assets and liabilities of Just for Pets Limited for nil consideration.
An analysis of the result of discontinued operations which have been included in the consolidated income statement, and the loss
recognised on the re-measurement to fair value less costs to disposal, are as follows:
Revenue
Expenses
(Loss)/profit before tax of discontinued operations
Taxation
(Loss)/profit after tax of discontinued operations
Costs incurred in relation to administration of Just for Pets Limited
Group goodwill impairment charges
Pre-tax loss recognised on the measurement to fair value less costs to sell
Taxation
(Loss)/profit for the year from discontinued operations
Effect of the disposal on the financial position of the Group:
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Deferred tax liabilities
Net assets and liabilities
Net cash outflow
12.
DIVIDENDS
Final dividend paid for prior year
Interim dividend paid for current year
2017
£000
13,125
(14,044)
(919)
-
(919)
(77)
(3,881)
(1,709)
-
(6,586)
2017
£000
(1,477)
(1,715)
(633)
(678)
2,765
29
(1,709)
(678)
2017
£000
1,559
825
2,384
2016
£000
14,417
(14,339)
78
(20)
58
-
-
-
-
58
2016
£000
1,436
778
2,214
Subsequent to the year end it has been recommended that a final dividend of 8.40p net per ordinary share (2016: 8.00p) be paid on 30
April 2018. Together with the interim dividend already paid on 31 October 2017 of 4.20p net per ordinary share (2016: 4.00p) this would
result in a total dividend for the financial year of 12.60p net per ordinary share (2016: 12.00p).
60
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EARNINGS PER SHARE
Basic earnings per
share
Diluted earnings per
share
2017
(Restated)
2016
2017
(Restated)
2016
Continuing operations
Earnings attributable to shareholders (£000)
6,305
5,771
6,305
5,771
Weighted average number of shares in issue during the
year (number ‘000)
19,529
19,425
19,782
19,557
Earnings per ordinary 25p share (pence)
32.29
29.71
31.87
29.51
Discontinued operations
(Loss)/earnings attributable to shareholders (£000)
(6,586)
58
(6,586)
58
Weighted average number of shares in issue during the
year (number ‘000)
19,529
19,425
19,782
19,557
(Loss)/earnings per ordinary 25p share (pence)
(33.72)
0.30
(33.29)
0.30
Continuing Operations
Basic earnings per 25p ordinary share from continuing operations is calculated by dividing profit for the year from continuing operations
attributable to ordinary share holders by the weighted average number of ordinary shares in issue during the year.
For diluted earnings per share from continuing operations, the weighted average number of ordinary shares is adjusted to assume
conversion of all dilutive potential ordinary shares (share options and warrants) taking into account their exercise price in comparison with
the actual average share price during the year.
Discontinued Operations
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operations attributable to ordinary share holders by the weighted average number of ordinary shares in issue during the year.
For diluted earnings per share from discontinued operations, the weighted average number of ordinary shares is adjusted to assume
conversion of all dilutive potential ordinary shares (share options and warrants) taking into account their exercise price in comparison with
the actual average share price during the year.
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Wynnstay Group Plc
Notes to the Financial Statements continued
14.
GOODWILL
After initial recognition, goodwill is subject to annual impairment tests or more frequently if events or changes in circumstances indicate
that it might be impaired, in accordance with IAS 36.
Group
Cost
At 1 November 2015
Additions
Disposals
At 31 October 2016
Disposals
Subsidiary disposed
At 31 October 2017
Aggregate impairment
At 1 November 2015 and 31 October 2016
Disposals
At 31 October 2017
Net book value
At 31 October 2017
At 31 October 2016
Goodwill impairment
£000
19,792
3
(11)
19,784
(4,003)
(245)
15,536
1,637
(367)
1,270
14,266
18,147
Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual basis, or more frequently if there
are indications that goodwill may be impaired. Goodwill acquired in a business combination is allocated to groups of cash generating units
according to the level at which management monitor that goodwill.
Recoverable amounts for cash generating units are based on the higher of value in use and fair value less costs to sell. Value in use is
calculated from cash flow projections for the next 5 years using data from the Group’s latest internal forecasts, the results of which are
reviewed by the Board.
The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins.
Management estimate discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the
risks specific to the cash generating units. Changes in selling prices and direct costs are based on past experience and expectations of
future changes in the market. Given the current economic climate, a sensitivity analysis has been performed in assessing the recoverable
amounts of goodwill.
In October 2017 and 2016 impairment reviews were performed by comparing the carrying value of goodwill with the recoverable amount
of the cash generating units to which goodwill has been allocated.
Goodwill is allocated to specific cash generating units (“CGUs”) as it arises.
The Group has a number of CGUs in both the Agriculture and the Specialist Retail sectors. The carrying amount of goodwill allocated to
the Agriculture CGUs is £7,776,514 (2016: £7,774,010), and to Specialist Retail is £6,489,577 (2016: £10,384,145).
The pre-tax discount rates used to calculate value in use were 9% (2016: 9% - 12%) for Agriculture and 9% (2016: 9% - 12%) for
Specialist Retail. These discount rates are derived from the Groups weighted average cost of capital and adjusted for the specific risks
relating to each CGU.
The forecasts are extrapolated based on estimated long term average growth rates of 2.7% (2016: 1% - 3%) for both Agriculture and
Specialist Retail.
The Directors have considered the sensitivity to key assumptions and the majority of the Group’s impairment tests have significant
headroom. However, two CGUs contain reasonably possible changes in key assumptions which could have a material impact on the
carrying value of goodwill which therefore require disclosure.
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GOODWILL continued
Goodwill is allocated to these CGUs as follows:
GrainLink
Woodheads
2017
4,206
2,389
2016
4,206
2,389
The recoverable amount of these CGUs are based upon their value in use, determined by discounting future cashflows to be generated
from the continuing use for the CGU. The estimated value in use exceeded the carrying value by approximately £485,248 for Grainlink and
£38,324 for Woodheads. The key assumptions used in the estimation of the recoverable amounts are set out below. The values assigned
to the key assumptions represent management’s assessment of future trends in the relevant industries and have been based on historical
data and future forecasts from both internal and external sources.
Grainlink
Discount rate
Terminal value growth rate
Budgeted EBIT
9.0%
2.7%
Increase of £122k in year 2 followed
by 1% growth in years 3-5
2017
2016
Woodheads
Discount rate
Terminal value growth rate
Budgeted EBIT growth rate
(average of next 5 years)
9.0%
2.7%
3.5%
9.0%
2.33%
3.0%
9.0%
2.5%
3.0%
Management have prepared the discounted future cashflows on a basis which they believe is achievable, however there are a range of
reasonably possible changes to the assumptions, some of which may indicate a potential impairment. Specifically, detrimental changes
in any of the three individual key assumptions could cause the carrying amount to exceed the recoverable amount. The following table
shows the amounts by which these key assumptions would need to change individually for the estimated recoverable amount to be equal
to the carrying amount.
Change required for
carrying amount to be
equal to recoverable
amount
Grainlink
Discount rate
Terminal value growth rate
Budgeted EBIT growth rate
(average of next 5 years)
Woodheads
Discount rate
Terminal value growth rate
Budgeted EBIT growth rate
(average of next 5 years)
2017
2016
0.4
(0.5)
(2.3)
0.1
(0.1)
(0.3)
1.0
(1.3)
(4.2)
0.9
(1.1)
(5.9)
Notwithstanding the above sensitivities, the Directors are satisfied that they have applied reasonable and supportable assumptions based
on their best estimate of the range of future economic conditions that are forecast and consider that an impairment is not required in the
current year, however the position will be monitored on a regular basis.
15.
INTANGIBLE ASSETS
Group
Cost
Balance as at 1 November 2016 and 31 October 2017
Aggregate amortisation
Balance as at 1 November 2016
Amortisation charge for the period
At 31 October 2017
Net book value
At 31 October 2017
At 31 October 2016
£000
145
36
14
50
95
109
63
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Notes to the Financial Statements continued
16.
INVESTMENT PROPERTY
Group
Fair value
At 1 November 2016 and 31 October 2017
Company
At 1 November 2016 and 31 October 2017
£000
2,372
2,372
Investment property relates to a redeveloped property in Pwllheli, the Group continues to actively market the property.
The Directors have determined the fair value of the investment property at the year end, this is with reference to market evidence. The
amount of rent receivable from the Investment property was £198,100 (2016: £216,944).
17.
PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 November 2015
Additions
Disposals
Reclassification
Leasehold
land and
buildings
£000
Freehold
land and
buildings
£000
Plant, machinery
and office
equipment
£000
Motor
vehicles
£000
1,145
75
-
-
13,218
112
-
-
21,995
2,398
(209)
(438)
7,452
1,390
(1,099)
438
Total
£000
43,810
3,975
(1,308)
-
At 31 October 2016
1,220
13,330
23,746
8,181
46,477
Additions
Disposals
Disposal of subsidiary
89
-
(723)
239
-
-
1,267
(188)
(4,149)
1,141
(734)
(106)
2,736
(922)
(4,978)
At 31 October 2017
586
13,569
20,676
8,482
43,313
Depreciation
At 1 November 2015
Charge for the year
On disposals
At 31 October 2016
Charge for the year
On disposals
Disposal of subsidiary
576
25
-
601
55
-
(563)
4,324
337
-
4,661
312
-
-
14,626
1,283
(206)
15,703
1,393
(146)
(2,875)
4,860
1,123
(1,006)
4,977
1,221
(672)
(63)
24,386
2,768
(1,212)
25,942
2,981
(818)
(3,501)
At 31 October 2017
93
4,973
14,075
5,463
24,604
Net book value
At 31 October 2017
At 31 October 2016
493
619
8,596
8,669
6,601
3,019
18,709
8,043
3,204
20,535
The net book value of plant and machinery and motor vehicles above includes amounts of £1,937,682 (2016: £3,680,951) representing
assets held under finance leases.
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17.
PROPERTY, PLANT AND EQUIPMENT continued
Company
Cost
At 1 November 2015
Additions
At 31 October 2016
Additions
At 31 October 2017
Depreciation
At 1 November 2015
Charge for the year
At 31 October 2016
Charge for the year
At 31 October 2017
Net book value
At 31 October 2017
At 31 October 2016
Freehold
land and
buildings
£000
11,991
112
12,103
239
Total
£000
11,991
112
12,103
239
12,342
12,342
4,007
288
4,295
299
4,007
288
4,295
299
4,594
4,594
7,748
7,748
7,808
7,808
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Notes to the Financial Statements continued
18.
FIXED ASSET INVESTMENTS
Group
Cost
At 1 November 2015
Share of profit or investment income
Disposal
At 31 October 2016
Share of profit or investment income
Disposal
Impairment
Transfers
At 31 October 2017
Provision for impairment
At 1 November 2015, 31 October 2016 and 31 October 2017
Joint
ventures
£000
Associates
£000
Other
unlisted
investments
£000
2,873
36
(290)
2,619
180
(150)
-
(33)
2,616
69
2,547
2,550
721
31
-
752
17
-
-
19
788
-
788
752
182
-
-
182
-
-
(60)
14
136
27
109
155
Net book value
At 31 October 2017
At 31 October 2016
Company
Cost
At 1 November 2015
Disposal
At 31 October 2016
Disposal
At 31 October 2017
Share in group
undertakings
£000
Joint
ventures
£000
Associates
£000
Other
unlisted
investments
£000
18,182
-
18,182
(5,354)
12,828
620
(190)
430
(150)
280
69
69
211
361
48
-
48
-
48
-
-
48
48
-
-
-
-
-
-
-
-
-
Provision for impairment
At 1 November 2015
At 31 October 2016 and 31 October 2017
-
-
Net book value
At 31 October 2017
At 31 October 2016
12,828
18,182
66
Total
£000
3,776
67
(290)
3,553
197
(150)
(60)
-
3,540
96
3,444
3,457
Total
£000
18,850
(190)
18,660
(5,504)
13,156
69
69
13,087
18,591
www.wynnstay.co.uk
19.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
Subsidiaries
Subsidiary undertakings represent the following limited companies, all of which were incorporated in the UK:
Company name
Glasson Group (Lancaster) Limited
Glasson Grain Limited
Wynnstay (Agricultural Supplies) Limited
Woodheads Seeds Limited
Youngs Animal Feeds Limited
Grainlink Limited
Wrekin Grain Limited
Eifionydd Farmers Limited
Shropshire Grain Limited
Welsh Feed Producers Limited
Banbury Farm and General Supplies Limited
Proportion of shares held
(Ordinary) %
100
Nature of business
Holding company
Registered office address
West Quay, Glasson Dock, Lancaster, Lancs, LA2 0DB
100
100
100
100
100
100
100
100
100
100
Feed and Fertiliser merchant
West Quay, Glasson Dock, Lancaster, Lancs, LA2 0DB
Agricultural merchant
Seed merchants
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Equine and pet products distributor
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Grain merchant
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Investments in the subsidiaries listed above are held directly by Wynnstay Group Plc, with the exception of the following which are
direct subsidiaries of the respective following companies:
Glasson Group (Lancaster) Limited
Glasson Grain Limited
Youngs Animal Feeds Limited
Eifionydd Farmers
During the year, the following dormant subsidiaries were dissolved:
Westhope Livestock Supplies Limited
MVZ Farm Supplies Limited
Wynnstay Country Farmstock Limited
PSB (Country Supplies) Limited
During the year, Just for Pets Limited entered administration and hence is no longer a subsidiary, refer to note 11 for more details.
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Joint ventures
The above interests in joint ventures are represented by the following limited companies, all of which were incorporated in the UK:
Company name
Interest
Nature of business
Registered office address
Wyro Developments Limited
50% - Ordinary
Property development
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Bibby Agriculture Limited
Total Angling Limited
50% - Ordinary
50% - Preference
50% - Ordinary
Distribution of compound animal feeds
Old Croft, Stanwix, Carlisle, Cumbria, United Kingdom, CA3 9BA
Retailer of angling products
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Fertlink Limited
50% - Ordinary
Fertiliser blending
Cavendish Wharf, Duke Street, Birkenhead, Merseyside, CH41 1HN
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Investments in joint ventures listed above are held directly by Wynnstay Group Plc, with the exception of Fertlink Limited which is a
joint venture with Glasson Grain Limited.
Joint ventures are accounted for using the equity method.
The aggregate amounts of the Group’s share of joint venture assets and liabilities are:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
NET ASSETS
2017
£000
922
5,802
(4,192)
(8)
2,524
2016
£000
985
5,987
(4,531)
(81)
2,360
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Wynnstay Group Plc
Notes to the Financial Statements continued
19.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES continued
The aggregate amount of the Group’s share of joint venture revenue and expenses not included in these financial statements are:
Revenue
Expenses
The aggregate amount of the Group’s share of pre-tax profits included in these financial statements is:
Group’s share of joint ventures profit before tax
Principal associates
2017
£000
20,247
(20,002)
2016
£000
19,665
(19,611)
2017
£000
245
2016
£000
54
The above interests in associates is represented by the following limited companies, which are incorporated in the UK:
Company name
Interest
Nature of business
Registered office address
Wynnstay Fuels Limited
40%
Supply of petroleum products
Eagle House, Llansantffraid Ym Mechain, Powys, SY22 6AQ
Celtic Pride Limited
33.3%
Production and marketing of premium
welsh beef
Castell Howell Foods Ltd, Celtic Pride Ltd Cross Hands Food Park,
Cross Hands, Llanelli, Carmarthenshire, Wales, SA14 6SX
Summarised financial information in respect of the Group’s associates are as follows:
Total assets
Total liabilities
Net assets
Group’s share of associates’ net assets
Total revenue
Profit for the period
Group’s share of associates’ profit before tax
2017
£000
3,901
(1,984)
1,917
760
2016
£000
2,843
(1,085)
1,758
703
15,463
11,086
55
22
98
39
For the purposes of consolidation, the following periods of account have been used for each of the associated undertakings and joint
ventures:
Company
Wyro Developments Limited
Wynnstay Fuels Limited
Bibby Agriculture Limited
Fertlink Limited
Total Angling Limited
Celtic Pride Limited
Accounting period
31 October 2017
31 December 2016
31 August 2017
31 October 2017
31 October 2017
31 January 2017
IAS 27 “Consolidated and separate financial statements” and IAS 28 “Investments in Associates” require the use of accounting periods
within three months of the year end. Because of the other parties involved, Wynnstay Group Plc are unable to influence a change in
accounting reference date of Wynnstay Fuels Limited and Celtic Pride Limited. In the opinion of the Directors there is no material effect
on the reported figures as a result of this departure.
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19.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES continued
Trading transactions
During the year, the Group and Company entered into the following trading transactions with subsidiaries, associates and joint ventures:
Transactions and balances with subsidiaries
Amounts due from subsidiary undertakings:
Trade receivables
Amounts due to subsidiary undertakings:
Trade payables
Transactions reported in the statement of comprehensive income:
Income received
Purchases
Transactions and balances with associates
Amounts due from associated undertaking:
Trade receivables
Amounts due to associated undertaking:
Trade payables
Transactions reported in the statement of comprehensive
income:
Revenue
Purchases
Transactions and balances with joint ventures
Amounts due from joint ventures:
Trade receivables
Loans
Amounts due to joint ventures:
Trade payables
Transactions reported in the statement of comprehensive
income:
Revenue
Purchases
Income received
Company
2017
£000
2016
£000
-
-
298
298
-
-
-
-
Group
2017
£000
2016
£000
Company
2017
£000
2016
£000
7
7
24
24
19
375
4
4
24
24
19
346
-
-
-
-
-
-
Group
Company
2017
£000
8,671
2,844
11,515
2,278
2,278
21,236
13,700
58
2016
£000
2,680
2,786
5,466
41
41
10,575
5,000
58
2017
£000
-
2,844
2,844
-
-
-
-
-
-
-
-
-
-
-
2016
£000
-
2,786
2,786
-
-
-
-
-
Sales of goods to related parties were made at the Group’s usual list prices, less average discounts. Purchases were made at market
price discounted to reflect the quantity of goods purchased and relationships between the parties.
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Notes to the Financial Statements continued
20.
INVENTORIES
Group
Company
Raw materials and consumables
Finished goods and goods for resale
21.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Amounts owed by group undertakings
Other receivables
Current tax asset
Fair value of derivatives
2017
£000
4,098
25,958
30,056
Group
2017
£000
60,658
-
2,146
-
157
62,961
2016
£000
3,773
27,571
31,344
2016
£000
47,456
-
2,615
-
245
50,316
Trade receivables are stated after a provision for impairment of £718,687 (2016: £777,699) (Company £nil (2016: £nil)).
22.
TRADE AND OTHER PAYABLES
Current
Trade payables
Amounts owed to group undertakings
Other taxes and social security
Other payables
Accruals and deferred income
Contingent consideration
Fair value of derivatives
Non-current
Other payables
Government grants
Contingent consideration
Group
2017
£000
48,889
-
516
847
2,211
112
163
52,738
Group
2017
£000
-
22
-
22
2016
£000
39,684
-
682
1,752
2,337
137
158
44,750
2016
£000
365
23
-
388
70
2017
£000
-
-
-
2016
£000
-
-
-
Company
2017
£000
2016
£000
-
30,317
-
1
-
30,318
Company
2017
£000
82
1,680
-
141
77
-
-
1,980
-
30,417
-
-
-
30,417
2016
£000
-
2,087
-
106
-
-
-
2,193
Company
2017
£000
2016
£000
-
-
-
-
-
-
-
-
www.wynnstay.co.uk 23.
CURRENT TAX LIABILITIES
Current tax liabilities
24.
CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS
Cash and cash equivalents per balance sheet
Bank overdrafts
Cash and cash equivalents per cash flow statement
25.
FINANCIAL LIABILITIES - BORROWINGS
Current
Bank loans and overdrafts due within one year or on demand:
Secured loans
Loan capital (unsecured)
Other loanstock (unsecured)
Net obligations under finance leases
Non-current
Bank loans:
Secured
Net obligations under finance leases
Group
Company
2017
£000
847
847
2016
£000
905
905
2017
£000
-
-
2016
£000
112
112
Group
2017
£000
8,914
-
8,914
2016
£000
10,111
-
10,111
Company
2017
£000
2016
£000
1
-
1
1
-
1
Group
2017
£000
866
866
672
16
958
2,512
Group
2017
£000
1,120
1,120
776
1,896
2016
£000
905
905
664
16
1,041
2,626
2016
£000
1,986
1,986
1,216
3,202
Company
2017
£000
2016
£000
806
806
672
16
-
848
848
664
16
-
1,494
1,528
Company
2017
£000
1,111
1,111
-
1,111
2016
£000
1,916
1,916
-
1,916
The loan capital and loanstock is redeemable at par at the option of the Company. Interest at 1.5% per annum is payable to the
holders (2016: 1.5%) of the unsecured loan capital and unsecured loanstock.
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Wynnstay Group Plc
Notes to the Financial Statements continued
25.
FINANCIAL LIABILITIES - BORROWINGS continued
Non-current
The bank loans include term loans repayable by instalments as follows:
Monthly
instalment
(inc’ interest)
Balance
outstanding
2017
Balance
outstanding
2016
Interest rate
Maturity
date
HSBC Bank Plc
Lombard Bank Loan
HSBC Bank Plc
-
£5,111
£68,811
-
£51,911
1.80% over base rate
Nov 2016
£69,459
£126,026
4.75% per annum
Dec 2018
£1,917,369
£2,712,514
0.75% over base per annum
March 2020
The outstanding loans are secured by an unlimited composite company guarantee by all the trading entities within the Group.
Bank loans and overdrafts of £nil (2016:£nil) relating to subsidiary companies, are secured by an unlimited composite guarantee by all the
trading entities within the Group.
Finance lease obligations are secured on the assets to which they relate.
Borrowings are repayable as follows:
On demand or within one year
In the second year
In the third to fifth years inclusive
Over five years
Finance leases included above are repayable as follows:
On demand or within one year
In the second year
In the third to fifth years inclusive
Over five years
The net borrowings are:
Borrowings as above
Cash and cash equivalents
Net (cash)/debt
Group
2017
£000
2,512
1,316
580
-
4,408
958
491
285
-
1,734
2016
£000
2,626
1,605
1,597
-
5,828
1,041
729
487
-
2,257
4,408
(8,914)
(4,506)
5,828
(10,111)
(4,283)
Company
2017
£000
1,494
817
294
-
2,605
-
-
-
-
-
2,605
(1)
2,604
2016
£000
1,528
806
1,110
-
3,444
-
-
-
-
-
3,444
(1)
3,443
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26.
FINANCIAL INSTRUMENTS
Fair values of non-derivative financial assets and financial liabilities
The fair value of current assets and current liabilities are assumed to approximate to book value due to the short-term maturity of these
instruments.
Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting expected
future cash flows at prevailing interest rates. The fair value of current assets and current liabilities are assumed to approximate to the
book value due to the short term maturity of the instruments. The fair value of the non-current borrowings have been assessed and are
not deemed to differ materially from book value.
Fair values of derivative financial assets and financial liabilities
Derivatives are used to hedge exposure to market risks, and those that are held as hedging instruments are formally designated as
hedges as defined in IAS 39. Derivatives may qualify as hedges for accounting purposes and the Group’s hedging policies are further
described below.
Fair value hedges
The Group maintains futures based commodity contracts to hedge against the open long or short physical positions on its forward
purchase and sales books. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded
in the Group Statement of Comprehensive Income, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk. The gain or loss on the hedging instrument and hedged item is recognised in the Group Statement of
Comprehensive Income. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying value of the
hedged item is amortised to the Group Statement of Comprehensive Income under the effective interest rate method. The ineffective
element of these fair value hedges are not material in this year or the prior year.
The Group’s derivative financial assets and liabilities that are measured at fair value at 31 October 2017 have been considered against
the following hierarchical criteria to assess their classification level:
- quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
-
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
-
All derivative financial assets and liabilities are classified as Level 1 instruments as they are valued at quoted market prices.
Risks associated with financial instruments
The main risks to which the Group is exposed are as follows:
• Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices that will
affect the Group’s income or the value of its holdings of financial instruments.
•
Interest rate risk
While currently most of the Group’s term debt is floating base rate linked, the Board constantly review their option to fix the
rates attached to this debt through the use of Interest rate swap derivatives. Fixed rate term finance is used for the acquisition
of vehicles.
• Foreign currency risk
The main currency related risk to the Group comes from the forward purchasing of imported raw materials for our Glasson
Grain business. This risk is mainly managed by entering into currency purchase agreements at the time the underlying
transaction is completed. The fair value of these contracts is not material.
As at the year end the principal amounts relating to forward purchased currency amounted to £8,529,816 (2016: £6,342,105).
• Commodity price risk
While the Group does not engage in the taking of speculative commodity positions, it does have to make significant forward
purchases of certain raw materials, particularly for use in its animal feed manufacturing activities. Position reporting systems
are in place to ensure the Board is apprised of the exposure level on a regular basis, and where possible hedging tools,
primarily wheat futures contracts on the London LIFFE market, are used to manage price decisions.
• Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.
A significant proportion of the Group’s trade is conducted on credit terms and as such a risk of non payment is always
present.
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Wynnstay Group Plc
Notes to the Financial Statements continued
26.
FINANCIAL INSTRUMENTS continued
Detailed systems of credit approval before initial supply, the operation of credit limits and an active credit control policy act to minimise
this risk and historically the incidence of bad debts is low. The Group’s grain trading activities has exposed it to certain substantial
customer credit balances, and to assist in mitigating this perceived risk, a credit insurance policy has been purchased to provide partial
cover against default by certain customers.
The overdue accounts are reviewed monthly at divisional management meetings to mitigate exposure to credit risk and make provisions
accordingly.
Concentration of credit risk with respect to trade receivables is limited due to the Group’s customer base being large and unrelated.
Due to this, management believes that there is no further credit risk provision required in excess of the normal provision for doubtful
receivables. Included within the Company trade receivables are £nil (2016: £nil) of intercompany trade debtors.
At 31 October 2017 trade receivables of £11,574,835 (2016 £8,426,486), (Company £nil (2016: £nil)) were past due but were not
impaired.
These related to a number of independent customers for whom there is no recent history of default.
The aging analysis is as follows:
Up to 3 Months
Over three months
Liquidity risk
Group
Company
2017
£000
9,861
1,714
2016
£000
6,800
1,626
2017
£000
-
-
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group has appropriate overdraft facilities in place to allow flexibility in managing liquidity.
The effective interest rates at the balance sheet dates were as follows:
Group
Company
Bank overdraft
Bank borrowings
Loan capital
Finance leases
27.
DEFERRED TAXATION
At 1 November
Charge for the year
Disposal of subsidiary
At 31 October
The provision for deferred taxation is made up as follows:
Accelerated capital allowances
74
2017
1.0%
1.7%
1.5%
6.7%
Group
2017
£000
358
(75)
(29)
254
Group
2017
£000
254
2016
1.0%
1.7%
1.5%
5.8%
2016
£000
292
66
-
358
2016
£000
358
2016
£000
-
-
2016
1.0%
1.6%
1.5%
-
2017
n/a
1.6%
1.5%
-
Company
2017
£000
2016
£000
-
-
-
-
-
-
-
-
Company
2017
£000
-
2016
£000
-
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28.
SHARE CAPITAL
Authorised
Ordinary shares of 25p each
Allotted, called up and fully paid
Ordinary shares of 25p each
2017
No. of shares
2016
No. of shares
000
£000
000
£000
40,000
10,000
40,000
10,000
19,665
4,916
19,495
4,874
During the year 59,289 shares (2016: 77,429) were issued with an aggregate nominal value of £14,822 (2016: £19,357) and were fully
paid up for equivalent cash of £344,979 (2016: £367,244) to shareholders exercising their right to receive dividends under the Company’s
scrip dividend scheme.
A total of 110,896 (2016: 26,800) shares with an aggregate nominal value of £27,724 (2016: £6,700) were issued for a cash value of
£377,614 (2016: £67,804) to relevant holders exercising options in the Company. No other shares were issued in this financial year
(2016: nil).
29.
SHARE- BASED PAYMENTS
The following options were exercised, lapsed and outstanding at the year end:
Exercise
Price per
share £
Exercisable by
As at
01 November
2016
(Exercised)/
Issued in
year
Lapsed in
year
As at
31 October
2017
Discretionary Share Option Schemes
Granted April 2012
Granted October 2014
Granted October 2014
3.7500
5.4750
0.2500
April 2015 - March 2022
Oct 2017 - Oct 2024
Oct 2017 - Mar 2018
40,000
357,000
100,000
497,000
-
-
-
-
-
(24,000)
(100,000)
40,000
333,000
-
(124,000)
373,000
Savings Related Option Schemes
Granted August 2012
Granted July 2014
Granted July 2016
3.4000
5.0600
3.7000
Sept 2017 - Feb 2018
Aug 2019 - Jan 2020
Aug 2021 - Jan 2022
124,965
170,797
453,417
(109,202)
-
(2,188)
(4,122)
(15,759)
(46,847)
11,641
155,038
404,382
749,179
(111,390)
(66,728)
571,061
1,246,179
(111,390)
(190,728)
944,061
During the year nil (2016: 26,800) Discretionary Share Options and 111,390 (2016: nil) Savings Related Options were exercised and
satisfied by the allotment of 110,896 (2016: 26,800) new shares by the Company, and 494 (2016: nil) transferred by the Company’s
ESOP Trust. The change in the number of other Discretionary and Savings Related Options relates to members withdrawing from the
scheme by leaving employment or closing their savings contracts.
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Wynnstay Group Plc
Notes to the Financial Statements continued
29.
SHARE- BASED PAYMENTS continued
Fair Value of Options after 7 November 2002
During the year, the Group charged £141,859 (2016: £63,520) of share-based remuneration cost to its Group Statement of Comprehensive
Income based on a movement in the fair value of outstanding options granted after November 2002.The weighted average fair value of
these options were estimated by using the Black-Scholes option-pricing model and the following assumptions:
Weighted average assumptions
Share price at year end
Average share price
Exercise price
Expected volatility
Expected life
Number of options
Risk free interest rate at inception
Number of options exercisable
2017
£4.95
£5.58
£4.08
23.02%
3.11 years
559,420
0.50%
384,641
2016
£5.52
£4.90
£4.10
21.53%
2.53 years
1,206,179
0.50%
66,800
The expected volatility used was the standard deviation of the daily share price over the previous year and the risk fee interest rate was
based on bank base rate at the inception of each scheme.
30.
CONTINGENT LIABILITIES
The Company is part of a corporate cross guarantee arrangement between companies of Wynnstay Group Plc.
Under the terms of the agreement the bank is authorised to offset credit balances to reduce the liabilities of the other companies included
in the agreement. At the balance sheet date the potential combined liability to the companies was £nil (2016: £nil).
31.
CAPITAL COMMITMENTS
At 31 October 2017 the Group and Company had capital commitments as follows:
Contracts placed for future capital expenditure not provided
in the financial statements
32.
OPERATING LEASE COMMITMENTS
Non-cancellable operating leases are payable as follows:
Group
Expiry date:
Within 1 year
Between 2 and 5 years
Over 5 years
Company
Expiry date:
Within 1 year
Between 2 and 5 years
Over 5 years
Group
Company
2017
£000
386
2016
£000
361
2017
£000
-
2016
£000
-
Land and buildings
Others
2017
£000
1,982
5,067
2,574
369
1,219
758
2016
£000
3,154
8,702
8,699
457
848
830
2017
£000
2016
£000
72
53
-
-
-
-
70
142
-
-
-
-
GROUP FINANCIAL COMMITMENTS
The Group has guaranteed the overdrafts of one of its associate companies to a maximum of £125,000 (2016: £125,000).
PENSION COMMITMENTS
The Group operates two defined contribution pension schemes which are administered on separate bases. The pension and associated
costs charge for the year was £832,538 (2016: £811,605). The liability owed to the pension schemes at 31 October 2017 was £106,710
(2016: £59,103).
33.
34.
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35.
EMPLOYEE SHARE OWNERSHIP TRUST
The Company operates an employee share ownership trust (ESOP). As at 31 October 2017, 8,724 ordinary 25p shares (2016: 55,841
ordinary 25p shares) were held by the trust with an aggregate market value of £43,183 (2016: £308,242). The assets, liabilities, income
and costs of the ESOP are incorporated into the financial statements of the Group.
36.
RELATED PARTY TRANSACTIONS
During the year sales and purchases took place between the Group and a number of its Directors. All transactions were carried out on
an arm’s length basis.
Transactions with Key Management Personnel
Key management personnel are considered to be Directors and their remuneration is disclosed within the Director’s Remuneration
disclosure (note 9).
J J McCarthy
K R Greetham
D A T Evans
B P Roberts
P M Kirkham
H J Richards
S J Ellwood
Total sales
Balance outstanding
2017
£
-
604
2016
£
-
887
223,422
201,198
295
304
314,071
279,928
2017
£
-
189
62,486
47
34,454
2,704,798
2,284,821
1,073,974
-
-
-
2016
£
-
20
38,188
24
22,135
51,503
-
3,243,190
2,767,138
1,171,150
111,870
At the year end, the Group had balances outstanding with Just for Pets Limited, a company whose Directors include Mr D A T Evans and
Mr B P Roberts, which ceased to be a subsidiary of the Group on 10 October 2017.
Receivables from Just for Pets Limited
Payables to Just for Pets Limited
2017
£
£103,957
(£151,587)
(£47,630)
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Wynnstay Group Plc
Notes to the Financial Statements continued
37.
CASH GENERATED FROM/(USED IN) CONTINUING OPERATIONS
Profit/(Loss) for the year from continuing operations
Adjustments for:
Tax
Dividend received
Investment impairment
Depreciation of tangible fixed assets
Amortisation of other intangible fixed assets
Profit on disposal of property, plant and equipment
Interest income
Interest expense
Share of results of joint ventures and associates
Share-based payments
Changes in working capital (excluding effects of
acquisitions and disposals of subsidiaries):
(Increase)/decrease in short term loan to joint venture
(Increase)/decrease inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in payables
Cash generated from continuing operations
Group
Company
2017
£000
6,305
1,359
-
60
2,657
14
(73)
(66)
219
(197)
142
(58)
(1,048)
(13,654)
10,393
6,053
(Restated)
2016
£000
5,771
1,436
-
-
2,448
15
(127)
(69)
208
(67)
63
16
607
(1,862)
38
8,477
2017
£000
(3,166)
(19)
(1,900)
5,354
299
-
-
-
-
-
142
(58)
-
99
(213)
538
2016
£000
1,199
112
(1,100)
-
288
-
-
-
-
-
63
16
-
2,161
9
2,748
38.
EVENTS ARISING AFTER THE END OF THE REPORTING PERIOD
On 1 November 2017, Glasson Grain Limited entered into a business combination and acquired 100% of certain trade and assets,
which together comprise a mill and related processing facilities, located at Montrose in Scotland. The business is intended to be run as
a going concern. The acquisition will enable Glasson Grain Limited to better service customers throughout Scotland. The consideration
was £550,000, which is represented by £1 paid on 1 November 2017 and £549,999 payable by 1 November 2020. The payment of
the deferred consideration is contingent on the resolution of certain conveyancing issues which management expect to be satisfactorily
resolved within the three year period.
The business combination accounting is in progress and will be completed before the next reporting period.
Assets acquired:
Property, plant and equipment
Consideration
£000
550
550
The Directors consider it impractical to estimate the recent historical financial performance of the acquired trade and assets, as the
operation was one element of a larger business recently initially acquired by Origin UK Operations Limited, and which was subsequently
required to be divested for competition remedy purposes.
78
www.wynnstay.co.uk Shareholder
Information
Notice of Annual General Meeting
Notes to Notice of Annual General Meeting
Financial Calendar
Shareholder Fraud Warning
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Wynnstay Group Plc
Notice of the Annual General Meeting
Notice is hereby given that the twenty fifth
Annual General Meeting (the “Meeting”) of
Wynnstay Group Plc (the “Company”) will be
held in The Sovereign Suite, Shrewsbury Town
Football Club, Oteley Road, Shrewsbury,
Shropshire, SY2 6ST on Tuesday 20 March,
2018 at 11.45am to transact the following
business:
ORDINARY BUSINESS
1. To receive and adopt the Company’s
annual accounts for the financial year
ended 31 October 2017 together with the
Directors’ Report and Auditors’ Report on
those accounts.
2. To declare a final dividend for the year
ended 31 October 2017.
3. To reappoint the following Director who
retires by rotation under Article 91:
James John McCarthy
4. To reappoint the following Director who
retires by rotation under Article 91:
Howell John Richards
for
the Directors
5. To reappoint, at a remuneration to be
determined by the Directors KPMG LLP as
auditors, to hold office from the conclusion
of the Meeting to the conclusion of
the competitive review process to be
the
conducted by
position of the Company’s auditors within
a three month period of the passing of this
resolution. KPMG LLP have expressed
their willingness to be considered
in
review process and
the competitive
thereafter, should they be unsuccessful
in such review, have undertaken to resign
as auditor and the Directors in such
circumstances be then authorised hereby
to appoint a new auditor pursuant to
s.489(3)(c) of the Companies Act 2006 as
if a casual vacancy in the office of auditor
had occurred, with such appointment to
be until the conclusion of the next Meeting
at which accounts are laid before the
Company, and at a remuneration to be
determined by the Directors.
SPECIAL BUSINESS
To consider and, if thought fit, pass the
following Resolutions which will be proposed
as Special Resolutions:
(the “Act”)
6. That, the Directors be and they are hereby
generally and unconditionally authorised
for the purposes of Section 551 of the
Companies Act 2006
to
exercise all powers of the Company to
allot equity securities up to an aggregate
nominal amount of £450,000 provided
that this authority shall, unless renewed,
varied or revoked by the Company in
General Meeting, expire on the earlier of
the next Annual General Meeting of the
80
approximately 2.6% of the Company’s
issued ordinary share capital);
(b) the minimum price which may be paid for
such shares is £0.25 per share;
(c) the maximum price which may be paid
for an Ordinary Shares shall not be more
than 5% above the average of the middle
market quotations for an ordinary share as
derived from the London Stock Exchange
Daily Official List for the five business days
immediately preceding the date on which
the ordinary share is purchased;
(d) unless previously renewed, varied or
revoked, the authority conferred shall
expire at the conclusion of the Company’s
next Annual General Meeting or 15
months from the date of passing this
Resolution, if earlier; and
(e) the Company may make a contract or
contracts to purchase Ordinary Shares
under the authority conferred prior to
the expiry of such authority which will or
may be executed wholly or partly after the
expiry of such authority and may make a
purchase of ordinary shares in pursuance
of any such contract or contracts.
By order of the Board
Paul Roberts
30 January 2018
Company Secretary
Wynnstay Group Plc
Eagle House
Llansantffraid-ym-Mechain
Powys
SY22 6AQ
Company and 15 months from the date
of this Resolution save that the Company
may, before such expiry, make an offer or
agreement which would or might require
relevant securities to be allotted after such
expiry, and the Directors may allot relevant
securities in pursuance of such offer
or agreement notwithstanding that the
authority conferred by this Resolution has
expired. This authority is in substitution
for all previous authorities conferred upon
the Directors pursuant to Section 551 of
the Companies Act 2006, but without
prejudice to the allotment of any relevant
securities already made or to be made
pursuant to such authorities.
7. That, subject to passing Resolution 6
earlier, the Directors be and they are
empowered pursuant to Section 570 of
the Act to allot equity securities wholly for
cash pursuant to the authority conferred
by the previous Resolution as if Section
561 of the Act did not apply to any
such allotment, provided that this power
shall be limited to the allotment of equity
securities:-
(a) in connection with an offer of such
securities by way of rights to holders of
Ordinary Shares in proportion (as nearly
as may be practicable) to their respective
holdings of such shares, but subject to
such exclusions or other arrangements
as the Directors may deem necessary
or expedient
fractional
in relation
entitlements or any legal or practical
problems under the laws of any territory,
or the requirements of any regulatory body
or stock exchange; and
to
(b) otherwise than pursuant to sub-paragraph
(a) above up to an aggregate nominal
amount of £450,000, and shall expire
on the earlier of the next Annual General
Meeting of the Company and 15 months
from the date of this Resolution save
that the Company many, before such
expiry make an offer or agreement which
would or might require equity securities
to be allotted after such expiry and the
Directors may allot equity securities in
pursuance of any such offer or agreement
notwithstanding that the power conferred
by this Resolution has expired.
8. That, the Company be and is generally
and unconditionally authorised for the
purposes of Section 701 of the Act to
make one or more market purchases
(within the meaning of Section 693 of
the Act) on the London Stock Exchange
of Ordinary Shares of £0.25 each in the
capital of the Company provided that:-
(a) the maximum aggregate number of
to be
(representing
Ordinary Shares authorised
purchased
is 500,000
www.wynnstay.co.uk
Notes to the Annual General Meeting
1. Appointment of proxies
4. Authority to purchase shares
Special resolution 8 is put forward to give
the Directors the ability to buy back and
cancel existing shares if they feel that
such action would benefit all remaining
shareholders and are normal practise for a
company of this size, and are routinely put
to shareholders.
5. Documents on display
Copies of necessary documents will be
available for at least 15 minutes prior to
the Meeting and during the Meeting.
6. Enquiries relating to the Meeting
Members are welcome to contact the
Company Secretary with any enquiries
relating to the Meeting or the Agenda
during normal business hours at any time
prior to the Meeting. Enquiries concerning
to
shareholdings should be directed
the Company’s external registrar at the
following address: Neville Registrars, 18
Laurel Lane, Halesowen, West Midlands,
B63 3DA (Tel. 0121 585 1131)
A member of the Company is entitled to
appoint a proxy to exercise all or any of
their rights to attend, speak and vote at
the Meeting. A form of proxy accompanies
this document and if it is to be used, it
must be deposited at the Companies
Head Office not less than 24 hours before
the meeting. A proxy does not need to
be a member of the Company but must
attend the Meeting to represent you.
2. Reappointment of Auditor
The Board have decided that after a tenure
of six years it would be appropriate to carry
out a competitive tender for the Group
audit for 2018. KPMG LLP have indicated
their willingness to continue in office up to
the point of the conclusion of this review
and accordingly a resolution proposing
their reappointment is submitted to the
Annual General Meeting. However to
facilitate the competitive review KPMG LLP
have expressed their willingness to resign
should they be unsuccessful, which would
enable the Directors to appoint a new
auditor in accordance with the Companies
Act 2006, and the authority sought from
shareholders in this resolution.
3. Authority to allot shares
Special resolutions 6 & 7 are put forward
to give the Directors authority to allot new
shares (including to those shareholders
exercising
to receive
their preference
dividends in the form of Scrip shares). The
resolutions limit the requested authority
to the stated maximum as an added
shareholder protection. These authorities
give the Directors the flexibility in financing
possible business opportunities and are
normal practise for a company of this size,
and are routinely put to shareholders.
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Wynnstay Group Plc
Financial Calendar
31 January 2018
Announcement of 2017 results
20 March 2018
Annual General Meeting
03 April 2018
30 April 2018
June 2018
Dividend Record Date
Payment of Final 2017 Dividends
Announcement of 2018 Interim Results
website. If you have actually lost money
to an investment fraud, you should report
it to the police using the Action Fraud
National Reporting scheme on 0300 123
2040 or http://www.actionfraud.police.
uk/.
REMEMBER, IF IT SOUNDS TOO GOOD
TO BE TRUE, IT PROBABLY IS !
Shareholder Fraud Warning
the
that as
Shareholders are advised
is a public
Company’s share
register
document, details concerning
individual
shareholdings may be available to people
who may try to use such information for
fraudulent, scam or other criminal purposes.
Extreme diligence is recommended whenever
you receive any un-solicited contact about
your Wynnstay Group Plc shares or any other
investment holding. Fraudsters can be very
persuasive and will use high pressure tactics
to try to scam investors they believe to have
disposable resources. Such contact may be
used to sell shares or other investments which
may be fake or worthless, or to try to persuade
you to dispose of existing investments for
below their market value.
The Financial Conduct Authority (FCA) has
a very useful website providing information
on known frauds and scams, and identifying
companies that may be operating in an
unauthorised or
is
likely to increase the risk associated with
doing business with them. Please visit http://
scamsmart.fca.org.uk/.
illegal manner, which
Some simple advice to avoid investment
scams and share frauds include :
1. Hang up on cold calls – if you are cold called
in relation to investment opportunities
there is a high risk that it may involve an
attempted scam. The safest thing to do is
to hang up.
2. Check out any firm – before considering
any relationship with a new individual or
firm offering financial services, check them
out on the Financial Services Register on
the FCA website. Generally all businesses
legally authorised to offer such services
will be regulated by the FCA.
3. Get impartial advice – before handing over
any money in relation to new investments,
think about seeking advice from someone
unconnected to the new contact or entity
that would receive your funds.
4. Report a scam – if you suspect you have
been approached by attempted fraudsters,
then please report it to the FCA by using
the reporting form available on the FCA
82 www.wynnstay.co.uk
Wynnstay Group Plc
Wynnstay Group Plc
01691 828512
www.wynnstay.co.uk
Registered in Wales and England