ANNUAL
REPORT
AND ACCOUNTS 2019
About Wynnstay
Financial Performance Highlights
01
Strategic Report
Principal Activities and Business Model
Wynnstay People
Group Strategy
Chairman’s Statement
Arable Event
Chief Executive’s Review
Finance Review
Innovation and Sustainability
Principal Risks and Uncertainties
Focus on Glasson
Contents
Page
3
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5
6-7
8-9
10-13
14
15-19
20-23
24-25
26-28
29
02 Corporate Governance
Board of Directors and Company Secretary
Corporate Governance Statement
Company Details and Advisors
Senior Management
Directors’ Report
Depot Network
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32
33
34-36
36
37-38
Corporate Social Responsibility
Directors’ Remuneration Report
Independent Auditor’s Report
39
40-45
46-47
48
49
50-51
Principal Accounting Policies
Notes to the Financial Statements
Consolidated and Company Balance Sheet
Consolidated and Company Cash Flow Statement
Consolidated Statement of Comprehensive Income
Consolidated and Company Statement of Changes in Equity
03 Financial Statements
04 Shareholder Information
Notes to Notice of Annual General Meeting
Notice of Annual General Meeting
Shareholder Fraud Warning
Financial Calendar
53-56
57-84
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Financial Performance Highlights - Continuing Operations
ABOUT WYNNSTAY
Wynnstay Group was established in 1918 as a farmers’ cooperative,
converting to a Plc in 1992. The core Wynnstay business supplies
goods and services to farmers and rural communities. We aim to be
the supplier of choice, by helping farmers prosper through off ering a
diverse product range supported by specialist technical advice and,
where applicable, innovative and sustainable products.
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Employee Numbers
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Group Revenue
£490.60m + 6.04%
2018: £462.66m
Earnings per Share
30.95 pence - 20.86%
2018: 39.11 pence
Profi t before Tax
£7.55m
2018: £9.53m
- 20.74%
Shareholders’ Funds
£94.95m
2018: £91.07m
+ 4.25%
Underlying Pre-tax Profi t*
Dividend per Share
£8.01m
2018: £9.60m
- 16.58%
14.00 pence + 4.79%
2018: 13.36 pence
6.04%
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-20.74%
-20.86%
4.79%
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Group Revenue (£m)
Profi t before Tax (£m)
Earnings per Share (pence)
Dividend per Share (pence)
£490.60m
£7.55m
30.95p
14.00
*Underlying pre-tax profi t is a non-GAAP (generally accepted accounting principles) measure and is not intended as a substitute for GAAP measures and may not be calculated
in the same way as those used by other companies. Refer to the Finance Review for an explanation on how this measure has been calculated and the reasons for its use.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Key Strengths
A robust and balanced business model with
two complementary divisions - Agriculture and
Specialist Agricultural Merchanting
A strong balance sheet with the capacity to
support future growth
Committed and loyal colleagues who off er
technical advice to support the prosperity of
our farmer customer base through effi ciencies
and new innovations
A broad range of agricultural products,
including innovative and sustainable products,
marketed via a multichannel sales off ering
future growth
for
fragmented
Opportunities
currently
economy by
though organic and focused acquisitions
into the
rural
increased geographic reach
farming and
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Principal Activities and Business Model
The business model is aligned with the buying needs and habits of our farming customer base, which includes arable, livestock and mixed farms.
The Group is committed to sustained development within the agricultural sector and strives for continued growth with a view to optimising the
return to all stakeholders.
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Agriculture
Comprises the manufacturing and supply of a comprehensive
range of agricultural inputs to customers across many parts
of the UK
Specialist Agricultural Merchanting
Supplies specialist agricultural and associated sundry products
to customers throughout Wales, Midlands, North West and
South West of England
DEPOTS
The Group’s Specialist Agricultural Merchanting depots are well
established and provide a comprehensive range of products for
farmers and rural dwellers. The Group operates 55 depots across
Wales, the Midlands, North West and South West England, supplying
to farmers, small holders and rural dwellers.
Our team is trained to help customers with technical advice and our
customers can purchase via depot, catalogue or van service.
We partner with pharmaceutical companies to provide specialist
advice on animal health and other agricultural products
YOUNGS ANIMAL FEEDS
Youngs Animal Feeds operates from its production facility at Standon,
Staff ordshire, and three other locations, selling a range of equine and
small animal feeds through to wholesalers and retailers in Wales and
the Midlands. The Molichop branded equine feed range is a market
leading product.
FEED
The Group operates two multi-species compound feed mills and one
blending plant, off ering a full range of animal nutrition products to the
agricultural market in bulk or bags. Third party mills are also used to
satisfy additional seasonal and geographic requirements.
GLASSON
Glasson operates from Glasson Dock, near Lancaster. It is a producer
of blended fertiliser, a supplier of feed raw materials and a manufacturer
of added-value products to specialist animal feed retailers.
The business operates fertiliser blending manufacturing facilities at
Winmarleigh, Goole and Montrose, and also sources from a facility at
Birkenhead. It is currently the second largest fertiliser blender in the
UK.
Glasson complements the Group strategy by providing a further
internal hedge against commodity volatility in the agricultural supply
sector.
ARABLE
The Group’s arable activities supply a wide range of products to arable
and grassland farmers, including seed, fertiliser and agro-chemicals.
Seed processing facilities are located at Shrewsbury, Shropshire and
Selby, Yorkshire.
GRAINLINK
GrainLink is the Group’s in-house grain marketing company and
provides farmers with an independent professional marketing service
backed by the fi nancial security of the Wynnstay Group. The Company
has access to major markets for specialist milling and malting grain as
well as feed into mills. GrainLink operates from Shrewsbury, Shropshire
and Grantham, Lincolnshire.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Wynnstay People
Our colleagues are the backbone of our business and our strategy is to recruit, develop
and retain the right people to provide excellent customer service and specialist technical
advice. We do this by targeting recruitment at suitability qualifi ed and experienced
personnel, and providing training through a mixture of mentoring from experienced
colleagues and training for externally recognised qualifi cations. A future generation
management and leadership development scheme has been introduced to support
succession planning, in partnership with Cardiff Metropolitan University. We recognise
the achievements of colleagues and acknowledge service milestones.
My qualifi cation enables me
to give specialist advice to our
customers. I have colleagues who
cover dairy, arable, poultry, sheep
& beef, agronomy, animal health,
calf & youngstock and hardware
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
My management and
leadership development is
helping to meet the future
needs of the business by
focusing on leadership,
innovation and growth
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My 25 years of service
was marked with a long
service award and lunch
attended by the Chairman
and Chief Executive
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Group Strategy
GROWTH STRATEGY
The Group is confi dent that macro-economic factors, including world
population growth and the need for higher levels of national self-
suffi ciency, should continue to make the UK a strong and growing food
producer. In addition, the UK farming sector benefi ts from a favourable
growing climate.
The fragmented nature of the UK’s agricultural supplies market presents
growth opportunities, and the Group has demonstrated its ability to
increase its market share organically and through complementary
acquisitions. Wynnstay has completed over 50 corporate transactions
and expanded its supplied product range to more than 25,000 SKU’s
(stock keeping units or individual product items). It has become a
preferred route-to-market for many of its main suppliers.
The Group’s strategy focuses on developing these twin strands of acquisitive and organic growth as follows:
ACQUISITION
ORGANIC
Act as consolidator in the UK agricultural supply
sector
Enhance relationships with key customers
through CRM
Continue ‘bolt-on’ geographic transactions
Maximise cross-selling opportunities, supported
with technical advice from trained colleagues
Seek larger opportunities to complement existing
activities and enhance economies of scale
Develop new sales channels, including on-line &
specialist digital catalogues
Explore opportunities for innovative and sustainable
products
Seek new depot and operating centre opportunities
to grow footprint & increase effi ciencies
Continuous
investment
development to off er innovative products
in
research and
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
CORPORATE GOALS
Customers – where the Group seeks to excel
in terms of range, value, quality and service
Shareholders – the Group focuses on fi nancial
performance that supports a progressive
dividend policy and capital growth in share
value
Suppliers – the Group has developed a
comprehensive network of
relationships
with suppliers, and constantly reviews the
marketplace for innovative products. It acts as
a valuable channel-to-market for the supplier
base
Colleagues – the Group aims to attract,
reward and develop high-quality personnel
in order to encourage the highest levels of
customer service
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OPERATIONAL STRATEGY AND LONG-TERM VIABILITY
Wynnstay’s objective is to establish itself as the ‘supplier of choice’
within its trading areas, providing a comprehensive off ering that caters
for the needs of arable, livestock and mixed farms. We place a great
deal of importance on identifying innovative products and bringing
‘best-in-class’ products to customers.
We are also investing in our advisory services to farmers, and have
strong teams of specialists in dairy, poultry, animal health, calf,
hardware, youngstock and animal farming. These technical teams
assist our customers in identifying areas to improve their production
effi ciency. As UK agriculture comes under increasing pressure to
increase effi ciency and productivity, we believe that the advisory
element of our services will become more important.
Taken together, we believe that this strategy builds customer
engagement and creates a platform for further growth.
The Group’s broad range of activities across both the livestock and
arable sectors helps to mitigate risk and even out the eff ects of sub-
sector cycles. This balanced business model is one of the Group’s
major strengths.
Our broad range of activities across agricultural supplies also helps to
even out the eff ects of sub-sector cycles and we view this approach
as a major strength.
The Board intends to maintain this balanced approach to Wynnstay’s
spread of activities.
The Board operates a strategic planning process to ensure clear
direction and focus for the strategic development of the business,
which is supported by annual budgets and cashfl ow projections.
LONG-TERM VIABILITY
The Group’s corporate plan ensures clear direction and focus for the
long-term strategic development of the business. The plan is regularly
reviewed to ensure it is up to date with changing circumstances,
allowing annual budgets set in line with long-term goals whilst still
recognising specifi c market conditions.
The Company’s growth prospects are underpinned by macro-
economic factors that point to increased worldwide demand for
agricultural produce, and the ability of the UK agriculture sector to feed
and benefi t from this demand.
While Brexit has presented our sector with signifi cant uncertainty
over the past few years, the Board remains optimistic for the future
of the UK agricultural industry and is encouraged by the prospect
that 2020 could bring greater clarity. The UK Agricultural Bill presents
a framework focused on economic resilience and public money for
public goods, with fi nancial support guaranteed to 2022. The eff ects of
the implementation of this legislation, as well as the UK’s forthcoming
exit from the EU, will be given careful consideration in the ongoing
development of the business.
EXPERT
ADVISORS
DELIVERY TO
FARMS
COLLECTION
BY FARMERS
DEPOTS
SPECIALIST
CATALOGUES
& ONLINE
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Chairman’s Statement
Results refl ect
diffi cult market
conditions for
the agricultural
sector
OVERVIEW
FINANCIAL RESULTS
The Group’s full year results refl ect an especially diffi cult year for the
agricultural sector as a whole. Lower farmgate prices and ongoing
political uncertainty around Brexit adversely aff ected farmer confi dence,
leading to reduced spending. Wynnstay’s trading performance was
also held back by the abnormally warm winter weather in the fi rst half
of the fi nancial year, which reduced feed sales and other weather-
related products during key trading months.
Underlying Group pre-tax profi t* (the Board’s preferred alternative
performance measure) from continuing operations is down by £1.59m
year-on-year to £8.01m (2018: £9.60m), and reported profi t before tax
was £7.55m (2018: £9.53m). Revenue of £490.60m (2018: £462.66m)
was higher year-on-year refl ecting commodity price infl ation.
Within our Agriculture Division, feed volumes contracted signifi cantly
but the reduction was in line with market trends, while Glasson Grain
delivered an exceptionally strong performance, driven by increased
fertiliser volumes, refl ecting market share gains in Scotland, and higher
sales of specialist added-value animal feed products. The good harvest
in 2019 helped to generate an above-average sector performance
from GrainLink, our grain trading operation, and the seeds operation
performed well in challenging conditions.
The performance of our Agricultural Merchanting Division was similarly
aff ected. Lower demand for bagged feed and feed-related products
were the principal factors behind its reduced contribution to Group
profi ts. We rationalised our depot network from 59 sites in 2018 to
55 by the end of the fi nancial year. This followed the acquisition in
April 2019 of Stanton Farm Supplies, the van-based specialist dairy
products supplier that operates in Somerset, and the 2018 acquisition
of a number of former Countrywide stores in the South West of
England. We continue to focus on developing our specialist advisory
services, so that we can assist customers with advice on the latest
farming products and methods.
Our Arable Event, which highlights innovation in arable farming,
attracted over 1,000 farmers in June 2019 and helps to emphasise
Wynnstay’s position as a trusted supplier partner and value-added
specialist adviser.
Revenue increased by £27.94m to £490.60m (2018: £462.66m), with
much of this growth accounted for by higher unit commodity prices.
The Agriculture Division generated £358.69m of revenue (2018:
£334.34m), refl ecting higher average commodity values particularly
in feed and fertiliser products. The Specialist Agricultural Merchanting
Division generated £131.84m in revenue (2018: £128.26m), with a full
year contribution from the former Countrywide depots acquired in April
2018. Like-for-like sales, however, showed a small reduction of 3.5%
as the mild winter reduced demand for bagged feed products.
Reported profi t before taxation on an IFRS basis was £7.55m (2018:
£9.53m). Underlying Group pre-tax profi t*, which includes the gross
share of results from joint ventures and associates, but excludes
share-based payments and non-recurring items and is the Board’s
preferred alternative performance measure, was £8.01m (2018:
£9.60m). Including contributions from joint ventures, the Agriculture
Division contributed £2.95m (2018: £4.29m) to this result, and the
Specialist Agricultural Merchanting Division £5.24m (2018: £5.53m).
Other activities showed a small loss of £0.05m (2018: loss of £0.09m).
Non-recurring business combination and reorganisation costs of
£0.30m were incurred during the year, and net fi nance costs were
similar to last year at £0.18m (2018: £0.19m). Profi t after taxation was
£6.13m (2018: £7.71m), and basic earnings per share was 30.95p
(2018: 39.11p).
Continued strong cash generation together with tight control of working
capital resulted in a net cash position at the year-end of £3.84m (2018:
net debt of £0.98m).
Balance sheet net assets stood at £94.95m (2018m: £91.07m) at the
year-end equating to £4.79 (2018: £4.62) per share, and the return on
net assets was 8.5% (2018: 10.6%).
*Underlying pre-tax profi t is a non-GAAP (generally accepted accounting principles)
measure and is not intended as a substitute for GAAP measures and may not be
calculated in the same way as those used by other companies. Refer to the Finance
Review for an explanation on how this measure has been calculated and the reasons
for its use.
improving effi ciencies within our
We continued
manufacturing, distribution and processes across the Group, and this
will be an ongoing priority for our operations.
focus on
to
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
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DIVIDEND
The Board is pleased to propose the payment of a fi nal dividend of
9.40p per share, which together with the interim dividend of 4.60p per
share, paid on 31 October 2019, takes the total dividend for the year
to 14.00p, an increase of 4.8% on last year (2018: 13.36p). The fi nal
dividend will be paid on 30 April 2020 to shareholders on the register
on 27 March 2020. 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 2020.
COLLEAGUES
Our colleagues across the Group continue to show great dedication,
commitment and motivation. On behalf of the Board I would like to
thank them for their signifi cant input and hard work over the year.
OUTLOOK
The trading environment for the agricultural supplies sector remains
challenging. Farmgate prices are generally lower than a year ago, and
the detail of what Brexit means for the agricultural industry remains
uncertain - although the Government has made clear its support
for UK farmers and outlined proposals that emphasise environmental
management and effi ciency. We therefore anticipate that farmers will
remain circumspect in their spending and investment plans over 2020.
Against this background, the high level of forage stocks on farms has
reduced feed demand, and the wet weather conditions over recent
months have decreased the acreage of winter cereals that farmers
have been able to plant.
Nonetheless, Wynnstay’s wide spread of activities provides a robust
platform and we continue with plans to reduce costs, optimise
margins, invest in our manufacturing facilities, systems and skill base,
supported by Wynnstay’s strong balance sheet. In addition, we will
continue to review acquisition opportunities to strengthen our existing
activities.
We see opportunities to further develop our relationship with farmer
customers and supplier partners, in particular as UK farmers seek to
implement initiatives to enhance effi ciencies and drive environmental
standards. Our focus is advising on and supplying products, ideas and
practices that will facilitate both goals.
Whilst there has been understandable weakness in the agricultural
sector in the short-term, the Board is confi dent that Wynnstay’s
medium and long-term prospects within the industry remain strong.
Jim McCarthy
Chairman
21 January 2020
Focus on advisory
services to support
farm effi ciency and
environmental goals
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Datganiad Y Cadeirydd
Mae’r canlyniadau yn
adlewyrchu amodau
anodd yn y farchnad
ar gyfer y sector
amaethyddol
TROSOLWG
Mae canlyniadau blwyddyn lawn y Grŵp yn adlewyrchu blwyddyn
arbennig o anodd i’r sector amaethyddol cyfan. Gwnaeth prisiau is
wrth gât y ff erm ac ansicrwydd gwleidyddol parhaus ynghylch Brexit
gael eff aith andwyol ar hyder ff ermwyr, gan arwain at lai o wariant.
Eff eithiodd tywydd anarferol o gynnes y gaeaf yn ystod hanner cyntaf
y fl wyddyn ariannol ar berff ormiad masnachu Wynnstay, gan leihau
gwerthiannau porthiant a chynhyrchion eraill yn ymwneud â’r tywydd
yn ystod misoedd masnachu allweddol.
Mae elw cyn treth sylfaenol y Grŵp* (y mesur perff ormiad amgen a
ff efrir gan y Bwrdd) o weithrediadau parhaus wedi gostwng £1.59m,o
fl wyddyn i fl wyddyn i £8.01m (2018: £9.60m) ac roedd yr elw cyn treth
cofnodedig yn £7.55m (2018: £9.53m). Roedd y refeniw o £490.60m
(2018: £462.66m) yn uwch o fl wyddyn i fl wyddyn gan adlewyrchu
chwyddiant mewn prisiau nwyddau.
Er y cafwyd gostyngiad sylweddol yng nghyfeintiau porthiant yn ein
His-adran Amaeth, roedd yn cyd-fynd â thueddiadau’r farchnad.
Perff ormiodd Glasson Grain yn arbennig o gadarn wedi ei hybu gan
gynnydd mewn cyfeintiau gwrtaith, gan adlewyrchu enillion cyfran y
farchnad yn yr Alban a chynnydd mewn gwerthiannau cynhyrchion
porthiant anifeiliaid gwerth ychwanegol arbenigol. Helpodd y cynhaeaf
da yn 2019 i sicrhau perff ormiad gwell na’r cyfartaledd yn y sector
gan GrainLink, sef ein gweithrediad masnachu ŷd, a pherff ormiodd yr
ymgyrch hadau yn dda yn wyneb amodau heriol.
Eff eithiwyd ar berff ormiad ein His-adran Masnachu Amaethyddol
yn yr un modd. Y galw llai am borthiant artiffi sial a chynhyrchion yn
ymwneud â phorthiant oedd y prif resymau dros gyfraniad is yr Is-
adran i elw Grwpiau. Gwnaethom ad-drefnu ein rhwydwaith depo
o 59 o safl eoedd yn 2018 i 55 erbyn diwedd y fl wyddyn ariannol.
Roedd hyn yn dilyn caff ael Stanton Farm Supplies ym mis Ebrill
2019, sef y dosbarthwr cynhyrchion llaeth arbenigol mewn faniau
yng Ngwlad yr Haf, a chaff ael sawl siop Countrywide gynt yn 2018
yn Ne-orllewin Lloegr. Rydym yn parhau i ganolbwyntio ar ddatblygu
ein gwasanaethau cynghori arbenigol, fel y gallwn helpu cwsmeriaid
drwy roi cyngor iddynt ar y cynhyrchion a’r dulliau diweddaraf ym maes
ff ermio.
Gwnaeth ein Digwyddiad Tir Âr, sy’n tynnu sylw at arloesedd mewn
ff ermio tir âr, ddenu dros 1,000 o ff ermwyr ym mis Mehefi n 2019 ac
mae’n helpu i bwysleisio safl e Wynnstay fel partner cyfl enwi y gellir
ymddiried ynddo a chynghorydd arbenigol gwerth ychwanegol.
Gwnaethom barhau i ganolbwyntio ar wella arbedion eff eithlonrwydd
yn ein dulliau gweithgynhyrchu a dosbarthu a’n prosesau, ym mhob
rhan o’r Grŵp, a byddwn yn parhau i fl aenoriaethu hyn yn ein
gweithrediadau.
CANLYNIADAU ARIANNOL
Cynyddodd y refeniw £27.94m i £490.60m (2018: £462.66m),
gyda phrisiau nwyddau uwch fesul uned yn gyfrifol am lawer o’r
cynnydd. Gwnaeth yr Is-adran Amaeth greu refeniw o £358.69m
(2018: £334.34m), gan adlewyrchu gwerthoedd nwyddau uwch ar
gyfartaledd yn enwedig ar gyfer cynhyrchion porthiant a gwrtaith.
Gwnaeth yr Is-adran Masnachu Amaethyddol Arbenigol greu refeniw o
£131.84m (2018: £128.26m), yn ogystal â chaff ael cyfraniad blwyddyn
lawn gan ddepos Countrywide gynt ym mis Ebrill 2018. Fodd bynnag,
dangosodd gwerthiannau tebyg am debyg ostyngiad bach o 3.5%
gan fod y gaeaf mwyn wedi lleihau’r galw am gynhyrchion artiffi sial.
Roedd yr elw y rhoddwyd gwybod amdano cyn treth ar sail IFRS yn
£7.55m (2018: £9.53m). Roedd elw cyn treth sylfaenol y Grŵp* a gaiff
ei ddefnyddio fel y mesur perff ormiad amgen a ff efrir gan y Bwrdd,
sy’n cynnwys cyfran gros y canlyniadau o fentrau ar y cyd a chwmnïau
cyswllt, ond nad yw’n cynnwys taliadau yn seiliedig ar gyfranddaliadau
ac eitemau anghylchol, yn £8.01m (2018: £9.60m). Yn cynnwys
cyfraniadau gan fentrau ar y cyd, gwnaeth yr Is-adran Amaeth gyfrannu
£2.95m (2018: £4.29m) i’r canlyniad hwn a chyfrannodd yr Is-adran
Masnachu Amaethyddol Arbenigol £5.24m (2018: £5.53m). Gwnaeth
gweithgareddau eraill golled fach o £0.05m (2018: colled o £0.09m).
Aed i gostau cyfuno ac ad-drefnu busnes anghylchol o £0.30m yn
ystod y fl wyddyn, ac roedd y costau cyllid net yn debyg i’r llynedd,
sef £0.18m (2018: £0.19m). Roedd elw ar ôl treth yn £6.13m (2018:
£7.71m), ac roedd yr enillion sylfaenol fesul cyfranddaliad yn 30.95c
(2018: 39.11c).
Nid yw elw cyn treth sylfaenol yn fesur Egwyddorion Cyfrifyddu a Dderbynnir yn Gyff redinol (GAAP) ac ni fwriedir iddo ddisodli mesurau GAAP ac ni ellir ei gyfrifo yn yr un ff ordd
ag y mae cwmnïau eraill yn ei ddefnyddio. Cyfeiriwch at Nodyn 17 i gael esboniad o’r ff ordd y cafodd y mesur hwn ei gyfrifo a’r rhesymau dros ei ddefnyddio. Dylid cyfeirio at yr
Adolygiad Cyllid er mwyn cael esboniad o sut y cyfrifwyd y mesur hwn a’r rhesymau dros ei ddefnyddio.
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Yn sgil lefelau cynhyrchu arian cryf parhaus a rheoli cyfalaf gweithio yn
ofalus, cafwyd sefyllfa arian parod net o £3.84m ar ddiwedd y fl wyddyn
(2018: dyled net o £0.98m).
Cyfanswm asedau net y fantolen oedd £94.95m (2018: £91.07m)
ar ddiwedd y fl wyddyn sy’n cyfateb i £4.79 (2018: £4.62) fesul
cyfranddaliad, a’r adenillion ar asedau net oedd 8.5% (2018: 10.6%).
DIFIDEND
Mae’r Bwrdd yn falch o gynnig talu difi dend terfynol o 9.40c fesul
cyfranddaliad, sydd, gyda’r difi dend interim o 4.60c fesul cyfranddaliad,
a dalwyd ar 31 Hydref 2019, yn rhoi cyfanswm difi dend o 14.00c am
y fl wyddyn, sy’n gynnydd o 4.8% ers y llynedd (2018: 13.36c). Caiff
y difi dend terfynol ei dalu ar 30 Ebrill 2020 i gyfranddalwyr sydd ar y
gofrestr ar 27 Mawrth 2020. Bydd difi dend sgrip amgen ar gael o hyd,
fel mewn blynyddoedd blaenorol. Y dyddiad olaf ar gyfer dewis cael
difi dend sgrip fydd 16 Ebrill 2020.
CYDWEITHWYR
Mae ein cydweithwyr ym mhob rhan o’r Grŵp yn parhau i ddangos
llawer o ymroddiad, ymrwymiad a chymhelliant. Ar ran y Bwrdd, hoff wn
ddiolch iddynt am eu holl fewnbwn a’u gwaith caled dros y fl wyddyn.
RHAGOLWG
Mae’r amgylchedd masnachu ar gyfer y sector cyfl enwadau
amaethyddol yn parhau i fod yn heriol. Ar y cyfan, mae prisiau wrth
gât y ff erm yn is na phrisiau’r llynedd, ac mae ansicrwydd o hyd ynglŷn
â sut y bydd Brexit yn eff eithio ar y diwydiant amaethyddol - er bod
y Llywodraeth wedi dangos ei chefnogaeth i ff ermwyr y DU yn glir
ac wedi nodi’r cynigion sy’n pwysleisio rheolaeth ac eff eithlonrwydd
amgylcheddol. Felly, rydym yn rhagweld y bydd ff ermwyr yn parhau i
fod yn ofalus gyda’u gwariant a’u cynlluniau buddsoddi yn ystod 2020.
Yn erbyn y cefndir hwn, mae’r lefel uchel o stociau cnydau porthiant ar
ff ermydd wedi lleihau’r galw am borthiant ac mae’r tywydd gwlyb dros
y misoedd diwethaf wedi lleihau’r erwau o rawnfwydydd y gaeaf y mae
ff ermwyr wedi gallu eu plannu.
Er hyn, mae’r amrywiaeth eang o weithgareddau Wynnstay yn darparu
llwyfan cadarn ac rydym yn parhau i geisio lleihau costau, sicrhau’r
maint elw mwyaf posibl, buddsoddi yn ein cyfl eusterau, ein systemau
a’n sgiliau gweithgynhyrchu, gan ddefnyddio mantolen gadarn
Wynnstay. Yn ogystal â hyn, byddwn yn parhau i ystyried cyfl eoedd
caff ael i gryfhau’r gweithgareddau rydym eisoes yn eu cynnal.
Credwn fod cyfl eoedd i ddatblygu ein perthynas ymhellach â
chwsmeriaid sy’n ff ermwyr a phartneriaid cyfl enwi, yn enwedig
gan fod ff ermwyr y DU yn ceisio rhoi mentrau ar waith i wella
arbedion eff eithlonrwydd a llywio safonau amgylcheddol. Rydym yn
canolbwyntio ar ddarparu cynhyrchion, syniadau ac arferion a fydd yn
hwyluso’r ddau nod a rhoi cyngor arnynt.
Er bod gwendid dealladwy wedi bod yn y sector amaethyddol yn y
tymor byr, mae’r Bwrdd yn hyderus bod rhagolygon tymor canolig a
hirdymor Wynnstay yn y diwydiant yn parhau i fod yn gadarn.
Jim McCarthy
Cadeirydd
21 Ionawr 2020
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mwy o nwyddau
amgylcheddol
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Established in 2013,
the Arable Event
is held annually at
Woodlands Farm,
Weston Under
Lizard.
With the Arable Event now
into its 8th year and with
an attendance for 2019
of over 1,500 visitors and
exhibitors on the day,
the event has proved
a popular day out for
farmers who use the day
to receive updates on new
technology and the latest
cereal varieties.
It has become the key
practical demonstration
for arable farmers in
the west of the UK. The
Event features key note
speakers, a machinery
demonstration area and
trade stands from a variety
of agricultural businesses.
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Chief Executive’s Review
Investment
across the group
continued
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JOINT VENTURES AND ASSOCIATES
The Group has three joint venture businesses, Bibby Agriculture
Limited, Wyro Developments Limited and Total Angling Limited as well
as an associate company, Celtic Pride Limited. The Bibby business
performed very strongly, increasing market share, especially within the
dairy sector. This helped to drive an increase in the combined profi t
contribution from the four businesses.
COLLEAGUES
It has been a challenging year and I am proud of the way colleagues
have responded. Wynnstay is in a stronger position as a result, and I
would like to thank everyone for their contribution and commitment.
OUTLOOK
UK Government support for farmers in the forthcoming year will
continue in its current form. It is set to change in the longer-term
with the UK’s exit from the European Union and national schemes
are expected to be introduced to support effi ciency at farm level.
New Environmental Land Management Schemes (ELMS) will also
be introduced to incentivise and reward farmers for environmental
outcomes. In the very short-term though, ongoing uncertainties are
likely to continue to stifl e investment on farms.
Farmer sentiment remains sensitive to farmgate prices, with milk, beef
and egg prices lower than a year ago. Global supply and demand for
lamb has lifted sheep prices though, which bodes well for 2020. Feed
volumes so far have been adversely aff ected by the on-farm forage
stocks, and sales are behind the equivalent point last year. Given the
signifi cant reduction in autumn cereal planting that resulted from the
prolonged wet weather we also anticipate lower cereal tonnages for
trading later in the year.
We continue to concentrate on improving effi ciencies, building on
the work of the last fi nancial year. In addition, we plan to expand our
technical teams both on-farm and in our specialist agricultural depots,
and to strengthen our digital and precision farming off ering. Sourcing
and accessing innovative products to our farming customers remains
an important part of our overall off ering. We are engaging with the
National Farmers Union’s goal of reach ‘net zero’ greenhouse gas
emissions across the whole of agriculture in England and Wales by
2040.
Although we anticipate that the agricultural sector will continue
to experience a diffi cult period, we believe that Wynnstay is well-
positioned to navigate through and is well-placed to seek opportunities
for growth.
INTRODUCTION
including generally weaker
Wynnstay’s performance was delivered against a diffi cult agricultural
backdrop,
farmgate prices. Farmer
sentiment over the year was also signifi cantly aff ected by uncertainties
over Brexit. Combined, these factors resulted in farm businesses
holding off investment decisions and created margin pressure in
certain product categories.
The exceptionally warm winter months and the early spring, together
with a good grass growing summer, reduced farmers’ need to
purchase feed and feed-related products across the year as a whole,
and the impact of this was felt in both the Agriculture and Specialist
Agricultural Merchanting Divisions.
Fertiliser and grass seed sales benefi ted from the early spring, however
the wetter summer subdued demand for arable inputs in the second
half of the year.
Glasson Grain Limited, with its broad-base of activities in raw
material trading, added-value feed products and blended fertiliser
manufacturing, performed exceptionally well. The fertiliser business in
particular performed very strongly, consolidating our position as the
second largest fertiliser blender in the UK.
In a diffi cult marketplace, GrainLink, which markets and trades grain,
performed well, increasing its tonnage. This was helped by the
Grantham trading offi ce, which was opened in late spring 2019 and
made good progress.
A key feature of the year was the introduction of cost reduction
and effi ciency programmes. Our investment across manufacturing,
distribution and systems will support improved effi ciencies and is
ongoing.
We believe that the ability to provide the latest technical and product
advice to our customers is fundamental to securing their business
in the future. We therefore continued to invest in our colleagues in
line with our objective to improve Wynnstay’s proposition as a value-
added adviser. We added to our on-farm technical teams, which span
the dairy, youngstock, poultry, animal health, hardware and arable
cropping sectors, in particular by appointing a National Sheep & Beef
Specialist. We were able to introduce precision farming techniques to
both our livestock and arable farmer customers, through feeding and
nutrient management programmes that use new technologies sourced
from our innovative suppliers and associates.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Chief Executive’s Review continued
AGRICULTURE DIVISION
Glasson Grain
The Agriculture Division’s main activities comprise the manufacture and
processing of feed, fertiliser and seeds as well as other agricultural
inputs. Glasson Grain and GrainLink also form part of this Division.
Total revenues amounted to £358.69m (2018: £334.34m), mainly
refl ecting higher commodity prices, and the operating profi t, including
the contribution from joint ventures, was £2.95m (2018: £4.29m). The
decrease in operating profi t year-on-year mainly refl ected reduced
customer demand, especially for feed.
Feed Products
Feed products are manufactured at our main facilities at Llansantff raid
and Carmarthen as well as at a smaller blending facility at Rhosfawr.
We manufacture a broad range of ruminant and monogastric feeds,
in both loose bulk and a variety of bagged sizes. We also sell raw
materials to farmers and other feed manufacturers. The wide range
of feed that we off er, supplying dairy, beef, sheep, pig and poultry
producers, is a strength, helping to mitigate variation in demand
across the sub-sectors. Our product ranges are complemented by our
technical sales colleagues who are able to advise customers on all
aspects of animal nutrition.
Feed volumes were signifi cantly impacted during the year by weather
conditions, and sales were sharply behind last year’s record result,
but in line with market trends. The exceptionally mild winter and early
spring reduced demand during the key trading period, after which the
excellent grass growing summer reduced the need for bought-in feeds
and feed-related products in the ruminant sector.
Sheep feed volumes in particular reduced, both in the spring lambing
season and the summer/autumn period. This refl ected the national
trend, with sheep farmers selling their lambs earlier in the year ahead
of a potential ‘hard Brexit’ in October 2019.
Dairy and beef farmers also moved feed spending to ‘straight’ feeds
as opposed to manufactured compounded and blended feed, which
adversely aff ected sales. This trend was evident nationally.
We continued to strengthen our position within the free-range egg
sector, and achieved higher volumes of poultry mash, despite egg
prices remaining subdued. This was helped by our team of poultry
specialists who provide a value-added service, advising on quality egg
production.
Our team of highly trained calf and youngstock specialists, off ering
advice and introducing innovative products and ideas to livestock
farmers, helped to drive an increase in market share in milk replacers.
Capital investment at Llansantff raid Mill has improved effi ciency in both
manufacturing and distribution. This has been refl ected in record daily
and weekly production fi gures and reduced energy unit costs over the
year.
We will continue to seek opportunities to strengthen our feed activities,
and to ensure that we support our customers with innovative, added-
value products. We also welcome the increasing attention by food
retailers on feed ingredients that are sourced in an environmentally
sustainable manner. Wynnstay is well placed in this regard to deliver
the needs of the market.
The Glasson business, which is based at Glasson Dock, near
Lancaster operates in three main areas; the supply of feed raw
materials, production of fertiliser, and manufacture of specialist added-
value animal feed products. Glasson’s dock-side location remains
an important part of its success and provides a valuable competitive
advantage. It is also the UK’s second largest blender of fertiliser.
The Glasson team delivered a record performance this year, signifi cantly
outperforming budget expectations.
Feed raw materials commodity trading performed well in a diffi cult
trading environment. After a strong start to the fi nancial year, trading
activities reduced over the spring and summer periods as demand for
bought-in feed reduced.
The fertiliser blending operations delivered an exceptional performance.
The integration of the fertiliser blending plant at Goole and continued
sales expansion at Montrose resulted in record volumes. The mild
weather and early spring encouraged farmers to apply fertiliser to their
land. This resulted in good trading volumes, although the summer
and early autumn activities were restricted by good grass growing
conditions and wet weather restoring arable planting. The ‘Glasson’
brand continues to grow and attract new business.
Specialist added-value feed products also enjoyed an exceptional year
with record volumes. The business has been successful in developing
innovative products that win new customers.
Feed sales were
impacted by
the abnormally
warm winter
Agriculture - Revenue (note 2, page 58)
2019
2018
2017
Up 7% as a result
of commodity
price infl ation
£358,687k
£334,337k
£280,870k
Agriculture - Segment Result (note 2, page 58)
2019
£2,951k
Down 31% as a
result of reduction
in feed and feed
related products
2018
2017
£4,286k
£3,337k
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Arable Products
Overall, our arable activities performed strongly
during the year.
Our seeds activities performed well despite a
number of challenges during the year. The very
early spring encouraged strong grass seed sales,
but sales dipped during the wetter summer. This
meant that overall grass seed sales were below
last year’s record levels, although margins were
maintained. Spring cereal seed volumes were lower
than the prior year’s strong performance, which
was a refl ection of the increased winter cereal
plantings of 2018 (4.0% higher than the previous
year). New legislation restricting the use of some
traditional seed dressings also challenged cereal
seed margins. Sales of autumn/winter cereal
seed were strong, although the wet weather has
signifi cantly reduced the acreage sown to date
and this will impact on the volume. It is expected
that farmers will require lower volumes of seed
next autumn since seed will be carried over from
one year to the next. However, there should be a
positive impact on spring seed sales in 2020, as
farmers plant spring cereal seed instead of winter
cereal seed.
We continue to seek innovation within the seed
business by aligning ourselves to seed breeders,
varieties and continually
introducing newer
assessing the value of new seed dressings.
Merchanted fertiliser sales for the year were below
budget but we have maintained market share. Sales
in the fi rst half of the year were higher year-on-year
as farmers took advantage of the early spring to
replenish forage stocks. However, the wet summer
that followed reduced sales activity in the second
half of the year since there was an abundance of
on-farm grass and silage available.
Our team of highly qualifi ed agronomists continue
to advise on best practice in terms of crop
management and environmental care, which
includes the use of digital nutrient management
programmes.
GrainLink performed well in challenging conditions.
The high-volume harvest of 2019 off ered increased
volumes for sale and the integration of the Grantham
offi ce helped to increase the volume of trade.
Our specialist Arable Event held near Shifnal,
Shropshire, in June 2019, continues to grow from
strength to strength. Over 1,000 farmers attended
and there were opportunities to hear presentations
from keynote industry speakers, and obtain advice
on innovative arable techniques, seed varieties, and
new mechanisation practices. The event ensures
that Wynnstay is recognised as a key supplier of
innovation and advice to the arable sector.
The management of the arable operations has been
restructured with all activities now under a single
director. Woodhead Seeds has also benefi tted from
the appointment of an arable manager to oversee
sales activities throughout the sector. Overall, the
arable business is well-placed to build upon its
strong position in the marketplace.
Feed processing sites in Powys
Feed processing sites in Powys
Feed processing sites in Powys
and Carmarthenshire, blending
and Carmarthenshire, blending
and Carmarthenshire, blending
plant in Gwynedd, arable and seed
plant in Gwynedd, arable and seed
plant in Gwynedd, arable and seed
processing sites
in Shropshire
processing sites
in Shropshire
processing sites
in Shropshire
and Yorkshire, raw materials and
and Yorkshire, raw materials and
and Yorkshire, raw materials and
feed processing site in Lancashire,
feed processing site in Lancashire,
feed processing site in Lancashire,
at
processing
fertiliser
at
processing
fertiliser
at
processing
fertiliser
Lancashire, Angus and Yorkshire.
Lancashire, Angus and Yorkshire.
Lancashire, Angus and Yorkshire.
sites
sites
sites
Montrose
Montrose
Glasson
Winmarleigh
Selby
Goole
Rhosfawr
Astley
Llansantff raid
Carmarthen
Feed processing sites
Fertiliser processing sites
Seed processing sites
Trading activity
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Chief Executive’s Review continued
SPECIALIST AGRICULTURAL MERCHANTING DIVISION
The Specialist Agricultural Merchanting Division trades predominantly
through a network of depots, which supply a wide range of products
specifi cally geared to the needs of farmers, although rural dwellers also
account for a proportion of sales. The off ering at our depots includes
animal health products, bagged feed and hardware. We also have
Suitably Qualifi ed Persons (“SQP”) who provide value-added advice
on animal health products as well as the other products that we sell.
This aspect of our operations make us an attractive route to market
for our supplier base.
Channels-to-market also include specialist catalogues, specifi cally
for the dairy, beef, sheep and poultry sectors, vans and online. Our
Youngs Animal Feeds business is accounted for in this Division.
Total revenues generated in the year amounted to £131.84m (2018:
£128.26m) and the Division’s operating profi t contribution was
£5.24m (2018: £5.53m). Total revenues benefi ted from fi rst full-year
contributions from acquisitions, principally the Countrywide depots,
acquired in April 2018, and MD Lloyd acquired in January 2018. There
was also a partial contribution from Stanton Farm Supplies, acquired
in April 2019. Contributions from acquisitions accounted for £8.1m of
incremental sales in the year. Like-for-like revenue was 3.5% lower
than the previous year, which was predominantly as a result of the
reduction in demand for bagged feed and feed-related products.
Specialist Agricultural Merchanting -
Revenue (note 2, page 58)
2019
2018
2017
£131,843k
£128,258k
£190,727k
Somerset-based
Stanton Farm
Supplies was
acquired in
April 2019
Wynnstay Depots
Following our acquisitions, we amalgamated two depots and closed
two small depots in our network of Specialist Agricultural Merchanting
depots. This has taken the network to 55 depots (2018: 59 depots),
which are located across the North West, Midlands, South West and
Wales. The Countrywide depot integration was also successfully
completed in the year.
Revenues were impacted by the signifi cant reduction in demand for
bagged feed and feed-related products, caused by weather conditions,
as well as lower demand for grass seed, fertiliser and agrochemical
sales during the wetter summer and autumn periods.
Up 3% as a result
of acquisitions
The continued development of our youngstock team helped to drive a
record performance for milk replacer products.
Specialist Agricultural Merchanting -
Segment Result (note 2, page 58)
2019
2018
2017
£4,740k
£5,244k
£5,536k
Down 5% as a
result of product
mix
During the year, like-for-like inventories at our depots reduced by
15.3%, benefi ting our working capital utilisation.
Sales via our alternative routes to market, including catalogues and
on-line activities continued to account for a relatively small percentage
of Divisional sales.
We will continue to train agricultural specialists to enhance the level
of advice-driven transactions from our customers and will seek
opportunities to extend our footprint into new geographical areas.
Youngs Animal Feeds
Youngs Animal Feeds manufactures and markets a range of equine
products that are sold throughout specialist outlets across Wales and
the Midlands and in some of our Specialist Agricultural Depots. Our
Molichop branded feed range, manufactured at our purpose-built
factory at Standon, remains a market-leading added-value product.
Gareth Davies
Chief Executive
21 January 2020
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SPECIALIST AGRICULTURAL MERCHANTING SITES
55 Wynnstay depots
Stanton Farm Supplies Limited
(van-based distribution point)
4 Youngs Animal Feeds
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Finance Review
Over 16 years of
dividend growth
GROUP STRUCTURE
TRADING RESULTS
The Group’s eff ective legal structure continues to
be a holding company, Wynnstay Group Plc, which
has investments in four wholly owned active trading
subsidiaries which are:
A summary of the trading conditions experienced by the business over the last fi nancial
year is provided in the Chief Executive’s Review on pages 15-19, which includes details
of the impact of the mild winter weather conditions and the Brexit related political
uncertainties which have adversely aff ected the fi nancial performance of the business.
• Wynnstay (Agricultural Supplies) Limited,
an agricultural merchant.
•
•
•
Glasson Grain Limited, a feed and fertiliser
merchant.
GrainLink Limited, a grain 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 18 in the accounts, and
certain other property and investment assets.
For reporting purposes the Group’s operations
are classifi ed into two main divisional segments,
Agriculture, encompassing the manufacturing and
supply of a comprehensive range of agricultural
inputs delivered to customers, and Specialist
Agricultural Merchanting, covering the supply of
products, primarily to farmers, 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.
Group revenue in the period increased to £490.60m (2018: £462.66m), with the majority
of the increase attributed to commodity infl ation which is estimated at some £23.5m
for the period. Contributions from acquisitions made both in the year, and during the
previous year where they have made a further incremental contribution as a result of
being included for the full period this year, added an additional £8.1m to revenue.
Profi t before tax
Share of tax incurred by joint ventures & associates
Share-based payments
Non-recurring items
Underlying pre-tax profi t
2019
£000
7,553
103
49
301
8,006
2018
£000
9,529
82
55
(69)
9,597
Our Agriculture division absorbed most of the infl ationary impact with a net £24.35m
increase in revenues, taking the total to £358.69m (2018: £334.34m). This net result
also refl ected falls in the volumes of manufactured feeds partly off set by an increased
tonnage of grain traded, all of which were at higher unit values. The Specialist Agricultural
Merchanting division included the growth from acquisitions, with a net increase of £3.58m
to a total revenue of £131.84m (2018: £128.26m). Like for like activities together with
some depot consolidation produced a small 3.5% revenue reduction.
Group adjusted1 operating profi t was £7.76m (2018: £9.43m), and profi t before taxation
on an IFRS basis was £7.55m (2018: £9.53m). On the Board’s preferred alternative
performance measure referred to as Underlying pre-tax profi t, which includes the gross
share of results from joint ventures and associates, but excludes share-based payments
and non-recurring items, the Group achieved £8.01m (2018: £9.60m). A reconciliation
with the reported income statement and this measure is shown above.
1Adjusted results are after adding back amortisation
of acquired intangible assets, share-based payment
expense and non-recurring items.
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The Board provides this alternative performance measure as it believes it provides a view of the underlying commercial performance of current
trading activities, providing investors and other users of the accounts with an improved view of likely future performance by making the following
adjustments to the IFRS 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 identifi cation 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.
Inclusive of contributions from joint ventures and associate businesses, our Agriculture division generated an operating profi t before non-recurring
items of £2.95m (2018: £4.29m), while our Specialist Merchanting Division produced £5.24m (2018: £5.53m). Other activities generated a small
loss of £0.05m (2018: £0.09m).
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(2018: £1.90m)
The Group’s tax charge, including joint ventures and
associates, of £1.52m
represents
19.9% (2018: 19.8%) of the Group pre-tax profi t of
£7.65m (2018: £9.61m). Deferred tax provisions have
continued to be calculated at the target rate of 17%
which was substantively enacted in 2016 and was due
to become eff ective from April 2020, although we note
recent Government proposals to cancel this reduction.
A reconciliation relating to the Group’s tax charge and
Group pre-tax profi t is given:
Total tax
Taxation
Share of tax incurred by associate and joint venture
Group pre-tax profi t from operations
Profi t before taxation from operations
Share of tax incurred by joint ventures and associates
2019
£000
1,421
103
1,524
7,553
103
7,656
2018
£000
1,821
82
1,903
9,529
82
9,611
In accordance with Schedule 19 of the Finance Act 2016, the Group has published a Tax Strategy document on its website, which confi rms that
the organisation is committed to full compliance with all statutory obligations and adopts a policy of full disclosure to HMRC. The Group refrains
from using off shore tax jurisdictions and will not use specifi cally constructed tax avoidance schemes or arrangements.
EARNINGS PER SHARE AND DIVIDEND
Basic earnings per share were 30.95p (2018: 39.11p), based on a weighted average number of shares in issue during the year of 19.812m
(2018: 19.708m). The Board proposes to recommend the payment of a fi nal dividend of 9.40p per share to be paid on the 30 April 2020, which
when added to the interim dividend of 4.60p per share paid on the 31 October 2019, makes a total of 14.00p for the year (2018: 13.36p),
an increase of 4.8%. The total dividend is expected to be covered 2.21 times (2018: 2.92 times) by earnings. The total dividend represents
the sixteenth consecutive year of payment growth since the business was fl oated on the Alternative Investment Market of the London Stock
Exchange in 2004. This current dividend cover remains within the range which can support the continuing progressive policy. Current Company
distributable reserves amount to £16.29m, (2018: £15.83m) and are adequate to cover over fi ve years of current dividend payment levels.
Adequate anticipated 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 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.
SHARE CAPITAL
During the year a total of 124,212 (2018: 106,418) new ordinary shares were issued for a total equivalent cash amount of £0.373m (2018:
£0.439m). No (2018: 18,816) shares were issued in relation to the exercise of employee share options during the year, while the 124,212 (2018:
87,602) shares were issued to existing shareholders exercising their right to receive dividends in the form of new shares, with an equivalent cash
value of £0.373m (2018: £0.372m).
BALANCE SHEET
Group net assets at the year end amounted to £94.95m (2018: £91.07m). Based on the weighted average number of shares in issue during the
year of 19.812m, (2018: 19.708m) this represented a net asset value per share of £4.79 (2018: £4.62). During the fi nancial year the share price
traded in a range between a high of £4.55 in February 2019 and a low of £2.70 in August 2019. Based on these balance sheet values, Return
on Net Assets from Underlying pre-tax profi ts was 8.5% (2018: 10.6%).
Capital investment in fi xed assets amounted to £4.92m (2018: £5.11m) in the year, with the upgrading of the bulk feed delivery fl eet having been
a priority. Additionally, the Group invested £0.53m in the year on the acquisition of Stantons Farm Supplies Limited on a gross provisional fair
value basis with £0.15m of this deferred. A further total of £0.60m of deferred payments on earlier acquisitions was also paid during the year.
Net Working Capital, which is defi ned as, the net of inventory, trade and other receivables and trade and other payables, showed an overall 10%
decrease as at the year end, standing at £43.81m (2018: £48.48m), which was primarily caused by seasonal diff erentials in trading patterns.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
21
21
Finance Review continued
CASHFLOW, NET CASH/(DEBT) AND BANKING FACILITIES
The business’s trading activity remains strongly
cash generative, with this being measured by
reference to a key performance indicator called
EBITDA. Essentially, this measures operating
profi t in broad cash generative terms, and a
reconciliation of this measure to reported IFRS
profi t before tax is provided:
IFRS reported pre-tax profi t from operations
Tax on joint venture and associate income
Profi t on disposal of fi xed assets
Profi t on disposal of Associate
Interest
Depreciation
Amortisation and share-based payments
Non-cash non-recurring costs
EBITDA
2019
£000
7,553
103
(170)
(84)
184
3,579
77
-
11,242
2018
£000
9,529
82
(328)
-
191
3,157
71
138
12,840
EBITDA before non-recurring items
Loans (made to)/repaid by joint ventures
Adjustment for pre-tax joint ventures and associates
Working capital movements – balance sheet
Working capital movements – re-analysed
Cash generated from operations – as reported
Working capital movements – re-analysed
Net interest
Tax paid
Capital expenditure
Capital disposal proceeds
Acquisitions
Other acquired assets/(liabilities)
Other proceeds
Dividends
Issue of new equity
Net increase /(decrease) in cash
Opening net (debt)/cash
Closing net cash/(debt)
2019
£000
11,242
(1,601)
(463)
4,667
911
14,756
(911)
(184)
(1,680)
(4,915)
288
(527)
168
135
(2,683)
374
4,821
(977)
3,844
2018
£000
12,840
32
(376)
(8,221)
(1,444)
2,831
1,444
(191)
(1,674)
(5,112)
548
(1,760)
(262)
778
(2,524)
439
(5,483)
4,506
(977)
A reconciliation of EDITDA, as shown, to the net cash
position at the year-end is provided in the table below,
which is shown for additional information only and is
prepared under the indirect method of item allocation,
which is not is accordance with IAS 7:
During the year a substantial element of this generated
cash has been invested in fi xed assets and acquisitions
to broaden the base of the business, and with lower
working capital requirements at the year-end, the
Group was able to report signifi cant cash balances.
The year-end does represent a low point in the Group’s cash utilisation cycle, and the Board continues to prioritise the maintenance of adequate
debt facilities to accommodate the usual spring peak of this seasonal fl uctuation, together with any unexpected commodity price volatility.
At the year-end, the Group had a combination of committed and short-term bank facilities of £20.3m in place (2018: £18.8m), together with asset
fi nance lines of £8.7m, which are expected to satisfy forecast peak requirements for 2020. The committed Revolving Credit Facility element in this
total is £7.5m which expires in June 2020, with discussions already underway to renew this with HSBC Bank, which are expected to conclude
well before the expiry date. The Board will continue to keep the overall facility requirement position under review, taking a balanced approach
between assessing the costs of committed debt against short-term working capital requirements.
22
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
KEY PERFORMANCE INDICATORS
The performance of the business is regularly monitored against fi nancial key performance indicators (KPI’s), defi ned as follows:
Revenue:
EBITDA:
The invoiced value of sales from the Group’s
activities, measured at a fair value net of all
rebates and excluding value added tax.
£490.60m (2018: £462.66m).
Underlying
pre-tax profi t:
Underlying pre-tax profi t includes the Group’s
share of pre-tax profi t from joint ventures and
associate investments but excludes non-
recurring costs and share-based payment
expense. £8.01m (2018: £9.60m).
Earnings before interest, tax, depreciation and
amortisation, and excluding non-recurring
costs, and share-based payment expense.
£11.24m (2018: £12.84m).
Adjusted
operating profi t:
Adjusted operating profi t includes adding
back amortisation of acquired
intangible
assets, share-based payment expense and
non-recurring items. £7.76m (2018: £9.43m)
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Earnings per share:
Profi t 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. 30.95p (2018: 39.11p).
Return on
net assets:
Net assets
per share:
Underlying pre-tax profi t, with
intangible
amortisation added back, divided by the
balance sheet net asset value. 8.5% (2018:
10.6%).
The balance sheet net asset value, divided
by the weighted average number of shares
in issue during the year. £4.79 (2018: £4.62).
Whilst disappointed with the lower profi t performance after last year’s record results, the Board believes that under the diffi cult prevailing trading
conditions through the year, which were announced in a trading update on 21 March 2019, the business has performed to revised expectations.
Paul Roberts
Finance Director
21 January 2020
Company Details
COMPANY NUMBER
02704051
REGISTERED OFFICE
Eagle House
Llansantff raid Ym Mechain
Powys
SY22 6AQ
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
23
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Innovation and Sustainability
Innovation and sustainability can help maximise returns in farming enterprises.
Information generated by precision farming technology can be used to drive eff ective
decision making and optimise returns on inputs, whilst preserving resources.
Wynnstay have introduced the
revolutionary CracklessEgg™
technology to help our bulk
poultry feed customers save
hundreds, or even thousands of
pounds in wasted cracked eggs
It is vital to optimise a calf’s
growth and development
in the fi rst few months of
life, with innovative milk
replacement products
Recent years have seen a
surge in the adoption of
precision farming techniques,
particularly in the arable sector.
As dairy enterprises continue
to increase in size, precision
technologies are becoming
more widely adopted.
24
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
We use AMTS software to formulate
dairy rations using the Cornell Net
Carbohydrate and Protein System which
results in improved effi ciency, allowing
for formulation with lower crude protein,
resulting in; increased production,
improving cow health and, in turn, less
nitrogen excretion, which reduces the
impact on the environment
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A phosphate enhancer that creates a sphere of
availability for phosphate in the soil by preventing
fi xation with cations. It leaves the phosphate
free to be taken up by the plant, unlocking the
phosphate and making it 30% more available
Sustainable Farming Services -
Manure management plans ensure
nitrate vulnerable zones are protected,
controlling nitrogen fertiliser and
organic manure application and
onfarm storage capabilities
Wynnstay use and have full access to High Sugar Grasses (HSG).
Aber HSG grass mixtures are helping to lower losses of N2O into
the atmosphere. These improve the effi ciency with which cattle
utilise protein and reduce the excretion of nitrogen in urine,
which in turn result in lower losses of nitrate to ground water.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
25
25
Principal Risks and Uncertainties
For the year ended 31 October 2019
The Group aims to mitigate the risks it faces as we seek to create sustainable growth over the medium to long-term by adopting an approach
that is appropriate to the business activities being conducted. The Board retain overall responsibility for reviewing risk management strategies
and this statement provides information about the extent of exposure to identifi ed risks that the Board is able to bear and willing to take. The
executive directors work closely with the non-executive directors who provide oversight and scrutiny in this area to ensure that risk management
is appropriately aligned with commercial strategy.
As a Board, we play a critical role in helping to shape the tone for the organisation. This is achieved by modelling behaviours which drive strategic
thinking, pace, risk management and compliance. Stakeholder feedback is sought from a variety of sources which is considered and acted upon
as appropriate in order to ensure the Group is functioning in line with our corporate goals.
As with all businesses, there are some risks and uncertainties which are not able to be controlled.
The table below sets out the principal risks and uncertainties which could have a material impact on the Group, the list is not exhaustive, and
it is possible that there will be other risks or uncertainties that could have a material adverse impact. Whilst all companies are subject to some
fi nancial risk, the Group continues to have a strong balance sheet and low gearing.
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
Increasing
Operational: Brexit and the political backdrop
There is uncertainty about the terms of the trade agreement
which the UK will be able to negotiate with the European
Union which may impact the Group in the following ways:
We continue to closely monitor the government’s Brexit
arrangements and adapt our plans to respond to the latest
arrangements.
- Imports of raw materials
Potential disruption of imports of raw materials due to
congestion and customs procedures at point of entry which
could lead to disruption of manufacturing and merchanting
operations.
Our raw material inputs and goods for resale are sourced
from worldwide locations and where possible we plan to
purchase from a variety of sources in order to minimise
reliance on a single point of supply.
- Customer exports
Some of our customers export their end product, so the
imposition of tariff s may impact demand for their products,
which in turn could aff ect their demand for the Group’s
products.
- Exchange rate volatility
Leading to commodity price risk.
- Historic reliance of our customers on government support
Our core farmer base has historically relied upon government
support and whilst the UK Agriculture Bill 2019 guarantees
support until 2022 it is unclear what will happen after this
time. This may lead to uncertainty and impact our customer
buying patterns.
The Group’s customers are located in Britain and are
involved in enterprises meeting the country’s basic need
for food. The Group diversifi es where possible to avoid
reliance on individual customer or product groups, such as
off ering products to arable and livestock farmers.
Detailed mitigating actions for commodity price risk are in
the subsequent “fi nancial: commodity prices and currency
exchange rates” section.
26
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
No change
Operational: Infrastructure and IT systems
Much of the Group’s feed business is conducted on a
customer ‘made to order’ basis. This requires sophisticated
order processing, manufacturing and delivery systems as low
lead time can provide a competitive advantage.
The Group has internal IT support teams to manage its
computer systems, including procedures for recovery from
disruption.
The breakdown of any of these systems through mechanical
fault, weather and traffi c disruption, or computer malfunctions
or errors could lead to failure to fulfi l customer orders.
The Group operates multiple supply points, with additional
third-party manufacturing arrangements in place.
It is recognised that all organisations could be subject to
cyber attacks and data theft and we have policies around
data protection and use of IT systems which seek to
minimise the risk of breaches.
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No change
Operational: Recruitment, retention and development of our key people
Recruiting and retaining the right people is crucial to the
success of the Group.
Succession planning and development of key colleagues is
considered at Board level.
The Remuneration Committee develops remuneration
policy for executives and key colleagues, referring to
external benchmarking data as appropriate.
No change
Operational: Supply chain effi ciency
The Group requires access to raw materials and goods for
resale and any disruption to its supply chains would damage
revenue streams.
Strategic partnerships with suppliers are managed by
specialist colleagues who aim to ensure inventories are
kept at an optimum level.
No change
Financial: Commodity prices and currency exchange rates
The Group’s raw material inputs (grain, feed inputs), along
with the farmer customer outputs (dairy, meat, agricultural
goods) are subject to world prices which are impacted by
world supply and demand, political factors and currency
exchange rates which could lead to fl uctuating demand for
the Group’s products.
No change
Financial: Availability of fi nance and interest rates
Fluctuating commodity prices can adversely impact the
Group’s working capital requirements and it is possible that
interest rates charged may increase.
The Group does not engage in the taking of speculative
commodity positions, but it does have to make signifi cant
forward purchases of certain raw materials, particularly
for use in its animal feed and fertiliser manufacturing
operations. Position reporting systems are in place,
together with appropriate limits, to ensure the Board is
appraised of the exposure level on a regular basis. Where
available, hedging tools such as commodity futures
contracts on the London LIFFE market are used to manage
pricing decisions.
is managed by entering
Foreign currency risk
into
currency purchase agreements at the time the underlying
transaction for the purchase of raw materials is completed.
The adjusted fair value of these contracts is now material.
At the year end the principal amounts relating to forward
purchased currency amounted to £9,178k (2018: £11,489k).
The Group monitors and maintains headroom in its
facilities to accommodate unexpected but foreseeable
trading patterns and conditions. Debt facilities are in place
with HSBC Bank Plc which includes variable overdraft and
revolving credit facilities and term loans.
The majority of debt is fl oating and linked to interest base
rates. The Board reviews its option to fi x the rates attached
to debt through the use of interest swap derivatives.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
27
27
Principal Risks and Uncertainties continued
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
Increasing
Operational: Operating climate
- Impact of weather conditions and climate change
Demand for the Group’s products is impacted by climatic
conditions as these impact demand for animal feed and
associated products and arable activities and so customer
demand can be impacted by the weather which, in turn,
could lead to volatility of earnings.
- Consumer awareness
There is growing evidence of consumer awareness and
concern about sustainability of products purchased,
including food.
- Government regulation and licences
A number of the operating sites within the Group require
specifi c Environmental Agency regulated permits or other
governmental approvals or
Non-compliance
with terms could result in the withdrawal to operate certain
activities which could lead to volatility of earnings or loss of
reputation.
licences.
No change
Financial: Credit
The Group monitors trends and, as noted above, seeks
to diversify where possible to avoid reliance on individual
customer or product groups, such as off ering products to
arable and livestock farmers.
The Board monitors developments in consumer buying
patterns in relation to sustainability and looks to ensure that
the Group off ers a range of products to meet consumer
preferences, and looks for new opportunities to service
emerging trends in agriculture, such as the public goods
concept in the UK Agriculture Bill 2019.
The Board oversees Environment and Regulatory
Compliance by receiving regular updates from management
and monitoring the results of audits.
A signifi cant proportion of the Group’s trade is conducted on
credit terms and as such the risk of non payment is always
present.
Customers are credit checked and appropriate limits set up
prior to goods being supplied. The Group actively monitors
accounts using the credit control policy and the Board
regularly monitors debtor days. The historic incidence of
bad debts is low.
- Grain trading business
The grain trading business derives a signifi cant proportion of
revenue from a small number of key customers, leading to
substantial customer credit balances.
The Group utilises credit insurance in order to provide
partial cover against default by certain customers.
No change
Operational: Industry consolidation and change
The Group operates in a fragmented market which is
undergoing consolidation. Our strategy is to grow through a
combination of organic and acquisition-based means in order
to remain competitive and benefi t from economies of scale.
Consequently, it is important to successfully identify, execute
and integrate growth opportunities in order to mitigate the
risk of customer loss and competition.
The Group pursues a sensible growth strategy by seeking
to increase its market share through geographic expansion
and acquisitions.
The Group continues to invest its sales channels, capturing
data through a customer relationship management tool
in order to identify and manage customer sales, service,
support and quality across our catalogue direct to farm and
specialist agricultural merchanting depot networks.
28
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Focus on Glasson
Cornmill
Situated on the banks of the River Lune
and adjacent to our dock facilities our
Cornmill produces a wide range of
animal feeds for the farm animal, equine,
poultry and wild bird food markets.
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Glasson Dock
Working
the quayside of an
from
international port Glasson Grain Limited
operates in three main areas - the supply
of feed raw materials, production of fertiliser
and the manufacture of specialist added
value animal feed products.
range
Raw material trading
the supply of a
We specialise
in
Feed
of
comprehensive
Raw Materials and Wheatfeed
to
Compounders, Feed Blenders and
Merchant businesses throughout the UK,
on either a delivered or ex store basis.
The materials supplied include maize,
cereals, and proteins.
Fertiliser Manufacturing
Glasson Grain Limited are the second largest
blender of fertiliser in the UK, operating from
sites at Montrose, Goole, Winmarleigh and
Birkenhead.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
29
29
Board of Directors and Company Secretary
RC
NC
AC
RC
NC
James John McCarthy
Chairman
Jim joined the Board in July 2011 and was appointed Chairman
of the Group in November 2013. He has over 40 years’
experience in fast-moving retail industry, having served as CEO
of Poundland Group plc, MD of Convenience at J Sainsbury
plc, and 10 years as CEO of T&S Store plc. Jim is also Non-
Executive Chairman at UP Global Sourcing Holdings plc.
Philip Michael Kirkham
Vice-Chairman / Senior Independent Non-
Executive Director
Philip joined the Board in April 2013. He runs a mixed farming
business in the West Midlands and has signifi cant experience
in the UK livestock sector. He is also Non-Executive Chairman
of Meadow Quality Limited, a multi-species livestock marketing
business.
KEY SKILLS
KEY SKILLS
Sector experience
Strategy and leadership
Sector experience
Strategy and leadership
Property
AC
RC
AC
Howell John Richards
Independent Non-Executive Director
Stephen Ellwood
Independent Non-Executive Director
Howell joined the Board in July 2014. He has signifi cant
experience within the agricultural industry and has established
a large dairy enterprise business 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.
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 Smith & Williamson for
four years. Steve is also a Non-Executive Director at NIAB, AH
Worth and Company and Velcourt Group.
KEY SKILLS
KEY SKILLS
Sector experience
Strategy and leadership
Sector experience
Mergers and acquisitions
£
Finance
Strategy and leadership
30
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COMMITTEE MEMBERSHIP
AC Audit Committee
NC Nominations Committee
RC Remuneration Committee
Committee chair
NC
Gareth Wynn Davies
Chief Executive Offi cer
David Andrew Thomas Evans
Agriculture Director
Gareth was appointed to the Board as Chief Executive in May
2018. He joined Wynnstay in 1999 as Sales Manager for South
Wales and became Head of Agriculture in 2008. He is also a
Non-Executive Director at Hybu Cig Cymru - Meat Promotion
Wales.
for
joined
the Board
in 2008 and has executive
Andrew
(Agricultural
responsibility
Supplies) Limited. Andrew
in 1996 as
Marketing Manager and became Retail Manager in 2003. He
also owns a dairy farm in Mid Wales.
the activities of Wynnstay
joined Wynnstay
KEY SKILLS
KEY SKILLS
Sector experience
Mergers and acquisitions
Sector experience
Strategy and leadership
Strategy and leadership
Sales and marketing
Operations
Sales and marketing
Bryan Paul Roberts
Finance Director
Claire Alexander Williams
Company Secretary
Paul joined the Board in 1997. He joined Wynnstay in 1987
having previously worked in the animal feed industry. He is a
Fellow of the Chartered Institute of Management Accountants.
Claire was appointed to the Board in January 2020. She joined
Wynnstay in 2017 as Group Financial Controller. She is a
member of the Institute of Chartered Accountants in England
and Wales.
KEY SKILLS
KEY SKILLS
Company secretarial
Sector experience
Company secretarial
£
Finance
£
Finance
Mergers and acquisitions
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
31
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Senior Management
David Chadwick
Managing Director, Glasson Grain
Dave joined the Group in August 2006 when Wynnstay acquired
Glasson Grain. Dave has signifi cant commercial experience in
international trading of animal feeds and fertiliser.
Stuart Dolphin
Arable Director
Joined the Group in May 2011 when Wynnstay acquired
Wrekin Grain which subsequently became GrainLink. Stuart has
signifi cant commercial experience in commodity trading and
arable farming, including seed, fertiliser and agronomy.
KEY SKILLS
KEY SKILLS
Strategy and leadership
Strategy and leadership
Sales and marketing
Sales and marketing
Operations and supply chain
Operations and supply chain
Samantha Jayne Roberts
Group Personnel Manager
Samantha joined the Group in July 2000 and held a variety of
roles before assuming Group Personnel Manager in July 2005.
KEY SKILLS
Human Resource Management and Development
Health and safety
32
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Depot network - 55 depots
offer a range of products
to farmers, rural dwellers
and small-holders
FENCING
RECYCLED PRODUCTS
CALF 35
ANIMAL HEALTH
PET FOOD
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
BAGGED FEED
33
33
Directors’ Report
For the year ended 31 October 2019
The Directors present their report together with the audited fi nancial statements of the Parent Company (“the Company”) and the Group for the
year ended 31 October 2019.
RESULTS AND DIVIDENDS
Interim dividend per share paid
Final dividend per share proposed
Total dividend
Group revenue
Group profi t after tax
DIRECTORS AND THEIR INTERESTS
2019
4.60p
9.40p
14.00p
2019
£000
490,602
6,132
2018
4.41p
8.95p
13.36p
2018
£000
462,657
7,708
Subject to approval at the Annual General Meeting, the fi nal dividend
will be paid on 30 April 2020 to shareholders on the register at the
close of business on 27 March 2020. The share price will be marked
ex dividend with eff ect 26 March 2020. In accordance with the rules
of the Company’s script 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 2020.
The Directors who held offi ce during the year and as at 31 October 2019 had the following interests in the ordinary shares of the Company:
Gareth Davies
Steve Ellwood
Andrew Evans
Philip Kirkham
Jim McCarthy
Howell Richards
Paul Roberts
25p Ordinary Shares
SAYE Options
Discretionary Options
2019
21,091
4,700
22,130
1,077
34,700
2,810
98,498
2018
8,992
-
21,165
1,030
5,000
-
98,498
2019
7,986
-
-
-
-
-
2018
7,986
-
3,243
-
-
-
2019
8,000
2018
8,000
-
-
-
-
-
-
-
-
-
-
3,121
4,306
8,000
8,000
Further information on the Directors’ discretionary options can be found in the Directors’ Renumeration Report.
In addition to the above shareholdings, Gareth Davies and Paul Roberts are trustees of the Company’s Employee Share Ownership Plan trust
which at the year end held 16,834 shares (2018: 6,834 shares). Accordingly, these directors were deemed to hold an additional non-benefi cial
holding in such shares.
No director at the year end held any interest in any subsidiary or associate company.
Further details on related party transactions with Directors are provided in note 35 to the fi nancial statements.
Under Article 91, Steve Ellwood and Paul Roberts retire from the Board by rotation at the Annual General Meeting on 24 March 2020 and being
eligible, off er themselves for re-election.
During the year, the Company purchased and maintained liability insurance for its Directors and Offi cers which remained in force at the date of
this report.
SHARES AND SUBSTANTIAL SHAREHOLDINGS
At 31 October 2019, the following shareholders held 3% or more of the issued share capital of the Company:
Registered Shareholder
Benefi cial Holder
Number of
shares
% of issued
share capital
Ferlim Nominees Limited
Discretionary managed funds of Investec Wealth & Investment Limited
1,904,694
Lion Nominees Limited
Discretionary managed funds of Close Asset Management Limited
1,468,947
Luna Nominees Limited
Discretionary managed funds of Brown Shipley Private Bank
1,359,514
Goldman Sachs Securities Limited
Polar Capital Partners
Rulegale Nominees Limited
Discretionary managed funds of James Sharp & Co
643,500
592,921
9.6
7.4
6.8
3.2
3.0
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.
Details of authorised and issued share capital and the movement in the year is detailed in note 26 to the fi nancial statements.
34
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
At the 2019 Annual General Meeting the Directors received authority from the shareholders to:
• Allot shares
This gives Directors the authority to allot shares and maintains fl exibility in respect of the Company’s fi nancing arrangements. The nominal value
of ordinary shares which the Director may allot in the period up to the next Annual General Meeting to be held on 24 March 2020 is limited to
£450,000. The Directors do not have any present intention of exercising this authority other than in connection with the issue of ordinary shares
in respect of the Company’s share option plans. This authority will expire on 24 March 2020 at the Annual General Meeting.
• Disapplication of rights of pre-emption
This disapplies rights of pre-emption on the allotment of shares by the Company and the sale of treasury shares. This authority allows the
Directors to allot equity securities for cash pursuant to the authority to allot shares mentioned above, and to sell treasury shares for cash without
a pre-emptive off er to existing shareholders, up to an aggregate amount of £450,000. This authority will expire on 24 March 2020 at the Annual
General Meeting.
• To buy own shares
This authority allows the Company to buy its own shares in the market, as permitted under the Articles of Association of the Company, up to a
limit of 500,000 ordinary shares. The Directors have no immediate plans to exercise the powers of the Company to purchase its own shares and
would only plan to do so if they were satisfi ed that a purchase would result in an increase in expected earnings per share and was in the best
interests of the Company at the time. This authority will expire on 24 March 2020 at the Annual General Meeting.
COLLEAGUES
The Group has procedures for keeping its colleagues informed about
the progress of the business. For further information please refer to our
Corporate Social Responsibility report on page 39.
The Group continues to encourage employee motivation by operating
a Savings Related Share Option Scheme open to all colleagues.
The Group provides training and support for all colleagues where
appropriate and gives a full and fair consideration to disabled applicants
in respect of duties which may be eff ectively performed by a disabled
person. Where existing colleagues 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.
DIRECTORS’ STATEMENT AS TO DISCLOSURE OF
INFORMATION TO AUDITORS
The Directors who were members of the Board at the time of approving
the Directors’ Report are listed on pages 30 to 31.
Having made enquires of fellow Directors each of these Directors, at
the date of this report, confi rms 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 confi rmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
PAYMENT OF SUPPLIERS
INDEPENDENT AUDITORS
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 fi gure and a 365 day year is 56 days (2018: 56
days).
LAND AND BUILDINGS
BDO LLP have indicated their willingness to continue in offi ce and
accordingly a resolution proposing their reappointment will be
submitted to the Annual General Meeting.
INFORMATION CONTAINED WITHIN OTHER PARTS OF
THE ANNUAL REPORT AND ACCOUNTS
Further information on the activities of the business, Group strategy,
likely future developments and principal risks and uncertainties are
contained in the Strategic Report.
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 2019 as provided in note 17 to the fi nancial statements by
approximately £6,200,000 (2018: £4,200,00).
By order of the Board
POLITICAL AND CHARITABLE DONATIONS
Details of support to the community is within the Corporate Social
Responsibility report on page 39. There were no political donations
during the year (2018: none).
Claire Williams
Company Secretary
21 January 2020
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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35
Responsibility Statement Of The Directors 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 fi nancial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent
Company fi nancial statements for each fi nancial year. Under that law
they have elected to prepare both the Group and the Parent Company
fi nancial 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 fi nancial statements
in accordance with IFRSs as adopted by the EU and applicable law
and have elected to prepare the Parent Company fi nancial statements
on the same basis.
The Directors are responsible for keeping adequate accounting
records that are suffi cient to show and explain the Parent Company’s
transactions and disclose with reasonable accuracy at any time the
fi nancial position of the Parent Company and enable them to ensure
that the fi nancial 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
Under Company law the Directors must not approve the fi nancial
statements unless they are satisfi ed that they give a true and fair view
of the state of aff airs of the Group and Parent Company and of their
profi t or loss for that period. In preparing each of the Group and Parent
Company fi nancial statements, the Directors are required to:
The Directors are responsible for the maintenance and integrity of
the corporate and fi nancial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation
and dissemination of fi nancial statements may diff er from legislation in
other jurisdictions.
•
select suitable accounting policies and then apply them
consistently;
By order of the Board
• make judgements and estimates that are reasonable and
prudent;
•
•
state whether they have been prepared in accordance with
IFRSs as adopted by the EU; and
prepare the fi nancial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Parent Company will continue in business.
Claire Williams
Company Secretary
21 January 2020
Advisors
AUDITOR
BDO LLP
3 Hardman Street
Manchester
M3 3AT
NOMINATED ADVISOR
Shore Capital and Corporate Limited
Cassini House
57 St James’s Street London
SW1A 1LD
SOLICITORS
Harrisons Solicitors LLP
11 Berriew Street
Welshpool
Powys, SY21 7SL
DWF LLP
5 St Paul’s Square
Liverpool, L3 9AE
PRINCIPAL BANKERS
HSBC Plc
Wales Corporate Banking Centre
15 Lammas Street
Carmarthen
SA31 3AQ
NOMINATED STOCKBROKER
Shore Capital Stockbrokers Ltd
Cassini House
57 St James’s Street London
SW1A 1LD
REGISTRARS
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
36
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Corporate Governance Statement
For the year ended 31 October 2019
Dear shareholder
On behalf of the Board, I am pleased to present our Corporate
Governance Statement for the year ending 31 October 2019.
As a Board we are committed to high standards of corporate
governance in order to deliver long-term shareholder value. I am
pleased to report that the Group remained in compliance with the
QCA Corporate Governance Code for Small and Mid-size Quoted
Companies published in April 2018 (“the Code”) throughout the year.
This report describes how the principals of the Code were complied
with.
Further details relating to going concern and long-term viability can be
found in the Group Strategy on pages 8 to 9.
1. ESTABLISH A STRATEGY AND BUSINESS
MODEL WHICH PROMOTE LONG-TERM VALUE FOR
SHAREHOLDERS
Wynnstay is committed to sustainable development within the
agriculture sector. The Group’s business model, strategy and principal
risks and uncertainties are set out in the Strategic Report.
2. SEEK TO UNDERSTAND AND MEET SHAREHOLDER
NEEDS AND EXPECTATIONS
The Board appreciates that the diverse shareholder base of the Group
may have diff ering objectives for their investment in the business, and
therefore the importance of ensuring that non-executive directors
(“NED”) in particular, have an up to date understanding of these
perspectives is well recognised.
Directors will therefore routinely engage with both institutional and
private investors and will seek out opinions on unusual or potentially
controversial matters before adopting policy changes or tabling
shareholder resolutions. The Board will always review written feedback
reports from investors following fi nancial results “roadshows” and
will also always consider information received from institutional voter
advisory fi rms. Philip Kirkham is the nominated independent NED who
makes himself available to shareholders who may require independent
Board contact.
We published a Whistleblowing
We published a Whistleblowing
policy which sets out a procedure for
policy which sets out a procedure for
policy which sets out a procedure for
all colleagues to report any concerns
all colleagues to report any concerns
all colleagues to report any concerns
of malpractice in April 2019.
of malpractice in April 2019.
of malpractice in April 2019.
3. TAKE INTO ACCOUNT WIDER STAKEHOLDER AND
3. TAKE INTO ACCOUNT WIDER STAKEHOLDER AND
SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS
FOR LONG-TERM SUCCESS
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.
The Board monitors developments in sustainable farming practices
and where possible looks to incorporate these into the Group’s product
off ering. Examples of these include sustainably sourced protein in
animal feed and supporting our customers to maximise production
effi ciency through precision farming techniques.
Employee feedback is obtained in a number of ways, including senior
management roadshows and team meetings. See our Corporate
Social Responsibility statement on page 39.
Customer feedback is sought via both sales colleagues and senior
management and sales related metrics and reviewed through our
CRM system.
Supplier feedback is obtained via both purchasing colleagues and
senior management.
EMBED
EFFECTIVE
4.
RISK MANAGEMENT,
CONSIDERING BOTH OPPORTUNITIES AND THREATS,
THROUGHOUT THE ORGANISATION
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Principal risks and uncertainties, along with our mitigating actions,
are described in the Strategic Report. The Board retains ultimate
responsibility for determining our risk appetite and overseeing
management strategies.
The Group does not currently have a formal internal audit function and
at present the Board believes that existing management resource is
suffi cient to adequately control the Group in its current size, however
this matter continues to be actively reviewed.
The key procedures within the control structure include:
• Managers at all levels in the Group have clear lines of reporting
responsibility within a clearly defi ned organisational structure;
•
Comprehensive fi nancial reporting procedures exist, with
budgets covering profi ts, cash fl ows 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 with clearly defi ned authorisation levels.
5. MAINTAIN THE BOARD AS A WELL-FUNCTIONING,
BALANCED TEAM LED BY THE CHAIR
Details of membership of the Board, along with biographies are
included on pages 30 to 31.
The Board is comprised of three executive directors, four independent
non-executive directors and a company secretary which provides an
appropriate balance.
The roles of Chairman and Chief Executive are separated. The
Chairman is responsible for the Board, he is a non-executive and is
elected by the whole Board on an annual basis. Jim McCarthy was
elected Chairman in November 2013 and has been re-elected each
year to date.
The Senior Independent director supports the other directors by acting
as a confi dential “sounding board” and also leads engagement with
shareholders who may require independent Board contact.
The Chief Executive is responsible for the operating performance of
the Group.
The Company Secretary acts as a trusted adviser to the Chair and
the Board with specifi c duties in relation to both legal and regulatory
compliance and reports directly to the Chair on governance matters.
All members are able to take independent professional advice on
matters associated with the Company at the Company’s expense.
A formal schedule of matters requiring Board approval is maintained
and regularly reviewed and covers items such as Group strategy,
approval of budgets and fi nancial results, dividend policy, major capital
expenditure, corporate governance and Board appointments and
comprehensive briefi ng papers are circulated prior to each meeting.
The Board usually meets once per month with additional meetings
when necessary. The Board met each month during the year and all
members attended each meeting.
We confi rm that all the non-executive directors are considered to be
suitably independant.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
37
Corporate Governance Statement continued
6. ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE
THE NECESSARY UP-TO-DATE EXPERIENCE, SKILLS
AND CAPABILITIES
9. MAINTAIN GOVERNANCE STRUCTURES AND
PROCESSES THAT ARE FIT FOR PURPOSE AND SUPPORT
GOOD DECISION-MAKING BY THE BOARD
Biographical details of the Directors and their skills are included
on pages 30 to 31. The executive directors all have considerable
experience in the agricultural supply industry and have spent much
of their careers with the Group, providing a signifi cant degree of
management continuity. The non-executives bring a range of business
and commercial expertise to the Board, including direct agriculture and
specialist merchanting experience. Steve Ellwood is Audit Committee
Chair and has recent and relevant fi nancial oversight experience roles
at HSBC and Smith & Williamson.
The Board is satisfi ed that it has an appropriate balance of sector,
fi nancial and public markets skills and experience and is not dominated
by any one person or group of people.
We further strengthened our Corporate
We further strengthened our Corporate
We further strengthened our Corporate
function by appointing
Governance
function by appointing
Governance
function by appointing
Governance
Claire Williams as Company Secretary in
Claire Williams as Company Secretary in
Claire Williams as Company Secretary in
January 2020 hence separating this role
January 2020 hence separating this role
from that of an executive. On Governance
from that of an executive. On Governance
matters, she reports directly to me as
matters, she reports directly to me as
Chairman of the Board.
7. EVALUATING BOARD PERFORMANCE BASED
ON CLEAR AND RELEVANT OBJECTIVES, SEEKING
CONTINUOUS IMPROVEMENT
The Chairman is responsible for the periodic performance reviews
of the Board, its sub-committees and non-executive directors.
Stakeholder feedback is sought and acted upon.
The results of a Board eff ectiveness evaluation were considered in
November 2018.
Executive training has been undertaken during the year to enhance
leadership and communication skills.
8. PROMOTE A CORPORATE CULTURE THAT IS BASED
ON ETHICAL VALUES AND BEHAVIOURS
The Board operates a policy of collective responsibility with regard
to its decision making, with the Chairman being responsible for the
smooth functioning of its activities. The Chairman will ensure that each
member of the Board is given fair and equal opportunity to clearly
express their respective views on all matters, and that the executive
directors are adequately able to communicate reasonable commercial
views on matters under debate.
The Board is satisfi ed that BDO LLP has adequate policies and
safeguards in place to ensure that external auditor objectivity and
independence is maintained.
The Board is supported by Shore Capital and Corporate Limited who
are consulted on matters when appropriate.
The Board is supported by three sub-committees, membership of
which is shown on pages 30 to 31.
•
Audit
The committee meets to provide oversight of the fi nancial reporting
process, the external audit process including maintaining auditor
objectivity and independence in relation to non-audit services, the
Group’s system of internal controls, compliance with laws and
regulations and risk management. The Committee met twice during
the year and all members attended.
•
Remuneration
The committee meets to consider remuneration policy for executive
directors and senior managers and the supervision of employee benefi t
structures throughout the Group. The Committee met twice during the
year and all members attended.
•
Nominations
Meets as required to consider senior appointments. There were no
meetings during the year.
The Board is satisfi ed that the Group’s governance structures and
processes are appropriate to its size, complexity and appetite and
tolerance to risk and keeps these structures under review as the Group
develops over time. The Board regularly monitors developments to
Corporate Governance regulations and processes and will regularly
review the continuing suitability of the QCA code.
10. COMMUNICATE HOW THE COMPANY IS GOVERNED
AND IS PERFORMING BY MAINTAINING A DIALOGUE
WITH SHAREHOLDERS AND OTHER RELEVANT
STAKEHOLDERS
A Directors remuneration report is contained on pages 40 to 45.
During the year the Audit Committee considered the matters described
under Principal 9 and also the implementation of IFRS 9 ‘Financial
Instruments’, IFRS 15 ‘Revenue from Contracts with Customers’, the
use of the going concern assumption in the preparation of the fi nancial
statements and the results of the annual goodwill impairment review.
Arrangements for maintaining a dialogue with shareholders and other
relevant stakeholders are described under Principals 2 and 3.
Members of the Board are available at the Annual General Meeting
which is a well attended occasion and includes a presentation on the
fi nancial results of the Group. Close relationships are maintained with
Shore Capital and Corporate Limited who are our nominated Advisor
and Stockbroker who are able to facilitate further opportunities for
stakeholder engagement.
Jim McCarthy
Chairman
21 January 2020
38
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Corporate Social Responsibility
Colleagues
The relationship nature of much of the Group’s trading activities makes
it heavily dependent on the quality and effi ciency of the colleagues
involved in the business. People management and development is
therefore critical to our success. Considerable eff ort and investment is
put into the recruitment, training, welfare and support of all colleagues,
and examples of technical training that enables our colleagues to
provide advice to our customers are shown on page 6. In addition a
number of our colleagues are training for professional qualifi cations in
HR Management and Accountancy.
Colleagues are kept informed about key developments and the fi nancial
performance of the business. Board meetings and management
meetings are held in diff erent locations to facilitate engagement
with the executive and non-executive directors. The purpose of the
group is to contribute to balanced decision making and stakeholder
engagement. In addition all eligible colleagues are encouraged to
become shareholders in the business through regular invitations to join
sharesave schemes.
The Group is committed to creating a fair, enjoyable and fulfi lling
work environment and has policies in place to prevent discrimination,
bullying or harassment.
The nature of our business presents a range of potential hazards and the
Directors are committed to ensuring we have high standards of health
and safety across the Group. Further enhancements made during the
year include investment in training with a new e-learning platform,
the creation of a help desk to register any incidents or concerns, and
augmented Board reporting. There were seven reportable incidents
(RIDDOR) across the Group, compared to six in the previous year.
Sustainability and limiting environmental impact
The Group seeks to operate all activities in a sustainable manner, and
management are actively encouraged to consider and minimise the
environmental impact of their operations. Energy usage is recorded
across the Group and reported centrally for monitoring.
The Group has complied with the government’s energy assessment
scheme (ESOS) for a number of years and is currently making
preparations for the implementation of the new Streamlined Energy &
Carbon Reporting (SECR) scheme.
Fuel effi ciency is paramount in vehicle investment decisions, and
mileage management is a key task for all fl eet responsible colleagues.
Signifi cant capital expenditure on environmental and water
management projects at Carmarthen mill have continued. Recycling
processes operate across the Group for plastics, paper, cardboard,
metal, wood, electrical equipment and used oils.
In November 2018 we
were pleased to receive the
Green Dragon award which
recognises the actions we
are taking to understand,
monitor and control
the
impacts on the environment
at our Llansantff raid site.
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Social engagement
Our Corporate Values
Making a positive diff erence to the communities in which we operate is
important to the Group – we support the communities surrounding our
depots and business offi ces by supporting local events, fundraising
activities and community groups. We have partnered with the NFU by
sponsoring the NFU Cymru/Wynnstay Sustainable Agriculture Award.
The Wynnstay Board has committed to preventing modern slavery and
human traffi cking acts within its corporate activities, and to ensure that
its national and international supply chains are free from such abuses.
There are policies in place to mitigate the risk and promote awareness,
including risk based auditing of our supply chain.
We also have active links with Harper Adams University, which is a
specialist provider of higher education for the agricultural and rural
sector, including sponsoring the Wynnstay Beef and Wynnstay
Youngstock awards.
During the year, the Group introduced a Whistleblowing policy which
provides all colleagues with a structured process to follow if they wish
to raise concerns about any potential malpractice and has processes
in place to guard against the risk of fraud and corruption.
We celebrated the end of our centenary year by coming together at
a Black-Tie dinner in January 2019 to raise money for Children with
Cancer UK and have also supported the Royal Agricultural Benevolent
Institution.
Across the Group we donated £24,700 to charity over the course
of the year, including £19,000 from the Centenary Dinner and a
further £19,700 to sponsorship of community events, such as local
agricultural shows.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
39
39
The performance criteria attached to all awards will ensure that the
maximum opportunity will only be realised in the event of exceptional
performance, and no payments will be made where performance has
been inadequate.
The Remuneration Committee remains fully committed to an open and
honest dialogue with our shareholders, and we welcome your views on
any aspects of remuneration at any time.
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 business objectives. Proper regard
is given to the need to recruit and retain high quality and motivated
colleagues at all levels and to ensure the eff ective 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, and takes appropriate external professional advice where
considered necessary. Executive Director remuneration packages
were reviewed in 2018 following advice taken from RSM Tax and
Advisory Services LLP.
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:
Directors’ Remuneration Report
Board Remuneration
INTRODUCTORY STATEMENT
As Chair of the Remuneration Committee and on behalf of the Board of
Directors, I am delighted to present our report on Board remuneration
for the Financial Year ended 31 October 2019.
Our approach to remuneration
The Committee conducted a full review of the Group’s Remuneration
Policy in 2018 with the assistance of RSM Tax & Advisory Services LLP,
and as a result implemented a number of changes to the remuneration
of Executive Directors with a focus on ensuring that:
•
•
•
the remuneration packages off ered are competitive within
the marketplace that the Company operates, allowing it to
attract and retain the talent necessary to deliver the results
demanded by the Board and the Company’s shareholders;
the performance-based elements of remuneration are aligned
with the Group’s strategic objectives, with measures that
reward exceptional achievement whilst avoiding rewarding
poor performance; and
the remuneration structures provide the mechanisms to
protect shareholders where necessary and adopt a suffi ciently
long-term basis for aligning the interests of Executive Directors
with those of investors.
The Committee’s approach to remuneration is based on off ering a
competitive but not excessive reward package for Executive Directors
that aligns their pay with the strategy of the Group. We seek to
encourage, incentivise and motivate those behaviours in our Executive
Directors which we believe will deliver long-term success for the Group
and strong returns for its shareholders. In addition to seeking to align
the interests of Executive Directors with those of shareholders, our
Policy seeks to adopt best practice and comply with all relevant laws
and corporate governance regulations, giving the Group a sound basis
for long-term growth and progression.
Committee decisions on remuneration
During the 2018 review, the Committee introduced a new long-term
incentive arrangement for Executive Directors and other Senior
Managers in the form of a Performance Share Plan (“PSP”) which is
based on annual awards with a performance period of three years
and a further holding period of two additional years. In line with
good corporate governance practice, the new PSP includes malus
and clawback provisions. Having reached a view on the preferred
structure of a long-term incentive scheme, the Committee decided
that it wished to obtain shareholder approval for the new PSP before
granting any awards. A resolution was therefore put to the Company’s
Annual General Meeting in March 2019, which was overwhelmingly
supported. The Committee now intends to grant the initial awards
under the new scheme immediately following the announcement of
the 2019 fi nancial results in January 2020. For the Executive Directors,
the structure of the 2020 awards will be based on nil cost options over
a number of shares equating to 40% of the individual’s base salary
divided by the market price of shares on the day before the grant.
The number of shares eligible to vest after three years will depend on
stretching performance targets based on diluted earnings per share
growth (75%) and the Group’s return on capital employed (25%).
On a similar basis, the Committee reviewed the Annual Performance
Bonus schemes for Executive Directors during 2018 and, introduced
(APB). These contain ambitious
new arrangements
performance criteria which include targets based on profi t before
tax (75%) and stretching, specifi c and measurable strategic and/or
individual objectives (25%).
for 2019
In line with comparable companies, the Committee proposes that
under the Remuneration Policy:
•
•
the maximum bonus opportunity in the APB will be 100% of
base salary in the case of all Executive Directors; and
the maximum award opportunity under the PSP will be over
shares with a market value at grant of 100% of base salary.
40
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
EXECUTIVE DIRECTORS:
Basic Salary
Purpose: To provide an appropriate amount of basic fi xed income to enable the recruitment and retention of eff ective management to implement
Group strategy.
Operation: The Committee reviews base salaries on an annual basis, consistent with the reviews conducted for other colleagues. The review
takes into account:
•
•
•
•
•
•
absolute and relative Group profi tability;
any changes to the scope of each role and responsibilities;
any changes to the size and complexity of the Group;
salaries in comparable organisations;
pay increases elsewhere in the Group; and
the impact of any increases to base salary on the total remuneration package.
Maximum opportunity: The Remuneration Committee has set no overall maximum on salary increases, as it believes that this creates an
anchoring eff ect for Executive Directors and other colleagues.
Performance measures: None, although individual performance, skills and experience are taken into consideration by the Remuneration
Committee when setting salaries.
Annual Bonus Plan (ABP)
Purpose: To incentivise the Executive Directors to deliver the Group’s Corporate Strategy by focusing on annual goals that are consistent with
longer-term strategic objectives.
Operation: Bonus targets are reviewed and set on an annual basis. Pay-out levels are determined by the Remuneration Committee after the year-end,
after completion of the audit, based upon a rigorous assessment of performance against the targets.
Malus provisions apply for the duration of the performance period and any deferral period allowing the Remuneration Committee to reduce to
zero any unvested or deferred awards. Clawback provisions apply to cash amounts paid and shares or cash released for three years following
payment or release, allowing the Remuneration Committee to claim back all or any amount paid or released.
The circumstances in which malus and/or clawback provisions may be triggered include:
•
•
•
if the assessment of any performance condition was based upon erroneous or inaccurate or misleading information;
if a material misstatement is discovered that results in the audited accounts of the Group being adjusted; or
in the event of any action or conduct of a participant that amounts to fraud or gross misconduct.
Maximum opportunity: The maximum annual bonus opportunity that can be earned for any year is capped at 100% of base salary for all
Executive Directors. Payments at or approaching these levels would require an exceptional level of performance.
Performance measures: The payment of awards under the APB is dependent upon performance conditions based upon:
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profi t before tax (PBT) after accrual for bonus payments (75% weighting); and
stretching, specifi c and measurable strategic and/or individual objectives. (25% weighting).
The Remuneration Committee believes the chosen metrics are suitably aligned with the Group’s strategy and are focused on delivering long-term
growth and shareholder return.
Wynnstay Profi t Related Pay
Purpose: An all-employee scheme in which the Executive Directors participate on the same basis as all other colleagues, designed to encourage
achievement of profi t budgets within main trading subsidiaries.
Operation: An employee scheme to reward all colleagues with a pro-rata profi t share, based on a pre-set formula. Paid in February following the
announcement of the fi nancial results for the previous year, after completion of the annual audit.
Performance measures: Based upon the pre-tax profi t of two trading subsidiaries, as a net percentage of revenues adjusted for commodity
infl ation and subject to a total cap on the overall all-employee pay-out of 10% of profi ts of the participating companies.
Performance Share Plan (PSP)
Purpose: To incentivise Executive Directors to focus on the long-term strategic objectives of the Group and to deliver substantial shareholder
value, aligning their interests with the interests of shareholders.
Operation: Awards may be granted annually under the PSP and will consist of rights over shares, calculated as a percentage of base salary.
Vesting is subject to the Group’s performance, measured over three years and is followed by a holding period in respect of 50% of the vested
shares, of which one half are released after a one-year holding period and one half after a two-year holding period. Malus provisions apply for
the duration of the performance period and shares held under deferral arrangements, allowing the Remuneration Committee to reduce to zero
any unvested or deferred awards. Clawback provisions apply until two years after the date upon which any entitlement becomes unconditional,
allowing the Remuneration Committee to claim back all or part of the value of any shares vested.
The circumstances in which malus and/or clawback provisions may be triggered are as stated in relation to the APB above.
The principal terms of the PSP were approved by shareholders at the 2019 AGM.
Maximum opportunity: The maximum PSP award opportunity per Executive Director, in respect of any fi nancial year, is limited to rights over
shares with a market value at grant of 100% of base salary.
Performance measures: The vesting of all awards made under the PSP is dependent upon performance conditions based upon:
•
•
EPS growth (75% weighting); and
return on capital employed (25% weighting).
The Remuneration Committee believes the chosen metrics are suitably aligned with the Group’s strategy and are focused on delivering long-term
growth and shareholder return.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Directors’ Remuneration Report continued
All-employee share plans
Purpose: To align the interests of the broader employee base with the interests of shareholders and to assist with recruitment and retention.
Operation: The Group currently operates a HM Revenue & Customs-approved Save As You Earn plan. In accordance with the relevant tax
legislation, the Executive Directors are entitled to participate on the same basis (and subject to the same maximums) as other Group colleagues.
Maximum opportunity: As determined by the statutory limits in force from time to time.
Performance measures: None.
Pension
Purpose: To provide an income for Executive Directors during their retirement and enable the Group to recruit and retain suitable individuals.
Operation: Fixed company contributions expressed as a percentage of current basic salary for each individual are paid into a personal pension
scheme held in that individual’s name. In addition, 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.
Benefi ts
Purpose: To attract and retain suitable Executive Directors and assist Executive Directors in the performance of their duties.
Operation: The benefi ts provided by the Group to Executive Directors are currently restricted to the provision of a company car and private
medical insurance.
Maximum opportunity: Dependent upon the cost of providing the relevant benefi ts and the individual’s personal circumstances. The
Remuneration Committee examines the cost of benefi t provision and will only agree to provide benefi ts that are in line with market practice and
cost-eff ective for the Group.
Performance measures: None.
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;
Post employment restrictive covenants lasting twelve months; and
Standard non-compete restrictions during employment.
NON-EXECUTIVE DIRECTORS:
Basic Annual Fee
Purpose: To attract and retain a balanced skill set of individuals to ensure strong stewardship and governance of the Group.
Operation: Fees are set so as to refl ect 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.
Travelling Expenses
Purpose: To reimburse legitimately incurred costs of attending necessary Board and associated meetings.
Operation: Pre-set rates used to reimburse mileage, travel, accommodation and other incurred expenses in line with those used for other
colleagues.
Medical Insurance Benefi t
Purpose: To assist Directors in the completion of their duties.
Operation: Benefi ts 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 fi xed period of three years after initial twelve months; and
Post employment restrictive covenants lasting twelve months.
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Remuneration Report
EXECUTIVE DIRECTOR REMUNERATION
A review of remuneration arrangements for executive directors and senior executives was carried out by the Remuneration Committee following
advice received from RSM Tax and Advisory Services LLP in 2018. This review resulted in the implementation of current packages which are
designed to ensure both the continued competitiveness of remuneration levels, and the satisfaction of current investor expectations with regard
to governance arrangements for Long-Term Incentive Plans.
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 eff ective from November 2019, is shown in the table below in column A. The previous annual salary,
where relevant, is shown in column B, with the actual amounts received during the last fi nancial year shown in column C.
Basic Salary
Executive Director
G W Davies
B P Roberts
D A T Evans
Column A
Column B
Column C
Current Basic
Previous Basic
Actual Salary
Salary
Salary
Received as a Director
£000
204
163
148
£000
200
160
145
Nov 17 – Oct 18
£000
200
160
145
Annual Performance Bonuses and Profi t Related Pay. The bonus payments made to executive directors in March 2019, and therefore
during the fi nancial year under review, were in relation to the performance of the business for the fi nancial year 2017/18. These contractual
bonus schemes for that period for G W Davies and D A T Evans were based on a fi xed percentage of the pre-tax Profi t of Wynnstay (Agricultural
Supplies) Ltd. The scheme for B P Roberts for the fi nancial year 2017/18 was based on a fi xed percentage of the Group pre-tax Profi t, which
includes the Group’s share of pre-tax profi ts from joint ventures and associate investments. The respective bonus percentages, and the payments
made for the fi nancial year ending October 2018, received in March 2019, are shown in the table below in columns A & B respectively. The
Executive Directors also participate in the Wynnstay Profi t 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 profi t of Wynnstay (Agricultural Supplies) Limited
and GrainLink Limited divided by the aggregate of the combined revenues. The scheme is subject to a limiting factor preventing the total paid
under the arrangements from exceeding 10% of the profi ts of the participating companies. The relevant rate for 2018, paid in February 2019, was
3.1% (2018: 3.0%), with the actual PRP paid to each individual executive shown in column C below. The anticipated rate for 2019, to be paid in
February 2020 relating to the last fi nancial year is 1.6% of relevant earnings.
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Bonuses
Executive Director
G W Davies
B P Roberts
D A T Evans
Column A
Annual
bonus %
0.750%
0.550%
0.750%
Column B
Column C
Bonus received
PRP received
£000
£000
Mar 19
Mar 18
Feb 19
Feb 18
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n/a
7
35
5
4
4
n/a
4
4
For the fi nancial year 2018/19, the executive directors will receive bonuses in March 2020 calculated in accordance with the revised Annual
Performance Bonus Plan introduced for periods starting that year and described in the Remuneration Policy above.
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Directors’ Remuneration Report continued
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 defi ned Company contributions to a personal pension scheme held in the individual’s name, expressed
as a percentage of basic salary, and the amounts paid on behalf of each individual for their period of service as a director during the last fi nancial
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 the
executive directors belong, had a total renewal cost at November 2018 of £81,165 (2017: £74,219), and there were 631 (2017: 577) members
covered, equating to an average cost of £129 per person (2017: £129).
Pension
Executive Director
Gareth Davies
Paul Roberts
Andrew Evans
Column A
Pension %
Column B
Pension Contribution
9.6%
9.6%
9.6%
£000
20
16
14
Benefi ts 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 benefi t in kind value calculated in accordance with HMRC rules. These
values for the tax year ending April 2019 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 2018 is shown below in column B.
Benefi ts in kind
Executive Director
Gareth Davies
Paul Roberts
Andrew Evans
Column A
Column B
Company Car Value
Private Medical Cover
£10,240
£10,997
£11,222
£777
£777
£777
Long-Term Incentives. The Remuneration Policy provides for a Performance Share Plan (PSP) to incentivise executive directors to focus on the
long-term strategic objectives of the Group and to deliver substantial shareholder value, aligning their interests with the interests of shareholders.
This PSP is intended to grant option awards annually, with rights over shares, calculated as a percentage of base salary. Other conditions are
explained in the Remuneration Policy above. No grants of options under this arrangement were made during the 2018/19 fi nancial year, but the
Remuneration Committee intend to issue the fi rst awards in January 2020 to the three executive directors each with rights over shares to the
value of 40% of their respective annual salaries, as at the date of grant.
Further information relating to the PSP is set out in the Rules of the scheme which are published on the Group’s website at
https://www.wynnstay.co.uk/corporate-governance/wynnstay-performance-share-plan/
Therefore, the number of current options as at 31 October 2019 under various schemes held by executive directors who have held offi ce during
the year is shown in the table below :
Share Option Table
LTIP Schemes
Other Outstanding Options
Executive Director
Gareth Davies
Paul Roberts
Andrew Evans
Maximum Award
No. of Options
SAYE
No. of Options
CSOP
No. of Options
Nil
Nil
Nil
7,986
3,121
Nil
8,000
8,000
Nil
Other Share Schemes. The executive directors participate in the discretionary Approved Company Share Option Plan (CSOP), which is a tax
effi cient 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 a 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
2019 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 August 2021 and March 2024, with further details provided in the Director’s Report on page 34 to 35 and in Note 9 to
the accounts.
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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
refl ect the factors pertinent to their respective positions. Details of the amounts received during the last fi nancial year and the current levels of
Basic Annual Fees being paid are given in the table below.
Non-Executive Director
Financial Year ending31 October 2019
Financial Year ending 2018
Jim McCarthy
Philip Kirkham
Steve Ellwood
Howell Richards
Basic Fee
£000
Benefi ts in
kind
£000
Travelling
Expenses
£000
Current Basic
Fee
£000
Benefi ts in
kind
£000
50
34
34
34
-
1
-
1
1
1
1
1
50
34
34
34
-
1
-
1
Philip M. Kirkham
Vice-Chairman and Chairman of Remuneration Committee
21 January 2020
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
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Independent auditor’s report to the members of Wynnstay Group Plc
OPINION
We have audited the financial statements of Wynnstay Group Plc
(the ‘parent company’) and its subsidiaries (the ‘Group’) for the year
ended 31 October 2019 which comprise consolidated statement
of comprehensive income, consolidated and company balance
sheets, consolidated and company statement of changes in equity,
consolidated and company cash flow statements, principle accounting
policies and notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group and parent company financial statements
is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state
of the Group and of the parent company’s affairs as at 31
October 2019 and of the group’s profit for the year then
ended;
the Group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union 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 under
those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are
independent of the parent company and the Group in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied
to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation
to which the ISAs (UK) require us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is not appropriate;
or
the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the Group’s or the parent company’s ability to
continue to adopt the going concern basis of accounting for
a period of at least twelve months from the date when the
financial statements are authorised for issue.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, 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. This matter was 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 this matter.
46
IMPAIRMENT OF GOODWILL
As described in the accounting policies on page 56 and Note 13
(Goodwill), the Group recognises goodwill of £15.0m (2018: £14.8m).
Management are required to review the carrying value of annually for
impairment.
The Group continues to operate in an environment of fluctuating
commodity prices, competitor activity and pressure on margins.
Management exercise significant judgement in determining the
underlying assumptions used
the
in
assumptions include the discount rate used, the allocation of assets
to cash generating units (CGU) and the future cash flows attributed to
each CGU. The sensitivities associated with these reviews have been
disclosed in Note 13.
impairment
review;
the
The potential impairment of the group’s goodwill is a significant risk for
the audit given the judgements involved.
How we addressed the key audit matter:
• We checked the calculations in management’s model for
the impairment assessment by verifying the accuracy of the
model prepared;
• We assessed the reasonableness of the assumptions
underlying management’s assessment of goodwill, including
those around short term and long term growth rate future
changes in cash flows in particular within the Grainlink CGU
by considering the reasonableness of any assumptions
made against corroborating evidence. We also assessed
the discount rates used by comparing these with internally
and externally derived data and using our own valuation
specialists;
• We performed sensitivity analysis on the key assumptions
noted above;
• We also assessed 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.
OUR APPLICATION OF MATERIALITY
Group materiality
2019
Group materiality
2018
Basis for materiality
£375,000
£380,000
5% of profit before
tax (2018: 4% of
profit before tax)
We apply the concept of materiality both in planning and performing
our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, intruding
omissions, could influence the economic decisions of reasonable
users that are taken on the basis of the financial statements.
Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements
as a whole.
We consider profit before tax to be the most significant determinant
of the Group’s financial performance used by shareholders given the
listed status of the Group.
Performance materiality is the application of materiality at the
individual account or balance level set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial
statements as a whole. Performance materiality was set at £262,500
(2018: £247,000) which represents 70% (2018: 65%) of the above
materiality levels. This was the threshold selected in response to the
aggregation risk for the Group audit and our assessment of the overall
control environment and the low level of misstatements in the past..
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Whilst materiality for the financial statements as a whole was £375,000
(2018: £380,000), each component of the Group was audited to a
lower level of materiality. Audits of the components were performed
at a materiality level calculated by reference to a proportion of Group
materiality appropriate to the relative scale of the business concerned.
The Parent company materiality was £45,000 (2018: £237,000). We
also applied component materiality’s, which ranged from £45,000 to
£281,250, having regard to the mix of size and risk profile of the Group
across the components.
We agreed with the Audit Committee that we would report to the
committee all individual audit differences identified during the course
of our audit in excess of £11,250 (2018: £9,500). We also agreed to
report differences below these thresholds that, in our view, warranted
reporting on qualitative grounds
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at the Group level.
The Group has 12 subsidiaries, 3 (2018: 3) of which were determined
to be significant components to the Group alongside the parent entity
and were subject to full scope audits.
Together with the parent company and its Group consolidation, which
was also subject to a full scope audit, these components represented
the principal business units of the group and accounted for 100%
of the Group’s revenue and profit before tax and 99% of the group’s
assets. The work on all significant components, including the audit of
the parent company, was performed by the Group team.
The remaining 1% of the total Group assets is represented by 5 reporting
components none of which contributed to the Group’s revenue or
profit before tax and none of which individually represented more than
1% of total group assets. For these non significant components, BDO
LLP performed analytical reviews at an aggregated Group level to re-
examine our assessment that there were no significant risk of material
misstatement within these.
OTHER INFORMATION
The directors are responsible for the other information. The other
information comprises the information included in the annual report
and financial statements 2019, other than the financial statements and
our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or
a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact. We have
nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE
COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the
audit:
•
•
the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY
EXCEPTION
In the light of the knowledge and understanding of the Group and the
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the directors’ report.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in
our opinion:
•
•
•
•
adequate accounting records have not been kept 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
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Responsibility statement of the directors
in respect of the Annual Report and Accounts, Strategic Report and
Directors’ Report and the Financial
Statements set out on page 36, the directors are responsible for the
preparation of the financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group’s and the 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 the
directors 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 FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
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 an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a 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 the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report
USE OF OUR REPORT
This report is made solely to the parent 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 parent 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 parent company and the parent company’s
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Stuart Wood (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Manchester
United Kingdom
21 January 2020
BDO LLP is a limited liability partnership registered in England and Wales (with
registered number OC305127).
47
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2019
2019
2018
Note
£000
£000
£000
£000
Revenue
Cost of sales
Gross profit
Manufacturing, distribution and selling costs
Administrative expenses
Other operating income
Adjusted operating profit1
Amortisation of acquired intangible assets and share-based
payment expense
Non-recurring items
Group operating profit
Interest income
Interest expense
Share of profits in joint ventures and associates accounted for
using the equity method
Share of tax incurred by joint ventures and associates
Profit before taxation
Taxation
Profit for the year and other comprehensive income
attributable to the equity holders
Basic earnings per ordinary share (pence)
Diluted earnings per ordinary share (pence)
2
4
5
5
3
3
7
10
12
12
490,602
(428,621)
61,981
(48,177)
(6,434)
385
7,755
(77)
(301)
7,377
(184)
360
7,553
(1,421)
6,132
30.95
30.95
164
(348)
463
(103)
462,657
(400,950)
61,707
(46,718)
(5,896)
335
9,428
(71)
69
9,426
(191)
294
9,529
(1,821)
7,708
39.11
38.94
92
(283)
376
(82)
The notes on pages 57 to 84 form part of these financial statements.
There was no other comprehensive income during the current and prior year.
1Adjusted results are after adding back amortisation of acquired intangible assets, share-based payment expense and non-recurring items.
48
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 Consolidated and Company Balance Sheet
For the year ended 31 October 2019
Registered Number 2704051
Group
2019
£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
- loans 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
Jim McCarthy – Director
Paul Roberts - Director
13
15
16
17
17
14
19
20
18
23
23
21
22
23
21
25
26
14,968
2,372
23,225
-
3,175
261
44,001
42,239
63,887
4,413
10,608
121,147
165,148
(3,686)
(62,113)
(894)
(66,693)
54,454
(3,078)
(201)
(228)
(3,507)
(70,200)
94,948
4,974
30,284
3,429
56,261
94,948
The Company generated profit of £3,142,000 (2018: profit of £4,164,000).
The financial statements were approved by the Board of Directors on 21 January 2020 and signed on its behalf.
The notes on pages 57 to 84 form part of these financial statements.
2018
£000
14,818
2,372
21,979
-
2,863
89
42,121
52,250
70,907
2,812
6,676
132,645
174,766
(3,887)
(74,522)
(1,102)
(79,511)
53,134
(3,766)
(157)
(259)
(4,182)
(83,693)
91,073
4,943
29,941
3,377
52,812
91,073
Company
2019
£000
-
2,372
9,095
42,562
191
-
54,220
-
-
4,413
7
4,420
58,640
(2,140)
(658)
(133)
(2,931)
1,489
(902)
-
-
(902)
3,833
54,807
4,974
30,284
3,260
16,289
54,807
2018
£000
-
2,372
8,489
42,562
191
-
53,614
-
2,799
2,812
4
5,615
59,229
(2,647)
(249)
(55)
(2,951)
2,664
(2,356)
-
-
(2,356)
(5,307)
53,922
4,943
29,941
3,208
15,830
53,922
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Consolidated Statement of Changes in Equity
As at 31 October 2019
Group
At 31 October 2017
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 disposed of by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
At 31 October 2018
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 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
4,916
Share
premium
account
£000
29,529
Other
reserves
Retained
earnings
Total
£000
3,319
£000
£000
47,628
85,392
-
-
27
-
-
-
27
-
-
412
-
-
-
412
-
-
-
3
-
55
58
7,708
7,708
7,708
7,708
-
-
439
3
(2,524)
(2,524)
-
55
(2,524)
(2,027)
4,943
29,941
3,377
52,812
91,073
-
-
31
-
-
-
31
-
-
343
-
-
-
343
-
-
-
3
-
49
52
6,132
6,132
6,132
6,132
-
-
374
3
(2,683)
(2,683)
-
49
(2,683)
(2,257)
At 31 October 2019
4,974
30,284
3,429
56,261
94,948
All amounts are derived from continuing operations.
The notes on pages 57 to 84 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
50
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 Company Statement of Changes in Equity
As at 31 October 2019
Company
At 31 October 2017
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 disposed of by ESOP trust
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
At 31 October 2018
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 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
4,916
Share
premium
account
£000
29,529
Other
reserves
Retained
earnings
Total
£000
3,150
£000
£000
14,190
51,785
-
-
27
-
-
-
27
-
-
412
-
-
-
412
-
-
-
3
-
55
58
4,164
4,164
4,164
4,164
-
-
439
3
(2,524)
(2,524)
-
55
(2,524)
(2,027)
4,943
29,941
3,208
15,830
53,922
-
-
31
-
-
-
31
-
-
343
-
-
-
343
-
-
-
3
-
49
52
3,142
3,141
3,142
3,141
-
-
374
3
(2,683)
(2,683)
-
49
(2,683)
(2,257)
At 31 October 2019
4,974
30,284
3,260
16,289
54,807
The notes on pages 57 to 84 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Consolidated and Company Cash Flow Statement
As at 31 October 2019
Cash flows from operating activities
Cash generated from/(used in) operations
Interest received
Interest paid
Tax paid
Net cash generate from/(used by) 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
Acquisition of subsidiaries, net of cash acquired
Own shares disposed of by ESOP trust
Dividends received from associates
Dividends received from subsidiaries
Note
36
Group
2019
£000
14,756
164
(348)
(1,680)
12,892
288
(2,412)
-
(893)
3
132
-
2018
£000
2,831
92
(283)
(1,674)
966
548
(2,310)
20
(1,021)
3
755
-
Net cash (used by)/generated from investing activities
(2,882)
(2,005)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital
Finance lease principal repayments
Proceeds from borrowings
Repayment of borrowings
Dividends paid to shareholders
Net cash (used by)/generated from financing activities
Net increase/(decrease) 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 57 to 84 form part of these financial statements.
374
(1,798)
-
(1,971)
(2,683)
(6,078)
3,932
6,676
10,608
439
(1,453)
3,500
(1,161)
(2,524)
(1,199)
(2,238)
8,914
6,676
Company
2019
£000
2018
£000
2,223
(2,154)
31
(59)
(50)
-
(39)
(20)
2,145
(2,213)
-
(1,007)
-
-
3
132
3,000
2,128
374
-
-
(1,961)
(2,683)
(4,270)
3
4
7
362
(1,187)
20
-
3
755
1,950
1,903
439
-
3,500
(1,102)
(2,524)
313
3
1
4
52
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 Principal Accounting Policies
GENERAL INFORMATION
Wynnstay Group Plc has a number of operations. These are described in the segmental analysis in note 2.
Wynnstay Group Plc is a company incorporated and domiciled in the United Kingdom. The address of its registered office is shown on page 23.
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
The Group’s financial statements have been prepared in accordance
with International Financial Reporting Standards as adopted by the
EU (IFRS), 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.
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.
GOING CONCERN
As highlighted in note 23 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.
The Group’s forecasts and projections, taking account of reasonably
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 2020. 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
The Group’s consolidated financial statements incorporate the financial
statements of 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 joint ventures and associates.
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable
returns from the investee, and the ability of the investor to use its
power to affect those variable returns. Control is reassessed whenever
facts and circumstances indicate that there may be a change in any of
these elements of control.
De-facto control exists in situations where the company has the
practical ability to direct the relevant activities of the investee without
holding the majority of the voting rights. In determining whether de-
facto control exists the company considers all relevant facts and
circumstances, including:
•
•
•
•
the size of the company’s voting rights relative to both the size
and dispersion of other parties who hold voting rights;
substantive potential voting rights held by the company and
by other parties;
other contractual arrangements; and
historic patterns in voting attendance.
The consolidated financial statements present the results of the
company and its subsidiaries (“the Group”) as if they formed a single
entity. Intercompany transactions and balances between Group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the statement
of financial position, the acquiree’s identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the
acquisition date. The fair value of contingent consideration is assessed
using management judgement to reflect the likelihood of the pertinent
matters being achieved. The results of acquired operations are
included in the consolidated statement of comprehensive income from
the date on which control is obtained. They are deconsolidated from
the date on which control ceases.
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 joint ventures and associates
are accounted for using the equity method.
REVENUE RECOGNITION
Revenue is income arising for the sale of goods and services in the
ordinary course of the Group’s activities, net of value added taxes and
discounts. Revenue is recognised when performance obligations are
satisfied, and control has transferred to the customer. Although the
Group does provide some services (agronomy, such as analysis of
nutritional content of sileage samples), the vast majority of revenue
relates to sale of goods and consequently the level of judgement
required to determine the transaction price or the timing of transfer of
control is low.
Agriculture
For feed, seed, fertiliser and other agricultural products sold in bulk to
farmer customers, revenue is recognised on collection by, or delivery
to, the customer and the Group had evidence that all criteria for
acceptance have been satisfied.
Specialist Agricultural Merchanting
For goods sold in depots, revenue is recognised at the point of sale.
For goods sold through catalogues or online, revenue is recognised
on collection by, or delivery to, the customer. Some contracts provide
customers with a limited right of return, but experience has shown that
the value of these returns is immaterial.
53
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Principal Accounting Policies continued
AMORTISATION OF ACQUIRED INTANGIBLE ASSETS, SHARE-BASED
PAYMENT EXPENSE AND NON-RECURRING ITEMS
Amortisation of acquired intangible assets, share-based payment
expense and non-recurring items that are material by size and/or by
nature are presented within their relevant income statement category
but highlighted separately on the face of the consolidated statement of
comprehensive income and within a note to the financial statements,
see note 5. The separate disclosure of profit before these items
helps provide a better indication of the Group’s underlying business
performance is discussed in the non-IFRS alternative performance
measure ‘Underlying pre-tax profit’ in the Finance Review on pages
20 to 21.
Events which may give rise to non-recurring items include, but are not
limited to, gains or losses on the disposal of subsidiaries/businesses,
gains or losses on the disposal or revaluation of properties, gains or
losses on the disposal of investments, the restructuring of the business,
the integration of new businesses, acquisition related costs, changes
to estimates in relation to contingent consideration for prior period
business combinations and asset impairments including impairment
of goodwill.
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 provisions of the instrument. The
main categories of financial instruments are:
Trade and other receivables and loans to joint ventures
Wynnstay’s objective is to hold trade receivables in order to collect
contractual cash flows and the contractual cash flows are solely
payments of principal and interest. Trade and other receivables are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried
at amortised cost using the effective interest rate method, less
provision for impairment.
Impairment provisions for trade debtors are recognised based on
the simplified approach within IFRS 9 using a provision matrix in
the determination of the lifetime expected credit losses. To measure
expected credit losses on a collective basis, trade receivables are
grouped based on similar aging. The expected loss rates are based on
the Groups historical credit losses experience over the twelve month
period prior to the period end. During this process the probability of
the non-payment of the trade debtors is assessed. For trade debtors,
which are reported net, such provisions are recorded in a separate
provision account with the loss being recognised within administrative
expenses in the statement of comprehensive income. On confirmation
that the trade debtor will not be collectable, the gross carrying value of
the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward looking expected
credit loss model. The methodology used to determine the amount
of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset. For
those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses
along with gross interest income are recognised. For those for which
credit risk has increased significantly, lifetime expected credit losses
along with the gross interest income are recognised. For those that are
determined to be credit impaired, lifetime expected credit losses along
with interest income on a net basis are recognised.
Investments
Investments are measured at fair value in the statement of financial
position, with value changes recognised in profit or loss, except for
those equity investments for which the entity has elected to present
value changes in ‘other comprehensive income’. Cost is used as an
appropriate estimate of fair value for investments where in limited
cases there is insufficient, recent information available to measure fair
value.
54
Interest-bearing borrowings
Interest-bearing bank loans and overdrafts are initially recorded at
fair value, net of attributable transaction costs. Subsequent to 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. 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 are recognised
at fair value, less any impairment losses.
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
The Group uses derivative financial instruments to hedge its exposure
to foreign exchange, and commodity risks arising from day to day
activities. The Group does not hold or issue derivative financial
instruments for trading purposes, however, if derivatives do not qualify
for hedge accounting they are accounted for as such.
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 recognised in the Group
Statement of 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 inception the relationship between the item being
hedged and the hedging instrument. Furthermore, to document and
demonstrate an assessment of the relationship between the hedged
item and the hedging instrument. IFRS 9 has been adopted, see note
38 for more detail.
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.
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
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 annually. Any impairment is recognised immediately in
the Group Statement of 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 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.
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
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
INTANGIBLE ASSETS
The cost of an intangible asset acquired in a business combination is
its fair value at its acquisition date.
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
colleagues. 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.
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.
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Principal Accounting Policies continued
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historic experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
In the future, actual experience may differ from these estimates and
assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amount of assets
and liabilities within the next financial year are discussed below.
JUDGEMENTS
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. The IFRS 9 Financial Instruments: Recognition and
Measurement “own use” exemption removes the otherwise required
requirement to revalue all open forward contracts to fair value at the
year end.
The Group does utilise derivative grain futures contracts to commercially
hedge its open positions. At the period end any open derivatives are
fair valued, see note 24.
ESTIMATES AND ASSUMPTIONS
Impairment of goodwill
The carrying value of goodwill must be assessed for 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.
Directors consider the sensitivity to key assumptions and one cash
generating unit (GrainLink) contains reasonably possible changes in
key assumptions which could have a material impact on the carrying
value of goodwill, see note 13.
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
and expected credit loss under IFRS 9. There is a risk that the
provision will not match the trade receivables that ultimately prove to
be irrecoverable, see note 20.
Fair value measurement
A number of assets and liabilities included in the Group’s financial
statements require measurement at, and/or disclosure of, fair value.
The fair value measurement of the Group’s financial and non-financial
assets and liabilities utilises market observable inputs and data as far
as possible. Inputs used in determining fair value measurements are
categorised into different levels based on how observable the inputs
used in the valuation technique are (the ‘fair value hierarchy’):
•
•
•
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).
The classification of an item into the above levels is based on the
lowest level of the inputs used that has a significant effect on the fair
value measurement of the item. Transfers of items between levels are
recognised in the period they occur.
The Group measures a number of items at fair value:
•
•
•
•
Investment property (note 15)
Financial instruments (note 24)
Contingent consideration (note 29)
Equity settled share-based payment liabilities (note 27)
56
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 Notes to the Financial Statements
For the year ended 31 October 2019
1. GENERAL INFORMATION & SIGNIFICANT ACCOUNTING POLICIES
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.
Changes in accounting policies
New standards impacting the Group that will be adopted in the annual financial statements for the year ended 31 October 2019, and which have
given rise to changes in the Group’s accounting policies are:
•
•
IFRS 9 Financial Instruments (IFRS 9)
IFRS 15 Revenue from Contracts with Customers (IFRS 15)
Details of the impact these two standards have had are given in note 38 below.
Other new and amended standards and interpretations issued by the IASB that will apply for the first time in the next annual financial statements
are not expected to impact the Group as they are either not relevant to the Group’s activities or require accounting which is consistent with the
Group’s current accounting policies.
New Standards, interpretations and amendments not yet effective
The table below shows standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future
accounting periods that the Group has decided not to adopt early.
New Standards
IFRS 16 Leases
EU effective date for accounting periods commencing on or after
1st January 2019
Amendments to Existing Standards
EU effective date for accounting periods commencing on or after
IFRIC 23 Uncertainty over Income Tax Treatments
Annual Improvements to IFRSs (2015-2017 Cycle)
Amendments to IFRS 3 Business Combinations – Definition of a Business
Definition of Material - Amendments to IAS 1 and IAS 8
1st January 2019
1st January 2020
1st January 2020
1st January 2020
The most significant of these is IFRS 16 Leases (IFRS 16), mandatorily effective for periods beginning on or after 1 January 2019.
The Group has progressed its project dealing with the implementation of IFRS 16 and is able to provide the following information regarding its
likely impact.
IFRS 16 will first apply to the Group in the year ending 31 October 2020. The first interim accounts that will be prepared in accordance with the
new standard are the 2020 half-year results. Adoption of IFRS 16 will result in the Group recognising right of use assets and lease liabilities for all
contracts that are, or contain, a lease. For leases currently classified as operating leases, under current accounting requirements the Group does
not recognise assets or liabilities, and instead spreads the lease payments on a straight-line basis over the lease term, disclosing in its annual
financial statements the total commitment. The Group will apply the exemptions for any asset with an annual value of less than £1,000 or a lease
term shorter than 12 months.
The Board has decided it will apply the first variation of the modified retrospective approach and therefore at initial application an amount equal
to the lease liability, using the entity’s current incremental borrowing rate. This will ensure that there is no immediate impact to net assets on that
date.
At 31 October 2019 operating lease commitments amounted to £7.7m, the effect of discounting those commitments is anticipated to result in
right-of-use assets and lease liabilities of approximately £6.8m being recognised on 1 November 2019.
Instead of recognising an operating expense for its operating lease payments, the Group will instead recognise interest on its lease liabilities and
amortisation on its right-of-use assets. This will increase reported EBITDA by approximately the amount of its current operating lease cost, which
for the year ended 31 October was £3.0m. The interest element is front end loaded in proportion to the capital outstanding of the lease liability
and this is expected to result in an overall decrease in earnings of approximately £100,000 in the year ending 31 October 2020.
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2. 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 assess 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 Agricultural Merchanting 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 Agricultural Merchanting – supplies a wide range of specialist products to farmers, smallholders, and pet owners.
Other – miscellaneous operations not classified as Agriculture or Specialist Agricultural Merchanting.
The Board assesses the performance of the operating segments based on a measure of operating profit. Non-recurring costs and 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. No segment is individually reliant on any one customer.
57
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
2. SEGMENTAL REPORTING continued
The segment results for the year ended 31 October 2019 are as follows:
Year ended 31 October 2019
Revenue from external customers
Segment result
Group operating profit before non-recurring items
Share of results of joint ventures and associates before tax
Non-recurring items
Interest income
Interest expense
Profit before tax from operations
Income taxes (includes tax of joint ventures and associates)
Profit for the year attributable to equity shareholders from operations
Assets
Segment net assets
Corporate net cash (note 23)
Net assets after corporate net cash
The segment results for the year ended 31 October 2018 are as follows:
Year ended 31 October 2018
Revenue from external customers
Segment result
Group operating profit before non-recurring items
Share of results of joint ventures and associates before tax
Non-recurring items
Interest income
Interest expense
Profit before tax from operations
Income taxes (includes tax of joint ventures and associates)
Profit for the year attributable to equity shareholders from operations
Assets
Segment net assets
Corporate net debt (note 23)
Net assets after corporate net cash
Specialist
Agricultural
Merchanting
Agriculture
£000
£000
358,687
131,843
2,417
534
2,951
5,240
4
5,244
Other
£000
72
21
(75)
(54)
47,213
36,097
7,794
Specialist
Agricultural
Merchanting
Agriculture
£000
£000
334,337
128,258
3,859
427
4,286
5,548
(12)
5,536
Other
£000
62
(50)
(39)
(89)
43,878
41,848
6,324
Total
£000
490,602
7,678
463
8,141
(301)
164
(348)
7,656
(1,524)
6,132
91,104
3,844
94,948
Total
£000
462,657
9,357
376
9,733
69
92
(283)
9,611
(1,903)
7,708
92,050
(977)
91,073
58
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 3. FINANCE COSTS
Interest expense:
Interest payable on borrowings
Interest payable on finance leases
Interest receivable
Net finance costs
4. OTHER OPERATING INCOME
Rental income
2019
£000
(191)
(157)
(348)
164
(184)
2019
£000
385
5. AMORTISATION OF ACQUIRED INTANGIBLE ASSETS, SHARE-BASED PAYMENTS AND NON-RECURRING ITEMS
Amortisation of acquired intangible assets and share-based
payments
Amortisation of intangibles
Cost of share-based reward
Non-recurring items
Business re-organisation costs
Business combination expenses
Goodwill and Investment impairment
Profit on disposal of freehold property
2019
£000
28
49
77
297
4
-
-
301
2018
£000
(158)
(125)
(283)
92
(191)
2018
£000
335
2018
£000
16
55
71
-
70
138
(277)
(69)
Business re-organisation costs relate to the redundancy related expenses of colleagues leaving the business as a result of re-organising
operations.
Business combination expenses relate to business combinations in the year.
The goodwill impairment relates to goodwill held on the balance sheet of one of our subsidiaries which related to an acquisition which took place
prior to the subsidiary becoming part of the Wynnstay Group. The investment impairment relates to unlisted investments.
The profit on disposal of property is in relation to the sale of freehold property for one of our depots which was relocated.
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
6. GROUP OPERATING PROFIT
The following items have been included in arriving at operating profit:
Staff costs
Cost of inventories recognised as an expense
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
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
2019
£000
30,143
347,239
3,289
290
28
(170)
3,221
1,652
81
2019
£000
93
-
-
2018
£000
28,132
344,695
2,888
269
16
(328)
2,858
1,809
113
2018
£000
92
-
-
Included in the Group audit fee are fees of £4,000 (2018: £4,000) 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 and not recharged.
7. SHARE OF POST-TAX PROFITS OF JOINT VENTURES AND ASSOCIATES
Share of post-tax profits in associates
Share of post-tax profits in joint ventures
Total share of post-tax profits of joint ventures and associates
2019
£000
-
360
360
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
2019
£000
26,600
2,510
984
49
30,143
The average number of employees, including Directors, employed by the Group during the year was as follows:
Administration
Production
Sales, distribution and depots
The parent company did not have any employees in the current or prior year.
60
2019
No.
106
144
728
978
2018
£000
19
275
294
2018
£000
24,864
2,374
839
55
28,132
2018
£000
104
126
700
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 9. DIRECTORS’ REMUNERATION
Directors’ emoluments
Social security costs
Company contributions to money purchase pension schemes
Aggregate gains made on the exercise of Approved SAYE options
2019
£000
850
99
48
-
997
2018
£000
704
79
36
9
828
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
Ken Greetham (retired 11 July 2018)
Gareth Davies (appointed 8 May 2018)
Paul Roberts
Andrew Evans
Non-Executives
Jim McCarthy
Steve Ellwood
Philip Kirkham
Howell Richards
Basic
salary
£000
Benefits in
kind
£000
Annual
bonuses
£000
2019
Total
£000
-
200
160
145
50
34
34
34
657
-
11
12
12
-
-
1
1
37
-
51
57
50
-
-
-
-
158
-
262
229
207
50
34
35
35
852
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:
Ken Greetham (retired 11 July 2018)
Gareth Davies (appointed 8 May 2018)
Paul Roberts
Andrew Evans
Gains made on exercise of approved and unapproved share option schemes:
Gareth Davies (appointed 8 May 2018)
Paul Roberts
Andrew Evans
2019
No.
3
2019
£000
-
19
15
14
48
2019
£000
-
-
-
-
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Total
£000
125
99
157
169
50
34
35
35
704
2018
No.
4
2018
£000
9
10
10
7
36
2018
£000
-
-
9
9
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
10. TAXATION
Analysis of tax charge in year:
Current tax
- operating activities
- 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
2019
£000
1,502
(50)
1,452
(31)
(31)
1,421
2018
£000
1,886
(70)
1,816
5
5
1,821
The tax assessed for the year is lower (2018: higher) than the standard rate of corporation tax in the UK applicable to the Group, which was 19.00%
in both years and is explained as follows:
Current tax
Profit on ordinary activities before tax
Profit on ordinary activities multiplied by standard rate of
corporation tax in the UK of 19.00% (2018: 19.00%)
Effects of:
Tax effect of share of profit of joint ventures and associates
Other items
Expenses not deductible for tax purposes
Adjustment to tax charge in respect of prior years
Movement on unrecognised deferred tax
Total tax charge for year
Factors that may affect future tax charges
2019
£000
7,553
1,435
(68)
(8)
43
(50)
69
1,421
2018
£000
9,529
1,811
(56)
13
19
(70)
104
1,821
A reduction in the UK corporation tax rate from 19% to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will
reduce the Group’s future current tax charge accordingly.
11. DIVIDENDS
Final dividend paid for prior year
Interim dividend paid for current year
2019
£000
1,770
913
2,683
2018
£000
1,653
871
2,524
Subsequent to the year end it has been recommended that a final dividend of 9.40p net per ordinary share (2018: 8.95p) be paid on 30 April 2020.
Together with the interim dividend already paid on 31 October 2019 of 4.60p net per ordinary share (2018: 4.41p) this would result in a total dividend
for the financial year of 14.00p net per ordinary share (2018: 13.36p).
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www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 12. EARNINGS PER SHARE
Earnings attributable to shareholders (£000)
Basic earnings per share
Diluted earnings per share
2019
6,132
2018
7,708
2019
6,132
2018
7,708
Weighted average number of shares in issue during the year (number ‘000)
19,812
19,708
19,812
19,797
Earnings per ordinary 25p share (pence)
30.95
39.11
30.95
38.94
Basic earnings per 25p ordinary share is calculated by dividing profit for the year from operating activities attributable to ordinary shareholders by
the weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, 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.
13. 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.
Goodwill impairment
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 2019 and 2018 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 Agricultural Merchanting sectors. The CGU’s are assessed
as legal entities and there has been no change from the prior period.
The carrying amount of goodwill allocated to the Agriculture CGUs
is £8,158,797 (2018: £8,158,797), and to Specialist Agricultural
Merchanting is £6,808,947 (2018: £6,658,947).
The pre-tax discount rates used to calculate value in use were 9.5%
(2018: 9.5%) for Agriculture and 9.5% (2018: 9.5%) for Specialist
Agricultural Merchanting. 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 2.0% (2018: 2.0%) for both Agriculture and Specialist
Agricultural Merchanting.
The Directors have considered the sensitivity to key assumptions and
the majority of the Group’s impairment tests have significant headroom.
However, one CGU within the agricultural sector contains reasonably
possible changes in key assumptions which could have a material impact
on the carrying value of goodwill which therefore require disclosure.
Group
Cost
At 1 November 2017
Additions
At 31 October 2018
Additions
At 31 October 2019
Aggregate impairment
At 1 November 2017
Impairment
At 31 October 2018
Impairment
At 31 October 2019
Net book value
At 31 October 2019
At 31 October 2018
£000
15,536
590
16,126
150
16,276
1,270
38
1,308
-
1,308
14,968
14,818
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
13. GOODWILL continued
Goodwill is allocated to this CGU as follows:
Group
GrainLink
2019
£000
4,206
2018
£000
4,206
The recoverable amount of this CGU is based upon its value in use, determined by discounting future cashflows to be generated from the continuing
use for the CGU. The estimated value in use at 31 October 2019 exceeded the carrying value by approximately £266,000 (2018: £520,000) for
GrainLink.
The key assumptions used in the estimation of the recoverable amount is 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
2019
9.5%
2.0%
2018
9.5%
2.0%
Budget in year 1, followed by an
increase of £107k in year 2 and 1%
growth in years 3-5
Increase of £203k in year 1
followed by £107k in year 2
followed by 1% growth in years 3-5
Management have prepared the discounted future cashflows on a basis which they believe is achievable and there are events in place to support
the increased EBIT.
GrainLink
Discount rate
Terminal value growth rate
Budgeted EBIT growth rate (average of next 5 years)
Change required for carrying amount to be equal to recoverable amount
2019
0.3
(0.4)
(5.0)
2018
0.5
(0.7)
(7.7)
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.
64
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 14. INTANGIBLE ASSETS
Cost
Balance as at 1 November 2017 and 31 October 2018
Additions
At 31 October 2019
Aggregate amortisation
Balance as at 1 November 2017
Charge for the year
At 31 October 2018
Charge for the year
At 31 October 2019
Net book value At 31 October 2019
Net book value At 31 October 2018
Customer order
books
£000
Trademarks
£000
145
200
345
50
15
65
27
92
253
80
10
-
10
-
1
1
1
2
8
9
Total
£000
155
200
355
50
16
66
28
94
261
89
The addition in the year relates to the acquisition of Stanton Farm Supplies Limited, see note 29.
15. INVESTMENT PROPERTY
Fair value
Group
At 1 November 2017, 31 October 2018 and 31 October 2019
Company
At 1 November 2017, 31 October 2018 and 31 October 2019
£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 £178,371 (2018: £197,211).
The Directors’ valuation is based on market rental yield. If the market rental yield increased the fair value would be expected to increase.
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
16. PROPERTY, PLANT AND EQUIPMENT
Leasehold land
and buildings
£000
Freehold land
and buildings
£000
Plant, machinery
and office
equipment
£000
Motor
vehicles
£000
Group
Cost
At 1 November 2017
Additions
Acquisitions
Disposals
Reclassification
At 31 October 2018
Additions
Acquisitions
Disposals
Reclassification
At 31 October 2019
Depreciation
At 1 November 2017
Charge for the year
On disposals
Reclassification
At 31 October 2018
Charge for the year
On disposals
Reclassification
At 31 October 2019
Net book value At 31 October 2019
Net book value At 31 October 2018
Total
£000
43,313
5,112
1,535
(2,498)
-
586
168
-
(4)
420
1,170
79
-
-
-
13,569
1,072
231
(196)
(392)
20,676
1,367
1,229
(1,359)
(28)
8,482
2,505
75
(939)
-
14,284
21,885
10,123
47,462
982
-
-
6
859
10
(45)
(6)
2,995
18
4,915
28
(1,818)
(1,863)
-
-
1,249
15,272
22,703
11,318
50,542
93
82
(4)
80
251
79
-
-
330
919
919
4,973
313
(111)
127
5,302
360
-
-
5,662
9,610
8,982
14,075
1,348
(1,307)
(137)
5,463
1,414
(856)
(70)
24,604
3,157
(2,278)
-
13,979
5,951
25,483
1,459
(42)
-
15,396
7,307
7,906
1,681
(1,703)
-
5,929
5,389
4,172
3,579
(1,745)
-
27,317
23,225
21,979
The net book value of plant and machinery and motor vehicles above includes amounts of £4,816,660 (2018: £3,458,457) representing assets held
under finance leases.
66
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 16. PROPERTY, PLANT AND EQUIPMENT continued
Freehold land and
buildings
£000
Leasehold land and
buildings
£000
Company
Cost
At 1 November 2017
Additions
Disposals
Reclassification/transfers
At 31 October 2018
Additions
Reclassification/transfers
At 31 October 2019
Depreciation
At 1 November 2017
Charge for the year
On disposals
Reclassification/transfers
At 31 October 2018
Charge for the year
At 31 October 2019
Net book value At 31 October 2019
Net book value At 31 October 2018
-
192
-
420
612
24
-
636
-
67
-
92
159
61
220
416
453
Total
£000
12,342
1,195
(196)
28
13,369
1,001
5
12,342
1,003
(196)
(392)
12,757
977
5
13,739
14,375
4,594
295
(111)
(57)
4,721
339
5,060
8,679
8,036
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
4,594
362
(111)
35
4,880
400
5,280
9,095
8,489
67
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
17. FIXED ASSET INVESTMENTS
Group
Cost
At 1 November 2017
Transfer
Share of profit or investment income
Preference Shares/Ordinary distributions
Corporate simplification
At 31 October 2018
Share of profit or investment income
Disposal
At 31 October 2019
Provision for impairment
At 1 November 2018
At 31 October 2019
Net book value At 31 October 2019
Net book value At 31 October 2018
Joint
ventures
£000
Associates
£000
Other unlisted
investments
£000
2,616
(69)
275
(20)
(81)
2,721
360
-
3,081
-
-
3,081
2,721
788
-
19
(755)
-
52
-
(48)
4
-
-
4
52
136
(27)
-
-
(19)
90
-
-
90
-
-
90
90
Total
£000
3,540
(96)
294
(775)
(100)
2,863
360
(48)
3,175
-
-
3,175
2,863
68
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 17. FIXED ASSET INVESTMENTS continued
Company
Cost
At 1 November 2017
Capital contribution
Transfer
Preference Shares/Ordinary distributions
Corporate simplification
At 31 October 2018
At 31 October 2019
Provision for impairment
At 1 November 2018
At 31 October 2019
Net book value At 31 October 2019
Net book value At 31 October 2018
Share in
group
undertakings
£000
Joint
ventures
£000
Associates
£000
12,828
30,000
-
-
(266)
42,562
42,562
-
-
42,562
42,562
280
-
(69)
(20)
-
191
191
-
-
191
191
48
-
-
(48)
-
-
-
-
-
-
-
Total
£000
13,156
30,000
(69)
(68)
(266)
42,753
42,753
-
-
42,753
42,753
69
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
18. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
SUBSIDIARIES
Subsidiary undertakings represent the following limited companies, all of which were incorporated in the UK:
Company name
Proportion of shares
held (Ordinary) %
Nature of business
Registered office address
Glasson Group (Lancaster) Limited
100
Holding company
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
Stanton Farm Supplies Limited
100
100
100
100
100
100
100
100
100
100
100
Feed and Fertiliser merchant
Agricultural merchant
Dormant company
Equine and pet products distributor
Grain merchant
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
West Quay, Glasson Dock,
Lancaster, Lancs, LA2 0DB
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:
Wynnstay Agricultural (Supplies Limited) Youngs Animal Feeds Limited Glasson Group (Lancaster) Limited
Stanton Farm Supplies Limited Eifionydd Farmers Glasson Grain Limited
During the year, Wynnstay (Agricultural Supplies) Limited aquired 100% of the share capital of Stanton Farm Supplies Limited, see note 29 for more
details.
JOINT VENTURES
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
Bibby Agriculture Limited
50% - Ordinary
50% - Preference
Distribution of compound animal feeds
Old Croft, Stanwix, Carlisle, Cumbria, United
Kingdom, CA3 9BA
Wyro Developments Limited
50% - Ordinary
Property development
Total Angling Limited
50% - Ordinary
Retailer of angling products
Eagle House, Llansantffraid Ym Mechain,
Powys, SY22 6AQ
Investments in joint ventures listed above are held directly by Wynnstay Group Plc.
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
70
2019
£000
690
5,625
(3,316)
-
2,999
2018
£000
678
5,233
(3,292)
-
2,619
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 18. 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
2019
£000
17,493
(17,131)
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
2019
£000
360
2018
£000
16,876
(16,507)
2018
£000
351
PRINCIPAL ASSOCIATES
The above interest in associates is represented by the following limited companies, which are incorporated in the UK:
Company name
Interest
Nature of business
Registered office address
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
2019
£000
422
(301)
121
40
2,378
37
15
2018
£000
3,265
(1,416)
1,849
740
11,716
61
24
F
i
n
a
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c
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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
Bibby Agriculture Limited
Total Angling Limited
Celtic Pride Limited
Accounting period
31 October 2019
31 August 2019
31 October 2019
31 January 2019
71
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
18. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES continued
TRADING TRANSACTIONS
During the year, the Group and Company entered into the following trading transactions with subsidiaries, joint ventures and associates:
Transactions and balances with subsidiaries
Amounts due from subsidiary undertakings:
Trade receivables
Loans
Amounts due to subsidiary undertakings:
Trade payables
Transactions reported in the statement of comprehensive income:
Income received
Purchases
Transactions and balances with joint ventures
Amounts due from joint ventures:
Trade receivables
Loans
Amounts due to associated undertaking:
Trade payables
Transactions reported in the statement of comprehensive income:
Revenue
Purchases
Income received
Company
2019
£000
-
(458)
(458)
-
402
296
Group
Company
2019
£000
-
4,413
4,413
96
96
5,651
215
-
2018
£000
880
2,812
3,692
23
23
10,566
12,836
-
2019
£000
-
4,413
4,413
-
-
-
-
-
2018
£000
-
2,799
2,799
-
266
193
2018
£000
-
2,812
2,812
-
-
-
-
-
The above loan has been assessed for impairment under IFRS 9 Financial Instruments expected credit loss model and no adjustments have been
required.
The transactions above primarily relate to Bibby Agriculture Limited. The Group manufactures feed for Bibby Agriculture Limited at a mutually agreed
commercial rate.
72
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 19. INVENTORIES
Raw materials and consumables
Finished goods and goods for resale
Group
Company
2019
£000
10,691
31,548
42,239
2018
£000
14,938
37,312
52,250
2019
£000
-
-
-
Inventories are stated after a provision for impairment of £380,000 (2018: £345,000) (Company £nil (2018: £nil)).
20. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Amounts owed by Group undertakings
Other receivables
Current tax asset
Fair value of derivatives
Group
2019
£000
61,641
-
1,942
-
304
63,887
2018
£000
67,446
-
3,287
-
174
70,907
Company
2019
£000
-
-
-
-
-
-
2018
£000
-
-
-
2018
£000
-
2,799
-
-
-
2,799
Trade receivables are stated after a provision for impairment of £719,746 (2018: £708,456) (Company £nil (2018: £nil)).
The Company applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The expected loss
rates are based on the Groups historical credit losses experience over the twelve month period prior to the period end. Forward looking issues have
been considered, primarily in relation to the terms under which the UK will leave the EU. This has had an immaterial effect on the expected credit
loss rate.
21. TRADE AND OTHER PAYABLES
Current
Trade payables
Ammounts owed to Group undertakings
Other taxes and social security
Other payables
Accruals and deferred income
Contingent consideration
Fair value of derivatives
Non-current
Government grants
Contingent consideration
22. CURRENT TAX LIABILITIES
Current tax liabilities
Group
2019
£000
57,659
-
562
867
2,795
151
79
62,113
Group
2019
£000
16
185
201
Group
2019
£000
894
2018
£000
68,756
-
604
1,142
3,293
651
76
74,522
2018
£000
20
137
157
2018
£000
1,102
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Company
2019
£000
-
458
-
200
-
-
-
658
Company
2019
£000
-
-
-
Company
2019
£000
133
2018
£000
-
-
-
239
10
-
-
249
2018
£000
-
-
-
2018
£000
55
73
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
23. CASH, CASH EQUIVALENTS AND BORROWINGS
Group
Company
Current
Cash and cash equivalents per balance sheet and cashflow
10,608
Bank loans due within one year or on demand:
2019
£000
Secured loans
Loan capital (unsecured)
Other loanstock (unsecured)
Net obligations under finance leases
Financial liabilities - borrowings
(1,457)
(669)
(14)
(1,546)
(3,686)
2018
£000
6,676
(1,978)
(665)
(14)
(1,230)
(3,887)
2019
£000
7
2018
£000
4
(1,457)
(1,968)
(669)
(14)
-
(665)
(14)
-
(2,140)
(2,647)
Non-current
Bank loans:
Secured loans
Net obligations under finance leases
Financial liabilities - borrowings
Total net cash/(debt)
Group
Company
2019
£000
2018
£000
2019
£000
2018
£000
(902)
(2,176)
(3,078)
3,844
(2,356)
(1,410)
(3,766)
(977)
(902)
-
(902)
(3,035)
(2,356)
-
(2,356)
(4,999)
Finance lease obligations are secured on the assets to which they relate.
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 (2018: 1.5%)
of the unsecured loan capital and unsecured loanstock.
Bank loans and overdrafts of £230,132 (2018: £1,994,367) relating to subsidiary companies, are secured by an unlimited composite guarantee by
all the trading entities within the Group.
Repayment Profile
Group
Company
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
74
2019
£000
3,686
1,902
1,176
-
6,764
1,546
1,000
1,176
-
3,722
6,764
(10,608)
(3,844)
2018
£000
3,887
2,352
1,414
-
7,653
1,230
898
513
-
2,641
7,653
(6,676)
977
2019
£000
2,140
902
-
-
3,042
-
-
-
-
-
3,042
(7)
3,035
2018
£000
2,647
1,456
900
-
5,003
-
-
-
-
-
5,003
(4)
4,999
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 23. CASH, CASH EQUIVALENTS AND BORROWINGS continued
Term loans
The bank loans include term loans repayable by instalments as follows:
HSBC Bank Plc
HSBC Bank Plc
Monthly
instalment
(inc’ interest)
£99,264
£68,811
Balance
outstanding
2019
£2,069,871
£289,207
Balance
outstanding
2018
£3,219,575
£1,103,946
Interest rate
Maturity date
0.85% over base per annum
0.75% over base per annum
August 2021
March 2020
The outstanding loans are secured by an unlimited composite company guarantee by all the trading entities within the Group.
24. FINANCIAL INTRUMENTS
Valuation techniques
IFRS 13 requires financial instruments that are measured at fair value to be classified according to the valuation technique used:
•
•
•
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - inputs, other than level 1 inputs, that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
form prices)
Level 3 - unobservable inputs
•
Derivatives
All derivative financial assets and liabilities are classified as Level 1 instruments as they are quoted market prices.
•
Contingent consideration
Contingent consideration is measured at fair value using Level 3 inputs such as entity projections of future profitability. The amount recognised
relates to the ongoing profitability of the business acquired and criteria for this are set out in the sale and purchase agreements. Consequently
adjustments would only be made if the business did not perform as originally anticipated, and further sensitivity analysis is not considered to be
required.
Transfers between levels are deemed to have occurred at the end of the reporting period. There were no transfers between levels in the above
hierarchy in the period.
Reconciliation of movements in Level 3 financial instruments
Contingent consideration
As at 1 November 2017
Additions
Repayments/payments
As at 31 October 2018
Additions
Repayments/payments
As at 31 October 2019
£000
(112)
(739)
63
(788)
(150)
602
(336)
75
F
i
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a
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e
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t
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ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
24. FINANCIAL INSTRUMENTS continued
Financial instruments recognised at fair value are as follows:
Financial instruments by category
Financial assets at fair value
through profit or loss
Amortised cost
2019
£000
-
-
304
304
2018
£000
-
-
174
174
2019
£000
10,608
63,583
-
74,191
Financial liabilities at fair value
through profit or loss
Amortised cost
2019
£000
-
-
336
79
415
2018
£000
-
-
788
76
864
2019
£000
61,321
6,764
-
-
68,085
80,844
2018
£000
6,676
70,733
-
77,409
2018
£000
73,191
7,653
-
-
Cash and cash equivalents
Trade and other receivables
Derivatives
Trade and other payables
Loans and borrowings
Contingent consideration
Derivatives
Risk Management
•
Derivatives
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 IFRS 9. Derivatives may qualify as hedges for accounting purposes, as 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
resulting assets or liabilities are recorded in Trade and other receivables and Trade and other payables and are described as ‘fair value of derivatives.
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.
• 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.
76
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 24. FINANCIAL INSTRUMENTS continued
•
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. During 2019 and 2018, the
Group’s borrowings at variable rate were denominated in sterling.
The effective interest rates at the balance sheet dates were as follows:
Bank overdraft
Bank borrowings
Loan capital
Finance leases
Group
Company
2019
1.5%
1.5%
1.5%
4.8%
2018
1.3%
1.5%
1.5%
5.7%
2019
n/a
1.5%
1.5%
-
2018
n/a
1.5%
1.5%
-
The impact of a decrease or increase in interest rates during the year is shown in the table below. The Directors consider that a 1% movement in
interest rates represents a reasonable possible change.
Impact on profit after taxation
Impact on total equity
Loans and receivables
1% decrease
2019
£000
1% decrease
2018
£000
1% increase
2019
£000
1% increase
2018
£000
69
69
140
140
(69)
(69)
(140)
(140)
The sensitivity analysis is not an indication of actual results, which may materially differ. For the purposes of this sensitivity analysis all other variables
have been held constant. The method and assumptions used in the preparation of the sensitivity analysis were the same in 2019 and 2018.
•
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 £9,178,020 (2018: £11,849,003).
•
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.
F
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s
•
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.
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.
The Company has no trade receivables (2018: none).
77
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
24. FINANCIAL INSTRUMENTS continued
•
Liquidity risk
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 and revolving credit facilities in place to allow flexibility in managing liquidity. It is the Group’s policy to maintain
committed undrawn facilities in order to provide flexibility in the management of the Group’s liquidity.
The table below analyses the Group and Company’s financial liabilities which will be settled on a net basis into relevant maturity groupings based
on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the tables are the contractual
undiscounted cash flows.
Group
Within
one
year
£000
Total
£000
2019
One to
two
years
£000
2018
Two to
five
years
£000
Over
five
years
£000
Within
one
year
£000
One to
two
years
£000
Two to
five
years
£000
Over
five
years
£000
Total
£000
Bank loans and other borrowings
3,071
2,164
907
-
Finance lease liabilities
3,869
1,621
1,041
1,207
Derivatives
79
79
Trade and other payables
61,657
61,472
-
53
-
132
68,676
65,336
2,001
1,339
-
-
-
-
-
5,104
2,716
1,481
2,755
1,299
931
76
76
73,978
73,841
-
53
907
525
-
84
81,913
77,932
2,465
1,516
-
-
-
-
-
Company
Within
one
year
£000
Total
£000
2019
One to
two
years
£000
Bank loans and other borrowings
3,071
2,164
907
Amounts due from Group
undertakings
Trade and other payables
458
200
458
200
-
-
3,729
2,822
907
2018
Two to
five
years
£000
Over
five
years
£000
Within
one
year
£000
One to
two
years
£000
Two to
five
years
£000
Over
five
years
£000
Total
£000
-
-
-
-
-
-
-
-
5,094
2,706
1,481
907
-
249
-
249
-
-
-
-
5,343
2,955
1,481
907
-
-
-
-
78
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 24. FINANCIAL INSTRUMENTS continued
Trade and other payables in the tables above exclude other taxes and social security as they do not meet the definition of financial liabilities under
IFRS 9 and are not within the scope of IFRS 7
•
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an efficient capital structure to optimise the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total equity. Net debt is calculated as
total borrowings (including current and non-current borrowings) as shown in the consolidated balance sheet less cash and cash equivalents. Total
equity is as shown in the consolidated balance sheet.
Loans and borrowings
Less: cash and cash equivalents
Net (cash)/debt
Total equity
Net (cash)/debt to equity ratio (%)
2019
£000
6,764
(10,608)
(3,844)
94,948
(4.05%)
2018
£000
7,653
(6,676)
977
91,073
1.07%
The Group monitors cash balances and net (cash)/debt on a daily basis to ensure adequate headroom exists on banking facilities and that it is
compliant with banking covenants.
25. DEFERRED TAXATION
At 1 November
Charge for the year
At 31 October
The provision for deferred taxation is made up as follows:
Accelerated capital allowances
Group
2019
£000
228
-
228
Group
2019
£000
228
2018
£000
254
5
259
2018
£000
259
Company
2019
£000
-
-
-
Company
2019
£000
-
2018
£000
-
-
-
2018
£000
-
Deferred tax is calculated in full on temporary differences under the liability using a tax rate of 17% (2018: 17%). The reduction in the main rate
of corporation tax to 17% was substantively enacted on 6 September 2016. This new rate has been applied to deferred tax balances which are
expected to reverse after 1 April 2020, the date on which that new rate becomes effective.
26. SHARE CAPITAL
Authorised
Ordinary shares of 25p each
Allotted, called up and fully paid
Ordinary shares of 25p each
2019
No. of shares
000
2019
£000
2018
No. of shares
000
2018
£000
40,000
10,000
40,000
10,000
19,896
4,974
19,772
4,943
During the year 124,212 shares (2018: 87,602) were issued with an aggregate nominal value of £31,053 (2018: £21,900) and were fully paid up
for equivalent cash of £373,457 (2018: £372,642) to shareholders exercising their right to receive dividends under the Company’s Scrip dividend
scheme.
No shares (2018: 18,816) with an aggregate nominal value of £nil (2018: £4,705) were issued for a cash value of £nil (2018: £66,656) to relevant
holders exercising options in the Company.
No other shares were issued in this financial year (2018: nil).
79
F
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n
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c
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a
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e
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t
s
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
27. SHARE-BASED PAYMENTS
The following options were exercised, lapsed and outstanding at the year end:
Exercise
Price per
share £
Exercisable by
April 2015 - March 2020
As at
01 November
2018
(Exercised)/
Issued in
year
Discretionary Share Option Schemes
Granted April 2012
3.7500
Apr 2015 - Mar 2022
Granted October 2014
5.4750
Oct 2017 - Oct 2024
Savings Related Option Schemes
Granted July 2014
5.0600
Granted July 2016
Granted September 2018
3.7000
4.0000
Aug 2019 - Jan 2020
Aug 2021 - Jan 2022
Oct 2023 - Mar 2024
32,000
308,000
340,000
120,906
334,268
326,370
781,544
1,121,544
-
-
-
-
-
-
-
-
Lapsed
in year
(8,000)
(45,000)
(53,000)
(120,906)
(58,276)
(50,970)
(230,152)
(283,152)
As at
31 October
2019
24,000
263,000
287,000
-
275,992
275,400
551,392
838,392
During the year nil (2018: 8,000) Discretionary Share Options and nil (2018: 20,649) Savings Related Options were exercised and satisfied by the
allotment of nil (2018: 18,816) new shares by the Company, and nil (2018: 9,833) 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.
Fair Value of Options after 7 November 2002
During the year, the Group charged £48,824 (2018: £55,427) 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
Weighted average remaining contractual life
Number of options
Risk free interest rate at inception
Number of options exercisable
2019
£2.78
£3.51
£3.85
34.70%
2.75 years
551,392
0.50% - 0.75%
287,000
2018
£4.20
£4.65
£4.04
26.59%
3.26 years
781,544
0.50%
340,000
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.
28. 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 £230,000 (2018: £1,994,000).
80
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 29. BUSINESS COMBINATIONS
Stanton Farm Supplies Limited
On 1 April 2019, Wynnstay (Agricultural Supplies) Limited entered into a business combination and acquired 100% of the share capital of Stanton
Farms Supplies Limited, an agricultural business located in Somerset that specialises in dairy hygiene.
The acquisition extends the Group’s geographical trading area and farmer customer base, including future cross-sales opportunities.
The provisional consideration is £527,000, which is represented by £377,000 paid during the year for target net assets and goodwill and contingent
and deferred consideration of £150,000, which is expected to be paid by 31 October 2022. The consideration payable is dependent on the
finalisation of the completion net assets and the future profitability of the business.
The fair value of the contingent consideration has been based on management expectations of the future performance of the business and could
range from £nil to £150,000.
Prior to the acquisition, Stanton Farm Supplies Limited had revenues of £2,254,000, gross profit of £418,000 and profit before tax of £65,000 for
the year ended December 2018.
Amounts included in the Consolidated Statement of Comprehensive Income year to 31 October 2019 are revenues of £1,098,000 and profit before
tax of £52,000. Acquisition costs of £4,000 arose as a result of the transaction, these have been recognised as part of non-recurring items.
Provisional fair value of assets acquired:
Goodwill
Intangibles
Property, plant and equipment
Inventories
Debtors
Cash
Trade and other payables
Current Tax liabilities
Finance leases
Provisional considerations
Contingent and deferred
Settled in cash at completion and prior to 31 October 2019
The goodwill represents future sales opportunities and is not expected to be deductible for tax purposes.
£000
150
200
28
160
406
86
(454)
(19)
(30)
527
150
377
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Contingent and deferred consideration of £602,000 was also paid during the year which related to prior period acquisitions, and after netting off the
cash acquired above, the total outflow in the year amounted to £893,000.
30. CAPITAL COMMITMENTS
At 31 October 2019 the Group and Company had capital commitments as follows:
Contracts placed for future capital expenditure not provided in
the financial statements
31. 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
2019
£000
808
Land and buildings
2019
£000
2,265
4,542
919
416
804
-
2018
£000
1,239
2018
£000
1,848
4,303
1,090
441
1,112
24
Company
2019
£000
-
Other
2019
£000
55
67
-
-
-
-
2018
£000
740
2018
£000
52
37
-
-
-
-
81
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
32. GROUP FINANCIAL COMMITMENTS
The Group has guaranteed the overdrafts of one of its associate companies to a maximum of £125,000 (2018: £125,000).
33. 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 £984,399 (2018: £838,922). The liability owed to the pension schemes at 31 October 2019 was £139,329 (2018: £121,736).
34. EMPLOYEE SHARE OWNERSHIP TRUST
The Company operates an employee share ownership trust (ESOP). As at 31 October 2019, 16,834 ordinary 25p shares (2018: 6,834 ordinary 25p
shares) were held by the trust with an aggregate market value of £65,011 (2018: £28,876). The assets, liabilities, income and costs of the ESOP are
incorporated into the financial statements of the Group.
35. 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).
Total sales
Balance outstanding
Jim McCarthy
Ken Greetham (retired 11 July 2018)
Gareth Davies (appointed 8 May 2018)
Andrew Evans
Paul Roberts
Philip Kirkham
Howell Richards
Steve Ellwood
2019
£000
-
-
1,711
305,448
576
360,171
3,797,792
-
4,465,698
2018
£000
1,337
468
64
277,770
407
306,464
3,329,161
-
3,915,671
2019
£000
-
-
104
58,226
100
62,895
1,084,141
-
1,205,466
2018
£000
-
-
11
69,922
41
23,547
947,817
-
1,041,338
The Group has had transactions with the following company whose Directors include Steve Ellwood:
Total sales
Balance outstanding
2019
£000
136
2018
£000
61
2019
£000
21
2018
£000
38
Company
NIAB
82
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 36. CASH GENERATED FROM/(USED IN) OPERATIONS
Group
Company
Profit for the year from operations
Adjustments for:
Tax
Dividend received
Investment and goodwill impairment
Depreciation of tangible fixed assets
Amortisation of other intangible fixed assets
Profit on disposal of property, plant and equipment
Profit from distribution from Associate
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 loans to joint venture
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in payables
Cash generated from/(used in) operations
37. RECONCILIATION OF LIABILITIES FROM FINANCING TRANSACTIONS
2019
£000
6,132
1,421
-
-
3,579
28
(170)
(84)
(164)
348
(360)
49
2018
£000
7,708
1,821
-
138
3,157
16
(328)
-
(92)
283
(294)
55
(1,601)
10,171
7,426
(12,019)
14,756
32
(19,144)
(7,946)
17,425
2,831
2019
£000
3,141
127
(3,000)
-
402
-
-
(132)
(31)
59
-
49
(1,601)
-
2,799
410
2,223
2018
£000
4,164
76
(3,630)
266
361
-
(277)
(707)
-
39
-
55
32
-
(2,482)
(51)
(2,154)
Group
Company
Non-Current
loans and
borrowings
£000
(Note 23)
Current
loans and
borrowings
£000
(Note 23)
Non-Current
loans and
borrowings
£000
(Note 23)
Current
loans and
borrowings
£000
(Note 23)
Total
£000
Total
£000
1,896
2,512
4,408
1,111
1,494
2,605
2,356
1,144
3,500
2,356
1,144
3,500
-
(2,614)
(2,614)
1,551
808
2,359
-
-
(1,102)
(1,102)
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
-
-
-
-
-
-
-
-
-
(3,769)
(3,769)
2,057
15
793
15
2,850
30
-
-
-
(1,961)
(1,961)
(2,760)
2,760
-
(1,454)
1,454
As at 1 November 2017
Cash-flows
- New Borrowings
- Repayments of borrowings
Non-cash flows
- New finance leases
As at 31 October 2018
Cash-flows
-Repayments of borrowings
Non-cash flows
-New finance leases
-Finance leases acquired through acquisitions
- Loans and borrowings classified as non-current at
31 October 2018 becoming current during year
ended 31 October 2019
- Loans and borrowings classified as non-current at 31
October 2017 becoming current during year ended 31
October 2018
(2,037)
2,037
-
(1,111)
1,111
3,766
3,887
7,653
2,356
2,647
5,003
As at 31 October 2019
3,078
3,686
6,764
902
2,140
3,042
83
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
Notes to the Financial Statements continued
38. IMPACT OF IFRS 9 AND IFRS 15
IFRS 9
There are two areas of impact:
Trade and other receivables and loans to joint ventures impairment provision
•
Trade debtors
Impairment provisions for trade debtors are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination
of the lifetime expected credit losses. During this process the probability of the non-payment of the trade debtors is assessed. For trade debtors,
which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses
in the statement of comprehensive income. On confirmation that the trade debtor will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
•
Receivables from related parties and joint venture loans
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit
loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit
risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the
financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased
significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired,
lifetime expected credit losses along with interest income on a net basis are recognised.
Hedge accounting
The overall objective of the Board is to set policies to reduce risk as far as possible without unduly affecting the Group’s competitiveness and
flexibility.
The Group utilises LIFFE grain derivatives as hedging instruments as fair value hedges against the open long or short positions on its forward
purchase and sales books. The Group does not have any assets held for trading and does not engage in the taking of speculative commodity
positions.
The Group’s commercial risk management strategy remains unchanged, but it has decided to adopt the IFRS 9 option that allows more items to
qualify for hedge accounting by removing the 80 – 125% highly effective threshold relationship criteria between the hedged item and the hedging
instrument set out in IAS 39 Financial Instruments: Recognition and Measurement.
IFRS 15
Revenue recognition
The implementation project concluded that the Group’s income streams, and net assets were not materially impacted by the five-stage revenue
recognition model and agent versus principal considerations.
As a manufacturer and specialist merchant, the Group earns the majority of its revenues from sales of goods rather than services, and hence
recognises revenue at a point in time, typically on delivery or at the point of shipping, rather than over time. Contracts are identified at the point an
order is placed, and the performance obligations, transaction price and the separate contract obligations are all clearly defined. There is limited
judgement needed to identify the point at which control passes – once physical delivery of the products to the agreed location has occurred, the
Group no longer has physical possession and will usually have a present right to payment as a single receipt on delivery. None of the significant risks
and rewards of the goods are retained. Within Specialist Agricultural Merchanting, some contracts provide customers with a limited right of return,
but experience has shown that the value of these returns is immaterial.
Disclosure disaggregation of revenue
The IFRS introduced a requirement to disaggregate revenue from contracts with customers into categories that depict how the nature, amount,
timing and uncertainty of revenue and cash flows are affected by economic factors, for example, by type of goods or service, by geographic region,
by customer type, timing of transfer and sales channel.
The implementation project concluded that existing segmental reporting disclosures provided under IFRS 8 Operating Segments did not require any
different or further disaggregation of revenue because they show the type of sale, all our customers are based in the UK, our customers typically buy
from both segments and are farmers, rural dwellers and small-holders, are goods-related at a point in time, and the two segments show the direct
to farm and via specialist agricultural merchanting depots / catalogues.
Overall conclusion
There were no material adjustments as a result of application of IFRS 9 or IFRS 15.
84
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019 Financial Calendar
22 January 2020
Announcement of 2019 Results
24 March 2020
Annual General Meeting
27 March 2020
Dividend Record Date
30 April 2020
Payment of Final 2019 Dividends
June 2020
Announcement of 2020 Interim Results
Shareholder Fraud Warning
Shareholders are advised that as the Company’s share register is a
public 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 illegal manner,
which is likely to increase the risk associated with doing business with
them. Please visit http://scamsmart.fca.org.uk/.
Some simple advice to avoid investment scams and share frauds
include :
1.
2.
3.
4.
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.
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.
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.
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 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 !
S
h
a
r
e
h
o
l
d
e
r
I
n
f
o
r
m
a
t
i
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n
85
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
(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 may,
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 Ordinary Shares
authorised to be purchased is 500,000 (representing
approximately 2.5% 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
Claire Williams
21 January 2020
Company Secretary
Wynnstay Group Plc
Eagle House
Llansantffraid-ym-Mechain
Powys, SY22 6AQ
Notice of Annual General Meeting
Notice is hereby given that the twenty-eighth 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 24 March 2020 at
11.45am to transact the following business:
ORDINARY BUSINESS
1.
2.
3.
4.
5.
To receive and adopt the Company’s annual accounts
for the financial year ended 31st October 2019 together
with the Directors’ Report and Auditor’s Report on those
accounts.
To declare a final dividend for the year ended 31 October
2019.
To re-appoint the following Director who retires by rotation
under Article 91:
Steve Elwood
To re-appoint the following Director who retires by rotation
under Article 91:
Paul Roberts
To re-appoint BDO LLP as auditors, to hold office from the
conclusion of the Meeting to the conclusion of the next
Meeting at which accounts are laid before the Company 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 :
6.
That, the Directors be and they are hereby generally and
unconditionally authorised for the purposes of Section 551
of the Companies Act 2006 (the “Act”) 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 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 8 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 in relation to fractional
entitlements or any legal or practical problems under
the laws of any territory, or the requirements of any
regulatory body or stock exchange; and
86
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019
Notes to Notice of Annual General Meeting
1.
Appointment of proxies
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 Company’s
Head Offi ce 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.
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 their preference to receive 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 fl exibility
in fi nancing possible business opportunities and are normal
practise for a company of this size, and are routinely put to
shareholders.
3.
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 benefi t all remaining shareholders
and are normal practise for a company of this size, and are
routinely put to shareholders.
4.
Documents on display
Copies of necessary documents will be available for at least
15 minutes prior to the Meeting and during the Meeting.
5.
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 shareholdings should be
directed to the Company’s external registrar at the following
address : Neville Registrars, Neville House, Steelpark Road,
Halesowen, West Midlands, B62 8HD. (Tel. 0121 585 1131)
ANNUAL REPORT AND ACCOUNTS 2019
ANNUAL REPORT AND ACCOUNTS 2019 Wynnstay Group Plc
87
Wynnstay Group Plc
01691 828512
www.wynnstay.co.uk
Registered in Wales and England
88
www.wynnstay.co.uk ANNUAL REPORT AND ACCOUNTS 2019