ANNUAL
REPORT
AND ACCOUNTS
2021
01
Financial Performance Highlights
Operational Highlights
Strategic Report
Growth Strategy
Key Strengths
Principle Activities and Business Model
Our Pillars
Chairman’s Statement
Business Snapshots
Chief Executive’s Review
Business Snapshots
Finance Review
Company Details and Advisors
Business Snapshot
Principal Risks and Uncertainties
S172 Statement
02 ESG Framework
Environmental Strategy and SECR Statement
Directors’ Responsibility Statement
Corporate Governance Statement
Business Snapshot
Corporate Values
Social
Board of Directors and Company Secretary
Senior Management
Business Snapshot
Directors’ Report
Directors’ Remuneration Report
Independent Auditor’s Report
Contents
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27-29
30-31
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39-41
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49-54
55-57
60-61
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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
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67-98
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. Wynnstay helps
livestock and arable farmers to produce food in a more sustainable,
environmentally friendly and profitable way. We provide our customers
with quality products, specialist advice and an efficient service that is
industry leading.
Group Revenue
£500.39m
2020: £431.40m
Underlying Pre-tax Profit*
£11.44m
2020: £8.37m
Profit before Tax
£10.99m
2020: £6.98m
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Earnings per Share
44.40 pence
2020: 27.73 pence
Shareholders’ Funds
£105.72m
2020 £98.18m
Dividend per Share
15.50 pence
2020: 14.60 pence
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Group Revenue (£m)
Underlying Pre-tax Profit*
Earnings per Share (pence)
Dividend per Share (pence)
£500.39m
£11.44m
44.40p
15.50p
*Underlying pre-tax profit 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.
1
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021‘20‘17‘18‘19‘20‘18‘19‘17‘20‘19‘17‘18‘20‘19‘17‘18‘19‘20‘17‘18‘21‘21‘21‘21‘21 Operational Highlights
Agriculture Division
Revenue up 19% to £358.96m (2020: £302.58m), operating profit contribution
up 47% to £4.22m (2020: £2.88m). Total feed volumes 6.5% ahead year-on-year.
After higher production and distribution costs operating profit was in line with prior
year. Arable activities benefited from a return to more normal harvest tonnages and
yields and a good autumn 2021 planting season. Outperformance from Glasson,
benefiting from three-fold increase in fertiliser raw material prices in H2
Specialist Agricultural Merchanting
Revenue up 10% to £141.43m (2020: £128.81m), operating profit contribution up
24% to £7.15m (2020: £5.78m). Excellent performance reflected increased farmer
confidence and a return to farm investment. Strong sales across all major product
categories, including bagged feed and hardware.
Two bolt-on acquisitions
The Group acquired two bolt-on acquisitions in Q2 2021, they have integrated well,
added new customers, and expanded our trading area.
New digital trading portal
The Group launched a new digital trading portal in November; there has been a
steady adoption from customers as expected.
Investment programmes
Investment programmes to increase manufacturing and processing capacity
progressed well.
Appointments
Non-executive and Key Senior Management appointments made, including
Commercial Sales & Marketing Director, Group Engineering Manager and
Environmental & Sustainability Manager.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Growth Strategy
Wynnstay helps livestock and arable farmers to produce food
in a more sustainable, environmentally-friendly and profitable
way. We provide our customers with quality products, specialist
advice and an efficient service that is industry leading.
OUR STRATEGIC GOAL
Acquire, retain and strengthen
our relationships with customers
OUR BUSINESS MODEL
Balanced business that gets
stronger with scale
OUR FINANCIAL GOAL
Generate strong and
reliable cash flows
EXPAND SALES
CREATE VALUE
LEAN COST BASE
OUR PROPOSITION
Trusted Experts
We have expertise across
our sectors and have been
continuing to expand our
specialist advisory teams in
dairy, egg production, beef,
sheep, animal health,
youngstock, arable, seed
and fertiliser.
Product Range
We offer an extensive
product range that will allow
our customers to farm more
sustainably, efficiently and
profitably.
Multi-Channel
We have a multi-channel
offering which includes
depots, sales specialists,
sales desk and customer
portal to ensure we are
aligned to our customers'
buying habits.
Manufacturing
We are investing to increase
our manufacturing and
processing capability for
efficiency and environmental
gains.
STRONG CASH GENERATION
INVEST FOR THE FUTURE
PEOPLE
TECHNOLOGY AND IT SYSTEMS MANUFACTURING ACQUISITIONS
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Key Strengths
Committed and Loyal Colleagues
Committed and loyal colleagues who offer technical
advice to support the prosperity of our farmer
customer base through efficiencies and new
innovations.
Strong Balance Sheet
A strong balance sheet with the capacity to support
future growth.
Balanced Business Model
A robust and balanced business model with two
complementary divisions - Agriculture and Specialist
Agricultural Merchanting.
Broad Range of Products
A broad range of agricultural products, including
innovative and sustainable products, marketed via
a multichannel sales offering.
Opportunities for Growth
Opportunities for future growth into the currently
fragmented farming and rural economy by increased
geographic reach though organic and focused
acquisitions.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Principal Activities and Business Model
Wynnstay helps livestock and arable farmers to produce food in a more sustainable, environmentally friendly and profitable way. We provide our
customers withy quality products, specialist advice and an efficient service that is industry leading.
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.
FEED
DEPOTS
CUSTOMER
GLASSON
ARABLE
AGRICULTURE
SPECIALIST
AGRICULTURAL
MERCHANTING
YOUNGS ANIMAL
FEEDS
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, the 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 54 depots across
Wales, the Midlands, North West and South West England, supplying
to farmers, smallholders and rural dwellers.
Our team is trained to help customers with technical advice and our
customers can purchase via depot, click and collect or for direct
delivery.
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,
Staffordshire, and two other locations, selling a range of equine and
small animal feeds through to wholesalers and retailers, including our
own depot network, in Wales and the Midlands. The Sweet Meadow
branded equine feed range is a market leading product.
FEED
The Group operates two multi-species compound feed mills and two
blending plants, offering 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, Montrose, and Howden, 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.
GRAINLINK
GrainLink is the Group’s in-house grain marketing company and
provides farmers with an independent professional marketing service
backed by the financial security of the Wynnstay Group. The Company
has access to major markets for specialist milling and malting grain as
well as feed into mills. GrainLink operates from offices in Shropshire
and Yorkshire.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Our Pillars
Wynnstay has a clearly defined growth strategy, with key areas of focus
EXPERT
GUIDANCE
ORGANIC
GROWTH
ACQUISITIONS
The quality of our
advice enables us to
stand-out and create
deeper relationships
with customers. We
have strong teams
of specialists who
assist customers
in identifying areas
to improve their
business so that they
can produce food
profitably, efficiently,
sustainably and in
an environmentally
beneficial way.
There are very good
opportunities for us to
increase our market
share across all our
key areas of operation
and to expand
our manufacturing
capability. As we
increase our share of
the market, we intend
to continue to maintain
our wide offering of
products and services
for livestock, arable
and mixed farms. This
balanced approach
smooths sector
volatility.
Acquisitions have
played an important
role in Wynnstay’s
development to
date, and remain an
important element of
our growth strategy
alongside organic
expansion. We look
for acquisitions that
complement our
existing areas of
operation and will add
value.
MULTI-CHANNEL
VISION
Technology offers new
ways of selling our
products and services
and enhancing our
customer proposition.
We are investing
to take advantage
of these new
opportunities and
align ourselves with
the shift in customers’
buying habits and
engagement.
ESG
Helping farmers to
feed the country in a
more sustainable way
is our fundamental
goal. It has the
power to transform
lives for the better.
We are proud to be
pursuing this aim
and, alongside this,
to uphold high ESG
values.
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TWIN-TRACKED GROWTH
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.
The Group’s strategy focuses on developing these twin strands of acquisitive and organic growth as follows:
ACQUISITION
ORGANIC GROWTH
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Chairman’s Statement
OVERVIEW
I am delighted to report record results in my first annual statement
since becoming Chairman in March 2021. Underlying pre-tax profit*
as defined in the Finance Review, increased by 37% to set a new
high of £11.44m (2020: £8.37m) and revenues increased by 16% to
£500.39m (2020: £431.40m), also a record high. Both these results
were significantly ahead of initial market expectations. Basic earnings
per share, including non-recurring items, rose by 60% to a record
44.40p (2020: 27.73p).
The Group’s very strong performance benefitted from a substantial
rise in farmer confidence as farmgate prices strengthened and the
uncertainty surrounding Brexit and future Government support for
agriculture lifted. The Group’s balanced business model came to
the fore once again, ensuring that we were not over-exposed to the
variations of any individual sector.
The year also demonstrated the resilience and commitment of Wynnstay
staff, who continued to provide an outstanding and uninterrupted
service to our customers despite the additional challenges created by
the coronavirus pandemic.
Both the Agriculture Division and Specialist Agricultural Merchanting
Division benefited from the significant improvement in the trading
environment as well as the actions we have taken to improve
productivity and efficiencies.
Within the Agriculture Division, feed volumes were higher year-on-year,
although margins were affected by increased costs. The return to
more normal harvest tonnages and yields – against last year’s historic
lows - buoyed arable activities in the second half of the financial year,
especially grain trading. Autumn planting was also strong, benefiting
seed sales. Fertiliser blending at Glasson, the UK’s second largest
fertilizer blending operator, experienced a significant one-off benefit
from the three-fold increase in selling prices towards the end of the
financial year. The latter reflected significant increases in the world
price of natural gas, which is used in the production of ammonium
nitrate fertiliser.
The Specialist Agricultural Merchanting Division, which includes our
depot network and Youngs Animal Feeds, performed exceptionally
well, helped by strong sales across all major categories, including
Wynnstay-branded bagged feed and hardware. We continued to
review and invest in the depot network, making adaptations so that
it remains an efficient sales channel. At the same time, we continued
to develop our digital presence, having launched our new customer
portal in the first half of the financial year. This is part of our multi-
channel sales approach, and while digital sales remain modest, as
pre-launch research suggested, we will continue to enhance digital
engagement with the customer base.
It is also pleasing to report that our joint venture businesses and
associate company performed well, contributing well ahead of our
expectations. The two bolt-on acquisitions we made in the second
quarter of the financial year have integrated extremely well, and
strategically we have benefited from the addition of new trading
7
www.wynnstayplc.co.uk
I am delighted to
report record results
in my first annual
statement since
becoming Chairman
areas, an increase in the customer base, and the addition of staff with
expertise and local knowledge.
GROWTH STRATEGY
Wynnstay’s growth plans focus on organic growth, acquisitions,
expert advice, multi-channel engagement and ESG. At the forefront
of the Board’s thinking is our customer base of arable and livestock
farmers and our desire to ensure that the Group continues to provides
them with valued expertise and advice, a wide range of products
and services that cater for their changing needs, and an overall high-
level of customer service. Ultimately, our aim is to enable farmers to
grow food in a manner that is profitable, efficient, sustainable and
environmentally-enhancing.
Over the financial year, we made good progress across a number of
areas of our growth strategy. I am very pleased to highlight that we
have:
• continued to expand our specialist advisory teams;
•
•
incrementally expanded our volumes in key feed markets,
including dairy and free range egg production;
increased seed volumes, including expanding the range of our
environmental seed offering;
• progressed investment to increase our feed manufacturing
capacity and laid the groundwork for a planned two-year
programme to scale our seed processing activities;
• completed
two complementary bolt-on acquisitions
(the
agricultural division of the Armstrong Richardson Group, which
supplies inputs to farmers in the North East of England, and
the fertiliser manufacturing business and assets of HELM Great
Britain Limited, based in South Yorkshire);
•
•
launched a new digital platform, which supports our multi-channel
goals; and
further developed our ESG strategy. This focuses on both our own
internal carbon reductions initiatives, and on how we can support
our farming customers with their environmental objectives.
FINANCIAL RESULTS
Group revenue increased by 16% to £500.39m (2020: £431.40m), with
the increase reflecting increased volumes, an eight-month contribution
from our two acquisitions, and significant commodity inflation.
Underlying Group pre-tax profit rose by 37% to a record £11.44m
(2020: £8.37m). Underlying Group pre-tax profit is the Board’s
alternative performance measure, and includes the gross share of
results from joint ventures and excludes share-based payments and
non-recurring items. Reported pre-tax profit increased to £10.99m
(2020: £6.98m after £1.2m of non-recurring items). Basic earnings per
share increased by 60% to 44.40p (2020: 27.73p).
Both Divisions contributed double digit growth, with a 19% uplift in
* Underlying pre-tax profit is a non-GAAP 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 page 21 in the Finance Review for a reconciliation on the calculation of
this measure and the reasons for its use.
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revenues from the Agriculture Division to £358.96m (2020: £302.58m),
and a 10% revenue increase from the Specialist Agricultural
Merchanting Division to £141.43m (2020: £128.81m). The operating
profit contribution from the Agriculture Division was £4.22m (2020:
£2.88m), a rise of 46% year-on-year, with the Specialist Agricultural
Merchanting Division increasing its contribution by 24% to £7.15m
(2020: £5.78m).
The Group generates good operational cash flows although, this year,
cash generated from operations was affected by commodity inflation,
and amounted to £10.55m (2020: £19.83m). Net cash at the financial
year-end increased by 10% to £9.24m (31 October 2020: £8.42m).
October typically represents the highest point of net cash in the
Group’s annual working capital cycle.
During the year, 89,687 new ordinary shares (2020: 155,035) were
issued for a total equivalent cash amount of £0.439m (2020: £0.392m)
to existing shareholders exercising their right to receive dividends in the
form of new shares. A further 158,138 shares were issued for a total
cash consideration of £0.586m (2020: nil) to employees exercising
rights over approved share options.
Group net assets at the financial year end increased by 8% to
£105.72m (31 October 2020: £98.18m), a record high. Based on the
weighted average number of shares in issue during the financial year
of 20.120m (2020: 19.952m), this equates to a £5.25 per share (2020:
£4.92). Return on net assets from underlying pre-tax profits increased
to 10.8% (2020: 8.6%).
Capital investment in fixed assets including right of use assets in
the financial year rose to £5.85m (2020: £4.01m), and net working
capital at the financial year end increased by 24% to £46.81m (31
October 2020: £37.89m). The increase reflected both the growth and
commodity price inflation.
During the financial year, the share price traded in a range between a
low of £2.85 in November 2020 and a high of £5.92 in August 2021.
DIVIDEND
The Board is pleased to propose an increased final dividend of
10.50p per share to be paid on 29 April 2022 (2020: 10p per share)
to shareholders on the register as at 1 April 2022. Together with the
interim dividend of 5.00p per share, paid on the 29 October 2021, this
makes a total dividend of 15.50p per share for the year (2020: 14.60p),
an increase of 6%. The final dividend is subject to shareholder approval
at the forthcoming AGM on 22 March 2022.
we appointed Paul Jackson as Commercial Sales & Marketing Director
and Steve Reading as Group Engineering Manager. Lewis Davies, who
has been involved in the creation of our ESG strategy also assumed
the role of Environmental and Sustainability Manager. These new roles
support our long-term growth plans.
At the AGM in March 2021, Jim McCarthy stepped down as Chairman
to become a Non-executive Director, subsequently retiring from the
Board and Group in July 2021 after ensuring a smooth handover.
On behalf of everyone at Wynnstay, I would like to thank him for his
tremendous service to the Group over 10 years, the last eight years
as Chairman. His insights and counsel have contributed significantly
to Wynnstay’s development, and we wish him well in his retirement.
On 1 July 2021, we were very pleased to appoint Catherine Bradshaw
as a Non-executive Director. She has also assumed the role of
Chairman of the Audit and Risk Committee. Catherine has over 20
years’ experience in financial and general management roles, and
is Group Financial Controller of Greencore Group plc, a leading UK
manufacturer of convenience food, having joined the FTSE 250 listed
business in 2015. Prior to this, she worked in senior financial positions
at Wm Morrison Supermarkets plc and Northern Foods plc, the food
manufacturer. She further strengthens the Board with her knowledge
and experience, and we are delighted to welcome her to the Group.
OUTLOOK
The UK agricultural sector is emerging from a prolonged period of
uncertainty created by Brexit. However, farmer sentiment has greatly
improved and the sector has returned to investment, with the landmark
UK Agriculture Act providing clarity over future financial support
to farmers. Whilst there is a significant level of general economic
uncertainty and rising costs, with farmgate prices remaining strong,
prospects for the industry continue to be very encouraging.
In the near term, there are challenges for our business, with cost
inflation, security of supply of overseas product and the coronavirus
situation receiving our full attention. Nonetheless, we believe that
Wynnstay is well-positioned to continue its long-term growth and
development. We have a clear strategy for growth, balanced business
model, and strong financial underpinning, with a robust balance sheet
and good cash flows. There is also an important role for us to play in
supporting our farmer customers as they begin to adjust their farming
practises in the light of the new Agriculture Act, which aims to boost
productivity and reward environmental improvements in the farming
sector.
We are proud to note that the total dividend represents the eighteenth
consecutive year of dividend growth since Wynnstay joined AIM in
2004.
Trading in the new financial year has started well, and we view the year
ahead with confidence and expect the Group to deliver its ongoing
growth objectives.
BOARD AND COLLEAGUES
The Board would like to acknowledge the dedication and hard work
of the Wynnstay Team over the year. Working under the additional
challenges created by the coronavirus pandemic, our staff have
continued to provide our customers with an exemplary service, and
on behalf of the Board I would like to thank everyone for their vital
contribution to these excellent results.
We were delighted to welcome new staff to the team. Over the year
Steve Ellwood
Chairman
1 February 2022
Prospects for the industry continue to
be very encouraging. Wynnstay is well-
positioned to continue its long-term growth
and development.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Datganiad y Cadeiryd
TROSOLWG
Mae’n bleser gennyf adrodd y canlyniadau uchaf erioed yn fy natganiad
blynyddol cyntaf ers dod yn Gadeirydd ym mis Mawrth 2021.
Cynyddodd elw cyn treth* sylfaenol 37% i osod uchafbwynt newydd
o £11.44m (2020: £8.37m) a chynyddodd refeniw o 16% i £500.39m
(2020: £431.40m), sydd hefyd yn gosod record newydd. Roedd
y ddau ganlyniad hyn gryn dipyn yn well o gymharu â disgwyliadau
cychwynnol y farchnad. Cododd enillion sylfaenol fesul cyfranddaliad,
gan gynnwys eitemau anghylchol, 60% i’r lefel uchaf erioed, sef 44.40c
(2020: 27.73c).
Roedd perfformiad cryf iawn y Grŵp wedi elwa ar gynnydd sylweddol yn
hyder ffermwyr wrth i brisiau gât y fferm gryfhau, ac wrth i’r ansicrwydd
ynghylch Brexit a chefnogaeth y Llywodraeth i amaethyddiaeth yn y
dyfodol godi. Daeth model busnes cytbwys y Grŵp i’r amlwg unwaith
eto, gan sicrhau nad oeddem yn rhy agored i amrywiadau unrhyw
sector unigol.
Yn ogystal, arddangosodd staff Wynnstay wytnwch ac ymrwymiad yn
ystod y flwyddyn, gan barhau i ddarparu gwasanaeth rhagorol a di-
dor i’n cwsmeriaid, er gwaethaf yr heriau ychwanegol a grëwyd gan y
pandemig Coronafeirws.
Is-adran Amaethyddiaeth a’r
Elwodd yr
Is-adran Masnachu
Amaethyddol Arbenigol ill dau o’r gwelliant sylweddol yn yr amgylchedd
masnachu, yn ogystal â’r camau yr ydym wedi’u cymryd i wella
cynhyrchiant ac effeithlonrwydd.
O fewn yr Is-adran Amaethyddiaeth, roedd cyfeintiau porthiant yn
uwch, flwyddyn ar ôl blwyddyn, er bod costau uwch yn effeithio ar
elw. Bu’r dychweliad i dunelli a chynnyrch cynhaeaf mwy arferol - yn
erbyn isafbwyntiau hanesyddol y llynedd - yn hwb i weithgareddau
âr yn ail hanner y flwyddyn ariannol, yn enwedig masnachu grawn.
Roedd plannu’r hydref hefyd yn gryf, gan fod o fudd i werthiant hadau.
Profodd cymysgu gwrtaith yn Glasson, sef ail weithredwr cymysgu
gwrtaith mwyaf y DU, fantais untro sylweddol o’r cynnydd triphlyg
mewn prisiau gwerthu tuag at ddiwedd y flwyddyn ariannol. Roedd
yr olaf yn adlewyrchu cynnydd sylweddol ym mhris rhyngwladol nwy
naturiol, a ddefnyddir i gynhyrchu gwrtaith amoniwm nitrad.
Perfformiodd yr Is-adran Masnachu Amaethyddol Arbenigol, sy’n
cynnwys ein rhwydwaith depos a Youngs Animal Feeds, yn arbennig
o dda, gyda chymorth gwerthiant cryf ar draws yr holl brif gategorïau,
gan gynnwys porthiant a nwyddau mewn bagiau wedi’u brandio
gan Wynnstay. Fe wnaethom barhau i adolygu a buddsoddi yn
y rhwydwaith depos, gan wneud addasiadau fel ei fod yn parhau i
fod yn sianel werthu effeithlon. Ar yr un pryd, fe wnaethom barhau i
ddatblygu ein presenoldeb digidol, ar ôl lansio ein porth cwsmeriaid
newydd yn hanner cyntaf y flwyddyn ariannol. Mae hyn yn rhan o’n dull
gwerthu aml-sianel, ac er bod gwerthiannau digidol yn parhau i fod
yn gymedrol, fel yr awgrymodd y gwaith ymchwil cyn lansio, byddwn
yn parhau i wella ein hymgysylltiadau digidol â’n sylfaen cwsmeriaid.
Mae hefyd yn bleser adrodd bod ein mentrau ar y cyd, a’n cwmni
cyswllt, wedi perfformio’n dda, gan gyfrannu llawer mwy na’n
disgwyliadau. Mae’r ddau gaffaeliad atodol hyn, a wnaethom yn ail
chwarter y flwyddyn ariannol, wedi integreiddio’n eithriadol o dda
9
Mae’n bleser gennyf
adrodd y canlyniadau
uchaf erioed yn fy
natganiad blynyddol
cyntaf ers dod yn
Gadeirydd
ac, yn strategol, rydym wedi elwa o ychwanegu meysydd masnachu
newydd, cynnydd o ran ein sylfaen cwsmeriaid, ac ychwanegu staff ag
arbenigedd a gwybodaeth leol.
STRATEGAETH TWF
Mae cynlluniau twf Wynnstay yn canolbwyntio ar dwf organig,
caffaeliadau, cyngor arbenigol, ymgysylltu aml-sianel ac ESG. Ar
flaen meddylfryd y Bwrdd mae ein sylfaen cwsmeriaid o ffermwyr âr
a da byw, a’n dymuniad i sicrhau bod y Grŵp yn parhau i ddarparu
arbenigedd a chyngor gwerthfawr iddynt, ystod eang o gynhyrchion
a gwasanaethau sy’n darparu ar gyfer eu hanghenion newidiol, a
lefel uchel o wasanaeth cwsmeriaid yn gyffredinol. Yn y pen draw, ein
nod yw galluogi ffermwyr i dyfu bwyd mewn modd sy’n broffidiol, yn
effeithlon, yn gynaliadwy ac sy’n gwella’r amgylchedd.
Dros y flwyddyn ariannol, gwnaethom gynnydd da ar draws nifer o
feysydd ein strategaeth twf. Rwy’n falch iawn o dynnu sylw at y ffaith
ein bod wedi:
• Parhau i ehangu ein tîm ymgynghori arbenigol;
• Cynyddu ein cyfeintiau mewn marchnadoedd porthiant allweddol
yn raddol, gan gynnwys cynhyrchu llaeth ac wyau maes;
• Cynyddu cyfeintiau hadau, gan gynnwys ehangu ystod ein harlwy
hadau amgylcheddol;
• Symud buddsoddiad ymlaen o ran cynyddu ein gallu i gynhyrchu
bwyd anifeiliaid a chwblhau cam cynllunio cychwynnol ein rhaglen
dwy flynedd er mwyn cynyddu graddfa ein gweithgareddau
prosesu hadau;
• Cwblhau dau gaffaeliad atodol cyflenwol (adran amaethyddol Grŵp
Armstrong Richardson, sy’n cyflenwi mewnbynnau i ffermwyr yng
Ngogledd-ddwyrain Lloegr, a busnes gweithgynhyrchu gwrtaith
ac asedau HELM Great Britain Limited, sydd wedi’i leoli yn Ne
Swydd Efrog);
• Lansio llwyfan digidol newydd, sy’n cefnogi ein nodau aml-sianel;
a
• Datblygu ein strategaeth ESG ymhellach. Mae hwn yn
canolbwyntio ar ein mentrau lleihau carbon mewnol ein hunain, ac
ar sut y gallwn gefnogi ein cwsmeriaid ffermio gyda’u hamcanion
amgylcheddol.
CANLYNIADAU ARIANNOL
Cynyddodd refeniw’r grŵp 16% i £500.39m (2020: £431.40m), gyda’r
cynnydd yn adlewyrchu cyfeintiau uwch, cyfraniad wyth mis o’n dau
gaffaeliad, a chwyddiant nwyddau sylweddol.
Cododd elw cyn treth sylfaenol y Grŵp 37% i’r lefel uchaf erioed o
£11.44m (2020: £8.37m). Elw cyn treth sylfaenol y Grŵp yw mesur
perfformiad amgen y Bwrdd, ac mae’n cynnwys y gyfran grynswth
o ganlyniadau o fentrau ar y cyd ac nid yw’n cynnwys taliadau ar
sail cyfranddaliadau ac eitemau anghylchol. Cynyddodd yr elw cyn
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treth a adroddwyd i £10.99m (2020: £6.98m ar ôl £1.2m o eitemau
anghylchol). Cynyddodd enillion sylfaenol fesul cyfran 60% i 44.40c
(2020: 27.73c).
Cyfrannodd y ddwy Is-adran dwf digid dwbl, gyda chynnydd o 19%
mewn refeniw gan yr Is-adran Amaethyddiaeth i £358.96m (2020:
£302.58m), a chynnydd refeniw o 10% gan yr Is-adran Masnachu
Amaethyddol Arbenigol i £141.43m (2020: £ 128.81m). Y cyfraniad
elw gweithredol gan yr Is-adran Amaethyddiaeth oedd £4.22m (2020:
£2.88m), cynnydd o 46% flwyddyn ar ôl blwyddyn, gyda’r Is-adran
Masnachu Amaethyddol Arbenigol yn cynyddu ei chyfraniad 24% i
£7.15m (2020: £5.78 m).
Mae’r Grŵp yn cynhyrchu llifau arian gweithredol da er, eleni, effeithiwyd
ar yr arian parod a gynhyrchwyd o weithrediadau gan chwyddiant
nwyddau, a’i gyfanswm oedd £11.12m (2020: £20.35m). Cynyddodd
arian parod net ar ddiwedd y flwyddyn ariannol 10% i £9.24m (31
Hydref 2020: £8.42m). Mae mis Hydref fel arfer yn cynrychioli’r pwynt
uchaf o arian parod net yng nghylch cyfalaf gweithio blynyddol y Grŵp.
Yn ystod y flwyddyn, cyhoeddwyd 89,687 o gyfranddaliadau cyffredin
newydd (2020: 155,035) am gyfanswm arian parod cyfatebol o
£0.439m (2020: £0.392m) i gyfranddalwyr presennol sy’n arfer eu
hawl i dderbyn difidendau ar ffurf cyfranddaliadau newydd. Rhoddwyd
158,138 o gyfranddaliadau pellach am gyfanswm cydnabyddiaeth
arian parod o £0.586m (2020: dim) i weithwyr sy’n arfer eu hawl i
dderbyn opsiynau cyfranddaliadau cymeradwy.
Cynyddodd asedau net y Grŵp ar ddiwedd y flwyddyn ariannol 8%
i £105.72m (31 Hydref 2020: £98.18m), sy’n uwch nag erioed. Yn
seiliedig ar nifer cyfartalog pwysol y cyfranddaliadau a gyhoeddwyd
yn ystod y flwyddyn ariannol o 20.120m (2020: 19.952m), mae hyn
yn cyfateb i £5.25 y cyfranddaliad (2020: £4.92). Cynyddodd yr elw ar
asedau net o elw cyn treth sylfaenol i 10.8% (2020: 8.6%).
Cododd buddsoddiad cyfalaf mewn asedau sefydlog, gan gynnwys
asedau hawl i ddefnyddio, yn y flwyddyn ariannol i £5.85m (2020:
£4.01m), a chynyddodd cyfalaf gweithio net ar ddiwedd y flwyddyn
ariannol 24% i £46.81m (31 Hydref 2020: £ 37.89m). Roedd y cynnydd
yn adlewyrchu twf a chwyddiant prisiau nwyddau.
Yn ystod y flwyddyn ariannol, roedd pris y cyfranddaliadau’n masnachu
mewn ystod rhwng yr isafbwynt o £2.85 ym mis Tachwedd 2020 a’r
uchafbwynt o £5.92 ym mis Awst 2021.
DIFIDEND
Mae’r Bwrdd yn falch o gynnig difidend terfynol uwch o 10.50c y
cyfranddaliad i’w dalu ar 29 Ebrill 2022 (2020: 10c y cyfranddaliad) i
gyfranddalwyr sydd ar y gofrestr ar 1 Ebrill 2022. Ynghyd â’r difidend
interim o 5.00c y cyfranddaliad, a dalwyd ar 29 Hydref 2021, mae
hyn yn gwneud cyfanswm difidend o 15.50c y cyfranddaliad ar gyfer
y flwyddyn (2020: 14.60c), sef cynnydd o 6%. Mae’r difidend terfynol
yn amodol ar gymeradwyaeth cyfranddalwyr yn y Cyfarfod Cyffredinol
Blynyddol sydd i ddod ar 22 Mawrth 2022.
Rydym yn falch o nodi bod cyfanswm y difidend yn cynrychioli’r
ddeunawfed flwyddyn yn olynol o dwf difidend ers i Wynnstay ymuno
ag AIM yn 2004.
gwasanaeth rhagorol i’n cwsmeriaid, ac ar ran y Bwrdd hoffwn ddiolch
i bawb am eu cyfraniad hanfodol i’r canlyniadau rhagorol hyn.
Roedd yn bleser gennym groesawu aelodau staff newydd i’r tîm.
Yn ystod y flwyddyn, penodwyd Paul Jackson yn Gyfarwyddwr
Gwerthiant a Marchnata Masnachol a Steve Reading yn Rheolwr Grŵp
Peirianneg. Mae Lewis Davies, sydd wedi bod yn ymwneud â chreu
ein strategaeth ESG hefyd wedi cymryd rôl y Rheolwr Amgylcheddol
a Chynaliadwyedd. Mae’r rolau newydd hyn yn cefnogi ein cynlluniau
twf hirdymor.
Yn y Cyfarfod Cyffredinol Blynyddol ym mis Mawrth 2021,
ymddiswyddodd Jim McCarthy fel Cadeirydd i ddod yn Gyfarwyddwr
Anweithredol, gan ymddeol o’r Bwrdd a’r Grŵp ym mis Gorffennaf
2021, ar ôl sicrhau trosglwyddiad llyfn. Ar ran pawb yn Wynnstay, hoffwn
ddiolch iddo am ei wasanaeth aruthrol i’r Grŵp dros 10 mlynedd, yr
wyth mlynedd diwethaf fel Cadeirydd. Mae ei fewnwelediad a’i gyngor
wedi cyfrannu’n sylweddol at ddatblygiad Wynnstay, a dymunwn yn
dda iddo yn ei ymddeoliad.
Ar 1 Gorffennaf 2021, roeddem yn falch iawn o benodi Catherine
Bradshaw yn Gyfarwyddwr Anweithredol. Mae hi hefyd wedi ymgymryd
â rôl Cadeirydd y Pwyllgor Archwilio a Risg. Mae gan Catherine dros
20 mlynedd o brofiad mewn rolau rheoli ariannol a chyffredinol, a hi
yw Rheolwr Ariannol Grŵp Greencore ccc, un o brif gynhyrchwyr
bwyd cyfleus y DU, ar ôl ymuno â’r busnes, sydd wedi’i restru ar y
FTSE 250, yn 2015. Cyn hynny, bu’n gweithio fel uwch reolwr ym
maes cyllid gyda WM Morrison Supermarkets ccc a Northern Foods
ccc, y gwneuthurwr bwyd. Mae’n cryfhau’r Bwrdd ymhellach gyda’i
gwybodaeth a’i phrofiad, ac rydym yn falch iawn o’i chroesawu i’r
Grŵp.
RHAGOLYGON
Mae sector amaethyddol y DU yn adfywio ar ôl cyfnod hir o ansicrwydd
a grëwyd gan Brexit. Fodd bynnag, mae teimladau ffermwyr wedi
gwella’n fawr ac mae’r sector wedi dychwelyd at fuddsoddi, gyda
Deddf Amaethyddiaeth y DU yn rhoi eglurder ynghylch cymorth
ariannol i ffermwyr yn y dyfodol. Er bod lefel sylweddol o ansicrwydd
economaidd cyffredinol a chostau cynyddol, gyda phrisiau gât y fferm
yn parhau’n gryf, mae’r rhagolygon ar gyfer y diwydiant yn parhau i fod
yn galonogol iawn.
Yn y tymor agos, mae heriau i’n busnes, gyda chwyddiant costau,
sicrwydd cyflenwad cynnyrch tramor a sefyllfa’r Coronafeirws yn cael
ein sylw llawn. Serch hynny, credwn fod Wynnstay mewn sefyllfa
dda i barhau gyda’i dwf a’i ddatblygiad hirdymor. Mae gennym
strategaeth glir ar gyfer twf, model busnes cytbwys, a sylfaen ariannol
gref, gyda mantolen gadarn a llif arian da. Yn ogystal, mae yna rôl
bwysig i ni ei chwarae wrth gefnogi ein cwsmeriaid sy’n ffermwyr
wrth iddynt ddechrau addasu eu harferion ffermio yng ngoleuni’r
Ddeddf Amaethyddiaeth newydd, sydd â’r nod o hybu cynhyrchiant a
gwobrwyo gwelliannau amgylcheddol yn y sector ffermio.
Mae masnachu yn y flwyddyn ariannol newydd wedi dechrau’n dda, ac
rydym yn edrych ar y flwyddyn sydd i ddod yn hyderus ac yn disgwyl i’r
Grŵp gyflawni ei amcanion twf parhaus.
Y BWRDD A CHYDWEITHWYR
Hoffai’r Bwrdd gydnabod ymroddiad a gwaith caled Tîm Wynnstay
dros y flwyddyn. Gan weithio o dan yr heriau ychwanegol a grëwyd
gan y pandemig Coronafeirws, mae ein staff wedi parhau i ddarparu
Steve Ellwood
Cadeirydd
1 Chwefror 2022
Mae’r rhagolygon ar gyfer y diwydiant yn parhau i
fod yn galonogol iawn. Mae Wynnstay mewn sefyllfa
dda i barhau gyda’i dwf a’i ddatblygiad hirdymor
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BUSINESS SNAPSHOT -
Expansion in the East
As part of our ongoing expansion
programme, we announced the acquisition
of two complementary bolt-on businesses
in the eastern side of the UK during 2021.
wholesales blended fertiliser and increases
the Group’s
fertiliser manufacturing
capacity and provides the opportunity for
further sales expansion in the area.
The
two acquisitions extended our
geographic reach and strengthened our
specialist teams in the region.
We
the
acquired AR Agriculture,
agricultural division of the Armstrong
Richardson Group, who supply a wide
range of agricultural
including
seed, fertiliser and feed along with grain
trading services to arable farmers in the
North East of England.
inputs
Glasson Grain Ltd also acquired the
fertiliser manufacturing business of HELM
Great Britain, based in the port of Howden
near Goole. The business produces and
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 BUSINESS SNAPSHOT -
Glasson Grain
Glasson Grain Ltd is based at the port of
Glasson Dock, near Lancaster and was
acquired by the Wynnstay Group in 2006.
The company was originally founded in
1979 as a trader and importer of animal
feed commodities, and has since grown
to be active across a much broader
field. Today, Glasson operates across
three main areas - the supply of feed raw
materials, the production of fertiliser and
the manufacture of specialist added value
animal feed products.
The cornmill at Glasson produces a wide
range of animal feeds for the farm, equine,
poultry and wild bird markets, these added
value products are sold through a variety
of agricultural merchants.
Glasson specialise in the supply of raw
feed
materials
blenders and merchant businesses
throughout the UK.
to compounders and
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Glasson Grain Limited are the second
largest blender of fertiliser in the UK,
operating
from sites at Montrose,
Goole, Winmarleigh, Birkenhead, and
most recently at the Port of Howden
following the acquisition of the fertiliser
manufacturing business of HELM Great
Britain in 2021.
Glasson complements the Group strategy
by providing a further diversification to the
Group’s balanced business model.
ANNUAL REPORT AND ACCOUNTS 2020 Wynnstay Group Plc
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Chief Executive’s Review
The Group’s results
are at record levels
and are significantly
ahead of our original
expectations
INTRODUCTION
The Group’s results are at record levels and are significantly ahead
of our original expectations. Strong farmgate prices and improved
farmer sentiment helped to support these excellent results as well
as the initiatives we have taken to strengthen the business and our
continuing strong focus on advice and customer service. The breadth
of the Group’s agricultural activities across the arable and livestock
sectors also continued to provide a strong underpinning to the Group’s
performance, balancing sector variations.
The Group managed the challenges created by the ongoing coronavirus
pandemic well. These included supply chain and labour disruptions.
We have also managed inflationary pressures, which caused certain
operational costs to increase.
The Agriculture Division experienced a strong second half with arable
operations benefiting from a more normal harvest compared to the
exceptionally poor harvest in 2020, when yields and tonnage declined
to a 39-year low. Grain trading volumes and autumn seed sales in the
second half were both strong. Fertiliser blending activities at Glasson
greatly outperformed expectations, experiencing a one-off boost
from existing stock after sharp price increases towards the end of the
second half, which arose from the global price rise in natural gas, a key
fertiliser ingredient.
Feed sales were higher year-on-year and ahead of the national trend.
We increased sales in dairy and free-range poultry feed, two markets
that we are particularly targeting. Higher production and distribution
costs, however, squeezed overall feed margins. The Group’s on-farm
feed specialists continue to provide customers with advice on best
feed usage.
The Specialist Agricultural Merchanting Division performed
exceptionally well, with higher sales and a significant increase in
profits against last year. There was strong demand across all major
categories, including Wynnstay-produced bagged feed, hardware,
animal health and milk replacers.
Our joint venture businesses, especially Bibby Agriculture Limited and
WYRO Developments Limited, also delivered a performance above our
expectations.
The two bolt-on acquisitions acquired respectively in February and
March 2021 integrated well, and contributed to the strength of these
results. Both have extended our geographical trading area in the
eastern side of England.
Our new digital trading portal, launched in the first half of the financial
year, is seeing further steady adoption by customers, and we are also
providing advice via regular podcasts, featuring both guest specialists
and Wynnstay experts.
We continue to invest in our sites, operations and staff. In addition
to our ongoing investment to increase the Group’s seed processing
capacity and update the seed plant at Astley with new technologies,
we are now well-advanced in the planning stages of our investment
programme to increase our manufacturing capacity at Carmarthen Mill.
ESG factors constitute an important pillar of the Company’s growth
strategy. Following the appointment of our Environmental and
Sustainability Manager in February 2021, we have commenced a
number of new initiatives to reduce the Group’s carbon emissions.
We are also continuing to expand the range of products and services
that will support the transition farmers are making under the new
Agriculture Act, which links financial support to environmental priorities.
We see the Group playing an important role in supporting farmers as
they transition to the new Environmental Land Management Scheme
(“ELMS”).
The Agriculture Division experienced a strong
second half with arable operations benefiting
from a more normal harvest compared to the
exceptionally poor harvest in 2020
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REVIEW OF ACTIVITIES
Agriculture Division
The Agriculture Division manufactures and processes feed, fertiliser
and seed in addition to selling a comprehensive range of agricultural
inputs that cater for the needs of livestock and arable farmers. Our
teams of specialist advisors help our farmer customers to produce
food in a more sustainable, environmentally friendly and profitable way.
Glasson Grain Limited and GrainLink, the Group’s crop marketing
business, are also reported within this Division.
Total revenue within the Division rose by 19% to £358.96m (2020:
£302.58m) and operating profit increased by 47% to £4.22m (2020:
£2.88m).
Feed Products
Feed activities encompass feed for dairy, beef, sheep and free range
egg producers. This wide offering provides an internal hedge against
sector variations. In addition, we sell feed raw materials, liquid feeds
and feed supplements. Feed is manufactured both in bulk form, which
is delivered direct to farm, and bagged form. In bagged form, it is
predominantly marketed under our well-known ‘Wynnstay’ brand and
sold through our depot network.
Total feed volumes were 6.5% above the previous year and higher
than the national trend. However, operating profit was affected by
higher manufacturing, distribution and raw material costs and was in
line with the previous year. Pleasingly, we increased volumes within the
dairy and poultry sectors, both key growth areas for us, and expanded
sheep feed volumes. Our team of Youngstock advisors have further
enhanced our position as market leader in the milk replacer sector.
With sustainable agriculture embedded in our strategy, we introduced a
range of climate-friendly feed diets during the year. These incorporate
sustainably-produced raw materials, including soya and palm kernel.
We plan to launch a range of ruminant diets that will include a feed
ingredient that reduces methane emissions and is endorsed by the
Carbon Trust. We expect demand for our climate-friendly rations to
grow strongly. Our on-farm advisors are also working with customers
to help them deliver their desired environmental objectives. Our bagged
feed is now packaged within plastic bags that contain a minimum of
30% recyclable plastic, and we continue to work with our suppliers to
increase this proportion further.
We continued to focus on improving our feed manufacturing efficiencies.
We achieved record production at our factory at Llansantffraid, and
will be accelerating our investment programme at our feed mill at
Carmarthen during the coming year.
We expect feed demand throughout the winter months to remain
strong as fodder, although in abundant supply, is of varying quality. In
addition, agricultural commodity prices remain high, with milk prices
likely to increase further, which will support feed demand. However,
we also expect margins to come under pressure, reflecting the very
volatile raw material market and higher energy, fuel and labour costs.
Arable Products
Our arable operations supply a wide range of services and products to
arable and grassland farmers. These include seeds, fertilisers and agro
-chemicals, as well as grain marketing services.
After a difficult first half, which reflected the exceptionally poor planting
season and poor harvest in 2020, arable operations delivered a strong
second half performance.
Grain trading performance for the year as a whole was better than the
prior year, with improved margins. While, as previously stated, this is
against a poor comparative, the financial contribution from this activity
was ahead of our expectations.
Sales of both cereal and grass seed were strong in the second half,
after weaker first half sales. Grass seed sales for the year were higher
than the previous year, including the contribution from our acquisition.
This was a pleasing result and like-for-like sales although slightly
down on the prior year, performed better than national sales, which
decreased by 10% year-on-year.
In line with our environmental strategy, we continued to extend our
environmental seed offerings and, in March 2021, also appointed
an Environmental Seed Specialist. Our objective is to offer arable
farmers sustainable, environmentally-friendly seed mixtures, which
include pollinators and deep-rooted herbs. We started planning for our
two-year investment programme at our seed plant in Astley. We are
assessing our processing options within the East of England, and in
the meantime, continue to work with partners to process cereal seed
in the region.
Fertiliser sales within Wynnstay Agricultural Supplies Limited decreased
by 7% year-on-year. This reflected three main factors; reduced demand
as a result of adverse growing conditions in the spring, the good grass-
growing summer, and the dramatic rise in fertiliser prices, which tripled
towards the end of the financial year. Fertiliser prices rose significantly
as a result of the sharp increase in the price of natural gas, which is
used to produce ammonium nitrate, the key ingredient of high-nitrogen
fertiliser.
Farmers within Wales are now preparing to comply with nitrate pollution
prevention legislation, which aims to reduce losses of nitrogen from
agriculture to water. This follows a decision to designate the whole
of Wales as a Nitrate Vulnerable Zone (“NVZ”), with full compliance
expected from 2024. We are therefore ensuring that relevant members
of our teams are qualified under the Fertiliser Advisers Certification and
Training Scheme (“FACTS”), and expect to work with an increasing
number of customers on fertiliser application strategies and manure
management.
Cereal and oilseed rape prices have been extremely strong, rising
to record levels over recent months. This supports our positive
view of prospects for the sector, although farm costs have also
increased significantly and there are also labour challenges affecting
transportation.
Glasson Grain Limited
Glasson Grain Limited (“Glasson”) operates from Glasson dock, near
Lancaster, and has three core activities, fertiliser blending, the supply
of feed raw materials, and the manufacture of added-value products
to specialist animal feed retailers.
Glasson’s performance was ahead of our expectations, with results
reaching a record high. Fertiliser blending activities achieved record
Agriculture - Revenue (note 2, pages 69-70)
2021
2020
2019
£358.96m
£302.58m
£358.69m
Up 19% after an increase in feed volumes, arable activities
returning to more normal harvest tonnages and a good autumn
2021 planting season, and outperformance by Glasson.
Agriculture - Segment Result (note 2, pages 69-70)
2021
2020
2019
£4.22m
£2.88m
£2.95m
Operating profit
contribution up 47%
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Chief Executive’s Review continued
AGRICULTURE SITES
volumes and well above budgeted margins in the second half of the
year. Already holding stock, Glasson experienced an exceptional
benefit from the substantial increase in fertiliser raw material prices
across the market in the second half of the financial year. The feed
raw material trading operations also delivered a strong performance
reflecting buoyant demand. Specialist animal feed volumes, which
includes bird, equine and game feed, were impacted by the effects of
coronavirus restrictions, which reduced demand.
The fertiliser blending business of HELM Great Britain Limited, in South
Yorkshire that we acquired in March 2021, has been integrated into
Glasson, and performed very well. Its acquisition has consolidated
Glasson’s position as the second largest fertiliser blending operator
in the UK.
During the second half, we completed a restructuring of the
operations, discontinuing non-core activities, such as stevedoring.
This has left Glasson now wholly concentrated on growing its core
activities.
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SPECIALIST AGRICULTURAL MERCHANTING
DIVISION
The Specialist Agricultural Merchanting Division comprises a
network of 54 depots located within predominantly livestock areas
of England and Wales. Its activities are supported by supplementary
routes to market, which include specialist catalogues, our sales
trading desk and our digital sales platform. The depots work
closely with our sales specialists to provide customers with in-
depth advice. The Division also includes Youngs Animal Feeds, our
specialist wholesale business. Youngs Animal Feeds manufactures
and markets a range of equine products throughout Wales and the
Midlands.
The Division delivered very strong results, with total revenue
increasing by 10% to £141.43m (2020: £128.81m), and like-for-
like revenue, defined as those depots open for twelve months in
both the reporting and prior periods, up 12%. Operating profit rose
by 24% to £7.15m (2020: £5.78m).
Wynnstay Depots and Youngs Animal Feeds
The excellent performance the Division delivered reflected increased
farmer confidence and a return to farm investment. Sales were
especially strong across Wynnstay-branded bagged feed, animal
health products, milk replacers and agricultural hardware, which
includes fencing and farm metalwork products. While there were
supply chain challenges with some products over the year, caused
by the coronavirus situation and Brexit-related delays, our broad
pool of suppliers minimised the disruption.
We continued with our depot optimisation programme, and
amalgamated the distribution depot at Cleersview in Somerset with
the depot at Sedgemoor. We also purchased the site we previously
leased at Llangadog. This has enabled us to increase storage
space and improves customer service levels in the locality.
Youngs Animal Feeds performed strongly, and significantly ahead
of the prior year. The closure of the Huyton store at the end of
the previous year removed material costs, benefiting profitability.
During the year, we rebranded our in-house produced feed fibre
products as ‘Sweet Meadow’ and are targeting new markets for
this sector-leading product.
The Specialist Agricultural
Merchanting Division performed
exceptionally well, with higher
sales and a significant increase
in profits against last year
Specialist Agricultural Merchanting -
Revenue (note 2, pages 69 – 70)
Revenue up 10%
£141.43m
£128.81m
£131.84m
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Segment Result (note 2, pages 69 – 70)
Operating profit
contribution up 24%
£7.15m
£5.78m
£5.24m
54 Wynnstay depots
3 Youngs Animal Feeds
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
continues to be installed across the operations and our distribution
fleet is making greater use of electric forklifts, hybrid cars, and B20
fuel.
The appointment of Lewis Davies as Environmental and Sustainability
Manager in February 2021 was designed to further accelerate the
development of our ESG strategy. He was previously involved with
the creation of Wynnstay’s sustainability objectives, which encompass
raw materials sourcing, waste management and energy efficiency
as primary areas of focus. He is also a member of the sustainability
committee of the agrisupply industry’s leading trade association,
the Agricultural Industries Confederation (AIC), and will act as a
representative for Wynnstay as the Company works with its peers to
promote increased sustainability throughout UK agriculture. Wynnstay
is also a corporate member of Linking Environment and Farming
(“LEAF”), which works with farmers, the food industry, scientists and
consumers to encourage and enable sustainable farming. LEAF also
campaigns to increase public understanding of, and demand for,
environmentally and sustainably sourced product.
Social and charitable contributions are important to the Group. In
order to raise money, encourage regular exercise and promote general
well-being, we initiated a “North to South” challenge. Colleagues, their
friends and family were invited to see how many times they could walk,
run, swim or cycle 644 miles, which equates to the distance between
our most northerly office in Montrose and our most southerly store in
Helston. The monies raised from the challenge were donated to our
nominated charity, the Royal Agricultural Benevolent Institution, which
supports farming families in times of need.
The Board remains committed to the highest standards of appropriate
corporate and commercial governance to support the delivery of long
term shareholder value.
COLLEAGUES
My colleagues throughout the business have performed exceptionally
well in a trading environment where pandemic considerations remained
paramount. They continued to prioritise the health and welfare of their
fellow colleagues and customers while keeping the business operating
smoothly.
I am extremely grateful for everyone’s hard work, commitment and
team-minded approach, which has contributed greatly to these record
results. I would like to thank all our employees for their outstanding
efforts.
Chief Executive’s Review continued
JOINT VENTURES AND ASSOCIATE COMPANY
Wynnstay has three joint venture companies, Bibby Agriculture
Limited, WYRO Developments Limited and Total Angling Limited, as
well as one associate company, Celtic Pride Limited. The combined
operating profit contribution from these companies was significantly
better than expected.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)
We are committed to achieving net carbon zero across the Group by
2040, and a key pillar of our growth strategy is to help farmers feed the
UK in a more sustainable way.
We believe that Wynnstay is well-positioned to offer solutions at all
points of food production through a ‘whole farm’ approach. There are
significant gains to be made in reducing carbon emissions through
the use of precision-farming techniques. These include precise nutrient
use for crops and livestock feeding management. Management of soil
within a sustainable rotation is also key to environmental outcomes. As
mentioned, earlier, we are working on extending our range of products
and services that support environmental goals and a more sustainable
approach to farming.
We have formed a trading partnership with Caplor Energy, which
installs, maintains and services alternative energy systems and storage
on farms. The partnership will enable us to provide our extensive
customer base of farmers and growers with the opportunity of
generating and storing their own renewable electricity on their farms.
Within the business we have continued to implement initiatives to
reduce energy consumption and carbon emissions. LED lighting
Colleagues throughout
the business
have performed
exceptionally well in
a trading environment
where pandemic
considerations
remained paramount
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The agricultural
backdrop is
currently strong
and Wynnstay is
well positioned
to grow the
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OUTLOOK
The trading environment has improved significantly, and farmer
sentiment across the agricultural sector is strong. Most farmers are
experiencing high value returns for their products, and the Agriculture
Act has brought clarity over financial support arrangements for
farmers following the UK’s departure from the European Union. The
current level of financial support from the UK Government will remain
unchanged until 2024, with a transition period thereafter, which will
provide stability to the industry over the medium term.
Following Brexit, the UK Government has agreed a number of trade
deals with non-EU countries. Although some of these deals may also
have increased the opportunity for agricultural food imports to enter
the UK, they have opened up new markets across the world, at a time
when global demand for food is continuing to increase.
Against this positive trading backdrop, there are some near term
pressures for farmers, with farm input inflation and increased
operational costs.
Nonetheless, we remain confident about Wynnstay’s growth prospects.
We continue to invest across the Group in line with our strategic growth
plans. We are increasing manufacturing and distribution capacity and
efficiency, extending our environmental offering, and continuing with
our depot optimisation programme.
Ensuring that we are in a position to assist customers with expert
advice remains critically important. The new Agriculture Act, which has
introduced a support system very different to CAP, by aligning financial
support to sustainability and environmental concerns, makes this
aspect of our service all the more relevant. We are placing significant
emphasis on sourcing sustainably produced products and materials to
supply to our customers, as well as increasing the Group’s specialist
knowledge base. This will help to reinforce our position as a trusted
supplier of choice to farmers as they transition to the new requirements
under the Agriculture Act, including ELMS.
While digital purchasing of agricultural inputs is still relatively low
amongst our customer base, we continue to invest in our new digital
platform and to increase the ways in which we communicate and
engage digitally with customers.
Trading in the new financial year has started in line with expectations.
The agricultural backdrop is currently strong and Wynnstay is well
positioned to grow the business, both organically and by acquisition.
We are confident that our strategic growth plans, strong cash flows,
robust balance sheet and balanced business model, stand us in good
stead for continuing success into the medium term
Gareth Davies
Chief Executive Officer
1 February 2022
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
BUSINESS SNAPSHOT -
Specialist events
line with our strategy of offering
In
technical advice, we host two specialist
events for our customers, namely The
Arable Event and The Sheep & Beef Event.
The COVID-19 pandemic has prevented
these events from taking place in recent
years, however, we have planned for their
return in 2022.
The Sheep and Beef Event was originally
established in 2015 and attracted over 800
sheep and beef farmers to the most recent
event held. The event hosts practical
demonstrations, trade stands and keynote
speakers offering expert advice for the red
meat sector. We plan to hold the event in
October 2022.
These events provide an ideal opportunity
for knowledge transfer between farmers,
suppliers and
industry bodies, and
demonstrate our commitment to offering
expert advice to our valued customers.
The Arable Event was established in 2012
and attracts in the region of 1,500 visitors
and exhibitors through its gates annually.
The event has become the key practical
demonstration for arable farmers in the
west of the UK, showcasing trial plots
of selected varieties, keynote speakers,
machinery demonstrations and a host of
trade stands. We are pleased to confirm
that the event will return in 2022 and is
scheduled to take place on the 15th June.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 BUSINESS SNAPSHOT -
Depot’s national recognition for customer service
During the year the team at our Llanfair
Caereinion depot were recognised for
their excellent customer service.
Ceri Jones, Manager at the depot was
awarded the Special Achievement Award
at the National SQP Awards in recognition
of her and her team’s efforts in going above
and beyond for their customers during the
pandemic.
The depot is well established in the
town and services a very loyal farming
community in the area. When the pandemic
hit, they were challenged with higher levels
of footfall alongside evolving restrictions
and new health and safety guidelines to
adhere to. The team in the depot worked
tirelessly to serve their customers to
the highest standards in the safest way
possible. This has been evident across our
network of 54 depots which all play a vital
part in servicing the rural communities in
which they operate.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc 20
Finance Review
TRADING RESULTS
The Group’s operations continue to be split into two main divisional
segments for reporting purposes, 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 with transactions recorded in this segment
being immaterial to the overall results of the Group.
A summary of the trading conditions experienced by the business over
the last financial year is provided in the Chief Executive’s Review on
pages 13-18, and includes details of the acquisitions made during the
year.
Group revenue in the period grew to £500.39m (2020: £431.40m),
with the increase being a combination of increased volumes, new
acquisitions, and significant commodity inflation during the year.
Most of these factors occurred in the Agriculture division where sales
increased by over £56m or 18.6% to £358.96m (2020: £302.58m).
The Specialist Agricultural Merchanting division also saw strong
revenue growth of 9.8% to £141.43m (2020: £128.81m), although
the comparative period would have included some trading restrictions
implemented during the early Coronavirus lockdowns. Like for like
activities in this division, which are defined as those depots open for
twelve months in the reporting and prior periods, increased by 12%
due to the closure of some depots.
Group adjusted1 operating profit was £11.09m (2020: £8.14m), and
profit before taxation was £10.99m (2020: £6.98m). On the Board’s
preferred alternative performance measure referred to as Underlying
pre-tax profit, which includes the gross share of results from joint
ventures but excludes share-based payments and non-recurring
items, the Group achieved £11.44m (2020: £8.37m). A reconciliation
with the reported income statement and this measure, together with
the reasons for its use is given below:
£000
2021
2020
Profit before tax
10.991
6,981
Share of tax incurred by joint ventures &
associates
Share-based payments
Non-recurring items
Underlying pre-tax profit
21
105
343
-
11,439
100
96
1,194
8,371
The Board are pleased
with the financial
performance of the
Group during the
year which continues
to demonstrate the
value to be generated
from the balanced
business model
The Board uses this alternative performance measure as it believes
the underlying commercial performance of the current trading activities
is better reflected, and provides investors and other users of the
accounts with an improved view of likely future performance by making
the following adjustments to the IFRS results for the following reasons:
• The add back of tax incurred by joint ventures and associates.
The Board believes the incorporation of the gross result of
these entities provides a fuller understanding of their combined
contribution to the Group performance.
• The add back of share-based payments. This charge is a
calculated using a standard valuation model, with the assessed
non-cash cost each year varying depending on new scheme
invitations and the number of leavers from live schemes. These
variables can create a volatile non-cash charge to the income
statement, which is not directly connected to the trading
performance of the business.
• Non-recurring items. The Group’s accounting policies include the
separate identification of non-recurring material items on the face
of the income statement, which the Board believes could cause
a misinterpretation of trading performance if not disclosed. An
analysis of these charges is given in Note 5 to the accounts.
Inclusive of contributions from joint ventures our Agriculture division
generated an operating profit before non-recurring items of £4.22m
(2020: £2.88m), while our Specialist Merchanting division produced
£7.15m (2020: £5.78m). Other activities generated a small loss of
£0.09m (2020: £0.12m).
1 Adjusted results are after adding back amortisation of acquired intangible assets, goodwill
impairment, share-based payment expense and non-recurring items.
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Taxation
The Group’s tax charge including joint ventures of £2.16m
(2020: £1.55m) represents 19.5% (2020: 21.9%) of the
Group pre-tax profit of £11.09m (2020: £7.08m), returning
to a more normalised level after last year’s additional
deferred tax provisions relating to the recalculation of
these at a higher rate. A reconciliation relating to Group’s
tax charge and Group pre-tax profit is shown:
£000
Group’s tax charge
Taxation
Share of tax incurred by associate and joint venture
Group pre-tax profit from continuing operations
Profit before taxation from operations
Share of tax incurred by joint ventures and associates
2021
2020
2,057
105
2,162
10,991
105
11,096
1,448
100
1,548
6,981
100
7,081
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In accordance with Schedule 19 of the Finance Act 2016, the Group has published a Tax Strategy document on its website, which confirms 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 offshore tax jurisdictions and will not use specifically constructed tax avoidance schemes or arrangements.
Earnings Per Share & Dividend
Basic earnings per share were 44.40p (2020: 27.73p), based on a weighted average number of shares in issue during the year of 20.120m (2020:
19.952m). The Board proposes to recommend the payment of a final dividend of 10.50p per share to be paid on the 29 April 2022, which when
added to the interim dividend of 5.00p per share paid on the 29 October 2021, makes a total of 15.50p for the year (2020: 14.60p), an increase
of 6.2%. The total dividend is expected to be covered around 2.80 times (2020: 1.90 times) by earnings after non-recurring items. The total
dividend represents the eigthteenth consecutive year of payment growth since the business was floated 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 £16.47m, (2020: £15.82m) and are adequate to cover over five years of current dividend
payment levels. Adequate anticipated cash resources and future cash generation assumptions also support the Board’s view that the current
policy is sustainable. A process of subsidiary dividend payments to the parent Company continues so as to ensure adequate liquidity and capital
are available to support the progressive dividend policy.
Cashflow and Net Cash
The business continues to generate positive strong operational cashflow, although during the year the previously mentioned commodity inflation
has required a significant increase in working capital which has absorbed an element of the free cash generation. Cash generated from operations
amounted to £10.55m (2020: £19.83m), and such circumstances highlight the importance of maintaining adequate headroom in bank facilities
which the Group has continued to operate. Despite this pressure the Group still reported a total positive net cash position at the year end of
£9.24m (£8.42m). Excluding the classification of land & building leases as debt, in accordance with the basis on which the Group’s banking
covenants are calculated, the net cash position was £15.46m (2020: £14.71m). The October year end does represent the trough of the Group’s
annual seasonal working capital cycle and therefore usually the highest cash position.
Share Capital and Balance Sheet
During the year a total of 89,687 (2020: 155,035) new ordinary shares were issued for a total equivalent cash amount of £0.439m (2020:
£0.392m) to existing shareholders exercising their right to receive dividends in the form of new shares. A further 158,138 shares were issued for
a total cash consideration of £0.586m (2020: Nil) to employees exercising rights over approved share options.
Group net assets exceeded £100m for the first time during the year, and at the year end amounted to £105.72m (2020: £98.18m). Based on the
weighted average number of shares in issue during the year of 20.120m, (2020: 19.952m) this represented a net asset value per share of £5.25
(2020: £4.92). During the financial year the share price traded in a range between a high of £5.92 in August 2021 and a low of £2.85 in November
2020. Based on these balance sheet values, Return on Net Assets from Underlying Pre-tax profits was 10.8% (2020: 8.6%).
Capital investment in fixed assets including right of use assets amounted to £5.85m (2020: £4.01m) in the year, and net Working Capital, which
is defined as, the net of inventory, trade and other receivables and trade and other payables, increased by 23.5% as at the year end, standing at
£46.81m (2020: £37.89m), with the increase created by the expansion of the business and commodity price inflation.
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Key Performance Indicators
The performance of the business is regularly monitored against financial key performance indicators (KPI’s), defined as follows:
REVENUE:
The invoiced value of sales from the Group’s activities, measured at a fair value net of all rebates and excluding value added tax. £500.39m
(2020: £431.40m).
EBITDA:
Earnings before interest, tax, depreciation and amortisation, and excluding non-recurring costs, and share-based payment expense. £18.21m
(2020: £14.15m). A reconciliation of this measure to reported IFRS profit before tax is provided below:
£000
IFRS reported pre-tax profit
Tax on joint venture and associate income
Net profit on disposal of assets
Interest
Depreciation & ROU amortisation
Intangible amortisation, goodwill impairment and share-based payments
Other non-cash charges
EBITDA
Operating lease payments – repayment of debt
EBITDA after operating lease payments
EARNINGS PER SHARE:
2021
10,991
105
(74)
190
6,139
477
386
18,214
(2,419)
15,795
2020
6,981
100
(117)
272
6,178
132
601
14,147
(2,490)
11,657
Profit for the year after taxation divided by the weighted average number of shares in issue during the year 44.40p (2020: 27.73p).
UNDERLYING PRE-TAX PROFIT:
Underlying pre-tax profit includes the Group’s share of pre-tax profit from joint ventures and associate investments but excludes non-recurring
costs and share-based payment expense. £11.44m (2020: £8.37m).
RETURN ON NET ASSETS:
Underlying pre-tax profit, with intangible amortisation added back, divided by the balance sheet net asset value. 10.8% (2020: 8.6%)
NET ASSETS PER SHARE:
The balance sheet net asset value, divided by the weighted average number of shares in issue during the year. £5.25 (2020: £4.92).
The Board are pleased with the financial performance of the Group during the year which continues to demonstrate the value to be generated from
the balanced business model operated for many years and which forms the basis for the continuing strategy focusing on customers in the dairy,
free range egg, high input beef & sheep and arable sectors of UK farming.
Paul Roberts
Finance Director
1 February 2022
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Company Details
COMPANY NUMBER
2704051
REGISTERED OFFICE
Eagle House
Llansantffraid Ym Mechain
Powys
SY22 6AQ
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Advisors
AUDITOR
RSM UK Audit LLP
20 Chapel Street
Liverpool
L3 9AG
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
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
BUSINESS SNAPSHOT -
Multichannel offering
We continue to provide a multichannel
offering aligned to the needs of our
customer base.
and change their preferences, as well as
being able to browse and order products
online for collection or delivery.
Our established network of 54 depots
and over 80 members of our Field Sales
and Specialist teams, offering specialist
advice to customers, are complemented
by our central Sales Desk and our recently
launched customer portal.
Our Sales Desk, based in Shrewsbury,
Shropshire is a dedicated team available
to speak to over the phone and offers
our customers a complementary way of
sourcing their agricultural inputs.
In November we launched our customer
portal, offering our trade customers an
easy and convenient way to access their
account information, pay their statements
We believe that it is important to provide
customers with the flexibility of multiple
buying channels, ensuring our offering is
aligned to their business requirements.
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Qualified advice from our people
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Our business is built on the foundation of
offering our customers the highest standard
of customer service and specialist advice
to ensure they can achieve the best return
on investment from their enterprise.
We believe that the investment we make in
the training and development of our people
is of the utmost importance to developing
our valued colleagues, and providing the
highest level of service to our customers.
In 2021 we launched our Wynnstay Sales
Academy with the purpose of providing
high-quality sales training and personal
development, to ensure the professional
advice our team offers is in line with the
highest industry standards. It combines
both in-house classroom-based training
with on-going field-based training for
members of the Wynnstay Sales Team. 30
participants have undergone the training
since April 2021.
Alongside this, teams from across the
business are enrolled in training and
development activities to further enhance
their knowledge and expertise in their
relevant area of specialism.
Examples of qualification schemes
currently offered in the business.
BASIS -
Pesticides and Fertilisers
SQP -
Animal Health
FACTS -
Fertiliser
20Twenty -
Leadership and Management
CIPD -
People Management and Development
CIM -
Marketing Management
CIMA -
Chartered Institute of Management
Accountants
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Principal Risks and Uncertainties
For the year ended 31 October 2021
The Group has embarked on a significant five year growth strategy and will have to manage inherent and specific risks as it implements its plans.
The Board retain overall responsibility for reviewing risk management strategies and maintains a framework to create sustainable growth over
the medium to long-term by adopting an approach that is appropriate to the business activities being conducted and the scale of the enterprise.
This statement provides information about the main identified risks and some of the controls in place to mitigate against these issues. 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. During the year the Board reviewed and updated their risk register which is regularly considered
for changing circumstances.
In all businesses, there are some risks and uncertainties which are not able to be fully 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 financial risk, the Group continues to have a
strong balance sheet and low gearing which are priorities for the Board.
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
Continuing
Operational: Coronavirus pandemic
The on-going coronavirus pandemic presents a number of
different risks to the business, not least to the health and
welfare of our colleagues, customers, suppliers and the
communities in which the Group operates. While considerable
experience has now been developed to manage safety
concerns, the possibility of infection breakouts remains both
locally and nationally. So the Group’s activities could easily
be disrupted through staffing issues and wider lockdown
restrictions impacting resource availability and demand.
The Group takes appropriate actions in accordance
with government regulations and guidance to ensure a
Coronavirus secure operating environment. These include
continuing remote working operations where appropriate,
on-going investment in protective equipment and risk
assessed safety precautions where staff interact with each
other or other contacts such as customers and suppliers.
Increasing
Operational: IT systems including cyber security
Much of the Group’s activities rely on networked IT
systems and the breakdown of any of these systems
through mechanical fault, data loss, malicious activity or
obsolescence could lead to failure in customer fulfilment
processes together with reputational and financial damage.
The potential risk of cyber attacks has increased with the
level of remote home working.
The Group has internal IT support teams to manage its
computer systems, including procedures for recovery from
disruption.
Security training continues for relevant staff and recovery
simulations have been successfully completed during the
year.
Investment has increased to update both hardware and
operating software solutions.
Increasing
Operational: Supply chain efficiency
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.
Increasing
Operational: Construction projects
The Group’s expansion strategy entails significant investment
in manufacturing capacity across a range of activities
including feed production, seed processing and fertiliser
blending. Such investment programs have failure risks
associated with them together with concerns such as delays,
cost over-runs and other project management issues.
Considerable time and effort have been invested in
obtaining expert external professional support to the
design, planning and implementation phases of these
internal
projects. The Group has also recruited an
engineering manger to co-ordinate and take responsibility
for the delivery of these critical plans.
Continuing 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 regularly considered at Board level. The Remuneration
Committee develops policies to attract, retain and motivate
the right people for the success of the Group.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
Increasing
Financial: Commodity prices, currency exchange rates and general inflation
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 fluctuating demand for
the Group’s products.
The Group does not engage in the taking of speculative
commodity positions, and uses position reporting systems
with appropriate buying limits in place to manage its
forward purchasing requirements for its manufacturing
operations.
The wider economy has recently experienced a period of
higher cost inflation, particularly in labour and energy costs.
The Group cannot be immune to such general pressures
Continuing
Financial: Availability of finance 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.
Continuing
Operational: Operating environment
Impact of weather conditions and climate change Demand
for the Group’s products is affected 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
specific environment regulated permits or other governmental
approvals or licences. Non-compliance with the terms of
such approvals could result in the withdrawal of authority
to operate certain activities which could lead to volatility of
earnings or loss of reputation.
Position reporting systems are in place and where available,
hedging tools such as commodity futures contracts are
used to manage pricing decisions, while foreign currency
risk is managed by entering into agreements at the time of
the underlying transaction.
Considerable planning has taken place to fix costs such
as electricity forward, and all commercial management are
tasked with seeking forward commitment arrangements
utilising
the Group’s strong balance sheet where
appropriate.
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The Group monitors headroom in its banking facilities and
maintains adequate capacity to absorb unexpected but
foreseeable trading patterns and conditions. Debt facilities
are in place with HSBC Bank Plc which include variable
overdraft and committed revolving credit facilities and term
loans, together with separate asset funding lines.
The majority of existing debt facilities have floating interest
rates linked to bank reference rates. The Board would
review its option to fix the rates attached to such debt
drawdowns through the use of interest swap derivatives
if appropriate.
The Group monitors trends and, as noted above, seeks
to diversify where possible to avoid reliance on individual
customer or product groups, such as offering 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 offers a range of products to meet consumer
preferences. The Group
industry trade
associations and maintains close contact with government
policy development.
is active
in
The Board oversees environment and
regulatory
compliance by receiving regular updates from management
and monitoring the results of internal reviews and external
compliance audits.
Continuing
Financial: Credit
A significant proportion of the Group’s trade is conducted on
credit terms and as such the risk of non-payment is always
present.
Grain trading business
The grain trading business derives a significant proportion of
revenue from a small number of key customers, leading to
substantial customer credit balances.
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.
The Group utilises credit insurance in order to provide
partial cover against default by certain large customers for
grain.
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
28
Principal Risks and Uncertainties continued
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
Continuing
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 benefit 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 network.
Decreasing
Operational: Brexit and the political backdrop
We continue to closely monitor the government’s Brexit
arrangements and adapt our plans to respond to the latest
arrangements.
Some of 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.
The Group diversifies where possible to avoid reliance on
individual customer or product groups, such as offering
products to arable and livestock farmers.
Detailed mitigating actions for price risk are discussed
elsewhere.
respective government’s agricultural
legislative
The
frameworks have been fully investigated and resources
allocated to assist our customers to access the available
funding for joint commercial benefit. The Group will adapt
commercial plans and approaches to respond to the latest
arrangements.
While the Trade and Co-operation Agreement between the
UK and EU initially avoids the implementation of tariffs,
the potential for adverse consequences remains for the
business, both in terms of direct disruption and with regard to
the commercial prosperity of the Group’s predominant farmer
customer base.
Potential disruption issues include:
•
•
•
•
Imported product supply chains
While the Group has limited direct importation activities,
it does rely on smooth supply chains for certain
products and raw materials which could be disrupted
due to congestion and customs procedures at point
of UK entry which could affect manufacturing and
merchanting operations.
Customer exports
Some of our customers export their end product,
so changes in demand for whatever reason for their
products could in turn affect 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
financial support provided and managed by the EU.
The UK governments have implemented replacement
support schemes but with different priorities
for
accessing payments going
forward. A potential
reduction in the funding may lead to uncertainty and
impact our customer buying patterns.
29
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group PLC - Section 172 Statement
Financial Year ending 31 October 2021
BACKGROUND
STAKEHOLDERS
For periods beginning on or after 1 January 2019, all large companies
are required to include a separate statement in their strategic report
that explains how its directors have had regard to wider stakeholder
needs when performing their duty under s172 of the Companies Act
2006. The introduction of this new disclosure requirement has not
changed the underlying statutory duties of a director, which are set
out below:
Section 172(1) of the Companies Act 2006
A director of a company must act in the way he/she considers, in good
faith, would be most likely to promote the success of the company for
the benefit of its members and in doing so have regard (amongst other
matters) to:
a. The likely consequences of any decision in the long term
b. The interests of the company’s employees;
c. The need to foster the company’s business relationships with
suppliers, customers and others;
d. The impact of the company’s operations on the community and
the environment;
e. The desirability of the company maintaining a reputation for high
standards of business conduct, and;
f. The need to act fairly between members of the company.
The Board and its individual directors have acted in accordance
with these statutory obligations while conducting their duties during
the financial year to 31 October 2021, and have taken into account
relevant issues, factors and wider stakeholder group concerns when
considering business strategy and the decisions necessary to execute
that strategy. 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.
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The Group has identified five main stakeholder groupings associated
with the business, and produced specific outline corporate goals
for each, which must be balanced to satisfy the expectations of all
stakeholders and to achieve the overall strategic ambitions of the
Business. Engagement channels are well developed for each grouping,
which provide strong two-way communication links ensuring the
Board are always cognisant of expectations. Additional information of
engagement can be found the ESG Framework section of the Annual
Report.
Customers – where the Group seeks to excel in terms of range,
value, quality, and service. The relationship nature of the Group’s
trading activities requires strong communication links with individual
customers which are maintained through named account managers
and other dedicated sales contact personnel, regular correspondence
and increasingly through digital interaction channels. The Group has
specialist teams who are able of offer advice on a range of agricultural
matters, and more details can be found within the Strategic Report.
Shareholders – the Board seeks to execute its strategy in a
sustainable way in line with our corporate values, Wynnstay THRIVE,
which is explained elsewhere in this report. We utilise the principles
set out in the QCA to use good corporate governance and build
trust, communicating updates on financial performance in a timely
and appropriate manner. Directors will routinely engage with both
institutional and private investors and will seek out opinions on unusual
or potentially controversial matters before applying policy changes.
Colleagues – where the Group aims to attract, develop and reward
high quality personnel, and ensure a safe, productive and interesting
environment to work in, thus encouraging the highest levels of
customer service. The Group has an active Colleague Forum and a
senior management “open-door” policy to encourage open dialogue
across the business. Senior executives regularly visit all operational
locations with due regard to COVID safety and staff are routinely
updated on developments through correspondence, newsletters,
blogs and meetings.
Suppliers –he Group has a comprehensive network of reliable and
supportive suppliers, and seeks to select suppliers who offer sustainable
partnerships in order to offer better value to our customers. Product
managers regularly engage with suppliers, developing marketing
initiatives that align to the commercial objectives of the business.
Communities – where the Group aims to be an active and positive
participant in the local communities in which it operates. Participation
in social engagement with various community contacts is encouraged.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Wynnstay Group PLC - Section 172 Statement continued
KEY BOARD DECISIONS
During the year certain key Board decisions and their implications on relevant stakeholders groups can be categorised as follows:
ISSUE & DECISION
STAKEHOLDER
GROUPS
OUTCOMES
Continuing Covid 19 Response – The Board’s overriding priority
is the safety and welfare of colleagues, customers, suppliers and
communities. The global pandemic created significant social and
economic disruption, and the Board introduced Covid secure working
environments and implemented policies to ensure compliance with
government regulation and guidance while continuing to service
Customers effectively. With the gradual easing of restrictions in the
wider economy in 2021, the Board maintained a policy of moving
more slowly and gradually and ensuring the relaxation of safety
measures were implemented after consultation with the relevant
stakeholder group.
All
Safe working practises including social distancing and where
possible working from home have been adopted to protect suppliers,
customers and colleagues. Deliveries direct to farm have been
maintained throughout the pandemic and although Depots were
closed in the first few days of the first lockdown period the majority
re-opened quickly thereafter. Initial disruptions caused by Board
approved Covid protocols were quickly rectified and customers have
enjoyed uninterrupted access to all products and services since then.
All business activities have adapted well and have now adopted
longer term sustainable working practises. The Board believes the
reassurance provided to Suppliers, Customers, Colleagues and
local Communities has allowed the business to maintain service
and to deliver the returns to shareholders in line with pre-pandemic
expectations.
Regular communications have been made throughout the Covid 19 pandemic with all stakeholder groups to ensure that there is a clear and consistent
understanding of our Covid 19 response.
Appointment of an Environment and Sustainability Manager
– The Board approved both the creation of a new role and the
appointment of Lewis Davies as Environment and Sustainability
Manager
for the
in February 2021. Lewis has responsibility
development and delivery of the Group’s strategy in this area.
This work will encompass all areas of group operations and will seek
to develop holistic solutions that will address carbon, soil, air, water
and biodiversity challenges both in our business and on the farms of
our customers.
All
We will be working closely with our customers to provide advice,
products and solutions to the environmental challenge and we help
them to adapt to the recent Agriculture Bill as it unfolds. We will be
encouraging and challenging our suppliers to deliver the innovative
new products required. We will be engaging with our colleagues
on a regular basis to gain from their experience and feedback and
we expect this work to deliver long term benefits to them and the
localities in which they live and work.
All of this we believe will result in a business that is relevant and rewarded in the years and decades to come.
Board Succession Planning - The Board continually review the
correct balance and make-up of their membership to ensure the right
constituent of experienced continuity and fresh input. At the start of
the year the Non-Executive / Executive balance was adjusted, and
later with Jim McCarthy’s decision to retire from the Board, Steve
Ellwood was appointed as Chairman. As an existing member of
the board this ensured the continuation of the established strategic
direction. Following an extensive recruitment process Catherine
Bradshaw was appointed to take up the space vacated by Steve.
Her appointment has enhanced board diversity on a number of fronts.
All
The appointment of Steve Ellwood as Chairman in March represented
refreshed Board leadership but with the benefit of five years of
experience of the Group’s activities. The successful NED recruitment
process that culminated in the appointment of Catherine Bradshaw
in July introduced new skills and sector experience which has
already realised benefits in terms of stakeholder communication and
shareholder perception.
Board effectiveness and its assessment is an essential requirement of the Group’s chosen Corporate Governance code, and results of the latest internal review
have shown improvements in almost all elements of the assessed criteria, with this being attributed to strong dynamics evident in director engagement.
Discontinuation of Stevedoring at Glasson Grain – With
substantial challenges evident in the global logistics sector and
associated responses from the Port Authority in Lancaster, the Board
recognised that historic trading practises should be reviewed. It was
consequentially concluded that certain shipping activities were no
longer viable and that the supporting stevedoring and ships agency
activities at Glasson Dock could not be maintained on a full-time
basis. There was a comprehensive consultation programme and
the local management team has been able to transfer the stevedoring
assets to a non-competing business that has started to operate from
the dock.
Colleagues,
Community,
Shareholder
The non-viable stevedoring and ships agency business have been
discontinued but they have been taken over by a new company to the
docks. There has been no need to write down asset values, displaced
staff have been redeployed and Glasson Grain has continued to
import raw materials without interruption.
The retreat from potentially loss making peripheral activities has enabled the Glasson management team to focus on the fundamental priorities of commodity
trading, added value manufacturing and fertiliser blending.
Further examples of the Group’s engagement with Customers, Suppliers and Colleagues are referenced in the Chairman’s Statement, Chief Executive’s Review and
Finance Review sections of this Strategic Report.
The Strategic Report on pages 3 to 31 was approved by the Board of Directors on 1 February 2022 and signed on its behalf by Steve Ellwood and Paul Roberts.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 ESG FRAMEWORK
OUR ENVIRONMENT GOALS
The Group’s direct impact on the environment remains a key area of focus, and we are working towards becoming a carbon neutral business.
In March 2021, we appointed a dedicated Environmental & Sustainability Manager in order to help lead our environmental strategy.
Our environmental goals also extend to our customers and the increasingly important role we can play in assisting farmers to feed the UK in a
more sustainable way.
We have split our environmental and sustainability goals into two main areas:
• Customers – and the products, services and advice we offer
• Our internal operations – and specifically our carbon footprint, including energy, waste and water management
CUSTOMERS AND OUR MISSION TO HELP FARMERS FEED THE UK MORE SUSTAINABLY
Raw Material Sourcing
In 2020, we introduced certified sustainable soya meal and have now
expanded this so that the Group uses only certified sustainable palm
kernel in all manufactured feeds. This ensures that the raw materials
that we use are produced to the standards set by the Roundtable for
Responsible Soya (RTRS) and Roundtable on Sustainable Palm Oil
(RSPO).
Packaging Review
We have reviewed our supplier base, compromising over 400
businesses, to identify areas for improvement in packaging. Having
identified 58 areas of improvement, we are now working with suppliers
to address solutions. We are also working with the supplier of all own
branded products to eliminate packaging that currently goes into
landfill, and to ensure that our product packaging uses at least 30%
recycled materials.
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Feed
During the year we introduced a number of climate-friendly feed diets,
incorporating sustainably sourced materials. We plan to launch a
range of ruminant diets that will include a feed ingredient that reduces
methane emissions and is endorsed by the Carbon Trust. We expect
demand for our climate-friendly rations to grow strongly.
Seeds
In March 2021, we appointed Amy Watts, Environmental Seed Product
Manager to further develop our offering. We aim to offer arable and
livestock farmers sustainable, environmentally-friendly seed mixtures,
which include pollinators and deep-rooted herbs.
Nutrient Management Solutions
Our qualified staff offer our customers expert advice on nutrient
management solutions as well as appropriate products that support
on-farm compliance. We advise on soil sampling, nutrient management
planning, forage audits, animal health plans and faecal egg testing as
well as other areas. As farmers respond to new legislation, including
ELMS, which prioritises environmental concerns, we expect this
aspect of what we do to become increasingly important.
Sustainable Products
We continually look for opportunities to introduce sustainable and
environmentally-friendly products into our range. New products that
we have introduced included rainwater harvesting solutions, solar
water solutions, alternatives to metal and timber, and picnic tables
made from UK household waste.
Crop Packaging
Crop packaging is a sizable waste stream for our customers, and we
have introduced new ranges of silage wrap and silage sheeting. These
use recycled plastic material and reduce total plastic usage without
adversely affecting performance.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Environmental Strategy
SCHEMES
INTERNAL OPERATIONS
LEAF Corporate Membership
As part of our focus on promoting a greener approach in agriculture, we
joined LEAF (Linking Environment and Farming), a global sustainable
farming organisation. As corporate members we are able to support
LEAF’s initiatives and share knowledge and exchange capabilities, as
well as advance Wynnstay’s commitment to community outreach.
Logistics
In 2021, we completed a trial to evaluate a greener biodiesel blend,
B20 diesel. It has been successful, and we are now planning to roll
this bio percentage across the HGV fleet. We will also explore further
fuel options, including B30. We also introduced hybrid-engine vehicles
into our fleet and the majority of new vehicle orders for 2022 are for a
hybrid engine vehicle option.
Green Dragon Environmental Standard Scheme
The Green Dragon Environmental Standard is awarded to organisations
that can demonstrate effective environmental management and that
are taking action to understand, monitor and control their impacts
on the environment. We have maintained our certification under the
Scheme.
Manufacturing
We are improving efficiencies across our manufacturing operations,
with a programme of investment. Over the next three years, our feed
manufacturing mill at Carmarthen site will benefit from this investment
programme. The mill has already improved hourly tonnage output and
reduced energy usage per tonne.
Energy
We are accelerating the conversation of all sites to LED lighting and aim
to complete fully our LED installation programme by the end of 2023.
This covers both leased and owned sites. A comprehensive survey
has already been completed, with the accelerated rollout commencing
in 2022.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Environmental Strategy continued
(SECR) STATEMENT
We measure and report our energy and carbon data across the whole Group, giving comprehensive data to authenticate the environmental
impact of the Company. Our SECR statement includes all emission sources required under the 2019 regulations for the financial year ended 31st
October 2021. As this is the second year of reporting, we shall be comparing this year to our benchmark 2019/20 year.
Wynnstay Group used 12,466 (12,710 2019/20) carbon dioxide equivalent tonnes (tCO2e) of energy during the year. 31% (31% 2019/20) of
energy was used in producing compound and blended feeds in our production plants, and a further 56% (54% 2019/20) was used by our fleet of
commercial vehicles. Both production and transport efficiency are key to our energy savings plans, looking for efficiencies in factory throughput
and miles achieved per litre or road fuel respectively.
The carbon intensity ratio we have chosen is the best reflection of our total activity across all our operations based on the total tonnage traded
of agricultural inputs and grain. Our carbon intensity ratio for the year ended 31st October 2021 was 7.62tCO2e (8.14 2019/20) per 1,000
tonnes of agricultural inputs and grain traded. For future periods we shall set reduction targets for our carbon emissions to enable us to begin the
measurement of energy efficiency along with financial performance.
In order to calculate the carbon emissions, we have used the emission factors from the UK Government’s GHG Conversion Factors for Company
Reporting 2021. One of the requirements of the SECR regulations is to report our total UK energy use in kilowatt hours (kWh); for this we have
used the 2021 conversion factors. The Scope 1 and 2 emissions reported are for all operational facilities under our control and for which we have
direct management responsibility.
Streamline Energy and Carbon Reporting
Carbon Emissions
Direct Emissions Scope 1
Direct Emissions Scope 2
Other Emissions Scope 3
Total Emissions
Tonnes of CO2 equivalent PA (tCO2e)*
2020 / 21
2019 / 20
9,197
3,249
20
12,466
9,086
3,582
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12,710
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Delivered tonnage of agricultural inputs and grain
1,635,788 Tonnes
1,560,895 Tonnes
Carbon Intensity Ratio (tCO2e per 1,000 tonnes traded)
7.62
Total UK Energy Usage (kWh)
54,499,274
8.14
53,320,243
During the year the Group increased the use of B10 diesel into its bunkered storage facilities. This has a 10% biofuel content, which in accordance
with the UK GHG conversion factors produces a lower carbon emissions rate.
The electricity supplier for the Group’s most intensive uses has continued to improve the mix of generation sources, which has also reduced the
carbon emissions relating to that consumption, which is in addition to a 2% manufacturing efficiency achieved in those energy intensive sites in
terms of kWh used per tonne of production.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Wynnstay helps livestock and arable farmers to produce food
in a more sustainable, environmentally friendly and profitable
way. We provide our customers with quality products, specialist
advice and an efficient service that is industry leading.
THRIVE
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 THRIVE
TEAMWORK
Together we are more effective
We can be more effective as a business through collaboration and teamwork. This
means communicating our goals well and listening to the ideas and concerns of all
members of the team.
HONESTY, COMMITMENT & QUALITY
We aim high
By aiming high, we will succeed in creating a stronger, better business. It applies in all
sorts of ways, including the quality of our products, the service we offer, the efficiency
of our processes, and in the advice we provide. Ultimately, if we are a step ahead,
customers will be assured of quality products, expert advice and good value.
RESPECT
Respect and fairness are essential
We believe that relationships flourish where there is mutual respect, and that people
should be treated fairly and equitably. This is most relevant in the work place but it also
cuts across all professional relationships, including with partners, suppliers and
customers.
INNOVATION
Innovation is the future
Farming is changing and we want to provide farmers with access to the innovation that
is driving sustainable and more effective farming practices. To that end we are
constantly looking across the market for new products and approaches that will allow
us to provide farmers with the tools they need to maximise their potential. We apply the
same spirit to our business to ensure continuing development and improvement.
VALUE CREATION
A better tomorrow
Our objective is to generate value for shareholders and for society, as well as for our
customers and people. We endeavour to run the business in such a way that we offer
participation in a business model with an attractive long-term financial profile, which
also contributes to society.
ENVIRONMENTAL SUSTAINABILITY
A more sustainable world
We consider our environmental impact when making business decisions. We are
dedicated to making our supply chain more sustainable, and are working hard towards
contributing to a more sustainable world.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
BUSINESS SNAPSHOT -
Our specialists teams
Our sector specific specialist teams are
dedicated to offering our customers expert
advice. The Dairy, Calf & Youngstock,
Poultry, Arable & Forage, Sheep & Beef
and Hardware Teams are experts within
their fields and work directly with our
customers to provide specialist advice
relevant to their individual farm enterprise.
Our teams focus on areas to improve
overall farm productivity and efficiency,
whilst ensuring high standards of livestock
health, welfare, and sustainability. Their
advice is part of the total offering we
provide and is an added benefit from their
relationship with Wynnstay.
These teams provide further opportunities
for knowledge transfer to customers by
holding on-farm workshops and through
the production and communication of
training guides and specialist publications.
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www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 SOCIAL
“Our business is only as good as our colleagues, it’s our colleagues that
make the business what it is. It is the views, thoughts and opinions of our
colleagues that are absolutely crucial to how we develop. Our aim is to make
Wynnstay an even better place to work and a better company to trade with.”
Gareth Davies
COLLEAGUE FORUM AND IDEAS HUB
Our Colleague Forum, which aims to systematically provide information
to colleagues, operate as a mechanism to seek input into the Group’s
strategic decision-making process, encourage involvement in business
performance and achieve a common awareness of the financial and
economic factors affecting the performance of the Group. During
the year the forum have held a number of meetings where they have
invited colleagues from across the business to discuss their particular
roles, giving them an insight into all areas of the Group.
As well as the Colleague Forum, we have an Ideas Hub and mechanisms
for colleagues to directly ask questions to our Chief Executive. During
the year we have received 8 suggestions from colleagues through the
Ideas Hub mechanism.
HEALTH AND SAFETY
Colleague health and safety continues to be our utmost priority and
during the year there were four RIDDORS which compares to two in
the previous year.
PEOPLE MANAGEMENT AND DEVELOPMENT
FRAMEWORK
We support our colleague performance at work through the People
Management and Development Framework. This is a set of basic
principles and standards which are aligned to attract, retain and
develop driven, committed and adaptable individuals who are
passionate about our industry and our business. We strive to support
career path development and opportunities creation through a mix
of learning initiatives including Professional Development Training
Schemes through to experiential learning schemes, to optimise
performance of our colleagues, teams and organisation as a whole.
Reward opportunities include profit-related pay and Save as You Earn
schemes.
We continue to invest in our colleagues and offer training and
development, and where possible, internal promotions. We have
established partnerships with educational and learning facilities and
careers specialists who have an affinity and links with our industry
and its contributors. Nine colleagues graduated from the 20Twenty
Business Growth Course provided by Cardiff Metropolitan University.
COMMUNITIES
Making a positive difference to the communities in which we operate is
important to the Group – we support the communities surrounding our
depots and business offices by supporting local events, fundraising
activities and community groups.
SUPPORTING MENTAL HEALTH CHARITIES
The Group supports charities and organisations that focus on issues
relating to the mental health of those working in the agricultural
industry. In June 2021 we launched our first company wide charity
challenge ‘The Wynnstay Virtual North to South Challenge’, over 200
colleagues participated, and we raised over £6,000 for The Royal
Agricultural Benevolent Institution.
In January 2021 our nominated charity, The Royal Agricultural
Benevolent Institution launched the largest ever research project
relating to the wellbeing of farming people- The Big Farming Survey,
we supported the charity with raising awareness of the project through
our social media channels and internal communications.
We have also supported other agricultural mental health charities
including the DPJ Foundation and We are Farming Minds.
Across the Group we directly donated £5,654 to charity over the
course of the year and a further £7,996 to sponsorship of community
events, such as local agricultural shows. We also raised over £6,000
for The Royal Agricultural Benevolent Institution in our North to South
Challenge.
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INDUSTRY INIATIVES AND NEXT GENERATION FARMERS
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 Award, awarded to the
final year FdSc/BSc student for the best beef project or dissertation.
We have participated in industry iniatives to promote British food
production and British farming, including The Farmers Guardian Farm
24 initiative, NFU Back British Farming campaign, The Worshipful
Company of Farmer’s Lord Mayor Show entry, British Beef Week and
Love Lamb Week.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Corporate Governance Statement
For the year ended 31 October 2021
On behalf of the Board, I am pleased to present our Corporate Governance Statement for the year ending 31 October 2021.
The Board continues to place the highest priority on delivering long-term shareholder value, and critical to this is maintaining a governance
strategy appropriate to the activities and scale of our business. In accordance with AIM Rule 26, the Board have confirmed that they will apply the
QCA Corporate Governance Code for Small and Mid-size Quoted Companies, published in April 2018 (“the Code”) to the Group. I am pleased
to report that the Board believe the Group have remained in compliance with the principles of the Code throughout the year, and this report
describes how this was achieved. Where relevant information is contained elsewhere in this document, references are given.
The Code contains ten principles which are:
DELIVER GROWTH
Principle 1
Establish a strategy and business model which promote long-term value for shareholders
Principle 2
Seek to understand and meet shareholder needs and expectations
Principle 3
Take into account wider stakeholder and social responsibilities and their implications for long-term success
Principle 4
Embed effective risk management, considering both opportunities and threats, throughout the organisation
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5
Maintain the board as a well-functioning, balanced team led by the chair
Principle 6
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Principle 7
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
Principle 8
Promote a corporate culture that is based on ethical values and behaviours
Principle 9
Maintain governance structures and processes that are ft for purpose and support good decision-making by the board
BUILD TRUST
Principle 10
Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and
other relevant stakeholders
DELIVER GROWTH
Principle 1: Long term value creation is at the heart of our business; our goal is to help the farmer to feed the country in a more sustainable way.
This year has continued to be bring operational challenges as a result of the covid-19 global pandemic, but the resilience of the Group’ balanced
business model continued to be reflected in improved financial results. An overview of the Group’s business model is provided on page 5 and
the developments in the business are explained in the Chief Executive Review on page 13-18. The Board’s major decisions during the year are
highlighted within our S172 statement on page 30-31.
Principle 2: The Board appreciates that the diverse shareholder base of the Group may have differing 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 proactively 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 financial results “roadshows” and will also always consider information received from institutional voter advisory firms.
Philip Kirkham is the nominated independent NED who makes himself available to shareholders who may require independent Board contact.
Details on how the Board have taken the views of all stakeholders into consideration when making significant decisions in the year are contained
within the S172 statement on page 30-31.
Principle 3: We create value by operating in a sustainable way, to help livestock and arable farmers grow food that is profitable, sustainable and
environmentally friendly. 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. More detail on how the Group engages with sustainable farming practices is
contained in the ESG Framework Report. During the year, an ESG Manager was appointed who will prioritise the embedding of environmental
and social responsibilities in all governance activities.
Customer feedback is sought via both sales colleagues and senior management, and also by market research where appropriate. We regularly
review customer sales related metrics using our CRM tool.
Continually improving communication between directors and colleagues is important and a number of mechanisms are used across the Group
including, results Roadshows led by the Executive Team, newsletters, Colleague Forums, Health & Safety Committees, and opportunities for all
Colleagues to put questions directly to the Chief Executive.
Principle 4: The Board’s risk appetite is explained within the Principal Risk and Uncertainties on page 27-29, which also includes an analysis
of significant risks and mitigations. The Board retains ultimate responsibility for determining our risk appetite and overseeing management
strategies, with the support of the Audit Committee which discusses internal controls and risk management. The Group does not currently have
a formal internal audit function and at present the Board believes that existing management resource is sufficient to adequately control the Group
in its current size, however this matter continues to be actively reviewed.
39
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 The key procedures within the control structure include:
• A comprehensive risk register is maintained and regularly reviewed by the Board,
• Managers at all levels in the Group have clear lines of reporting responsibility within a clearly defined organisational structure;
• Comprehensive financial reporting procedures exist, with budgets covering profits, cash flows and capital expenditure being prepared and
adopted by the Board annually. Actual results are reported monthly to the Board and results compared with budgets and last year’s actual.
Revised forecasts are prepared as appropriate; and
• There is a structured process for appraising and authorising capital projects with clearly defined authorisation levels.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5: The Board composition is shown below. Succession planning is important to the business and during the year the previous
Chairman stepped down from the role and subsequently retired from the Board after ten years service. I was appointed Chairman in March 2021
having five years experience with the business. A comprehensive search process subsequently led to the appointment of Catherine Bradshaw
as a new non-executive in July 2021, maintaining a good balance of experience and fresh thinking. The roles of Chairman and Chief Executive
are separate and the Chairman is elected by the whole Board on an annual basis. All Board members are able to take independent professional
advice on matters associated with the Company at the Company’s expense. We confirm that all the non-executive directors are considered to
be suitably independent and the Board is satisfied that it has an appropriate mix of capabilities, skills and personal qualities and is not dominated
by one person or group of people.
A formal schedule of matters requiring Board approval is maintained and regularly reviewed and covers items such as Group strategy, approval
of budgets and financial results, dividend policy, major capital expenditure, corporate governance and Board appointments and comprehensive
briefing 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, and details of additional Board Committee meetings are
described under Principle 9 below. The Board and its sub-committees are supported by external advisors as required, who will also offer
guidance in ensuring Directors maintain an adequate skill set to satisfactorily carry out their duties. All Board members are able to call on the
Company Secretary to arrange any required training, briefings or practical experiences necessary to improve their understanding of the business
and its operating environment and their obligations as directors.
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Details of membership and key
skills are on pages 43 to 44
ent Stakehold e r
agement
g
n
E
d
n
e
p
e
d
n
I
Senior
Independent
NED
O
p
e
r
a
t
i
n
g
Chief
Executive
P
e
r
f
o
r
m
a
n
c
e
B o a r d Leadership
Chairman
Independent
NED
The Board is
The Board is
an effective,
an effective,
balanced
balanced team,
team, led by
led by the Chair
the Chair
Independent
NED
Independent
NED
Finance
Director
C
o
m
pany Secretary facilitate s g o o d g
n c e
a
e r n
v
o
a) Remuneration
Committee
b) Audit & Risk
Committee
c) Nominations
Committee
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Corporate Governance Statement continued
Principle 6: Biographical details and key skills of the Directors and their skills are included on pages 43-44. The executive directors all have
considerable experience in the agricultural supply industry and have spent much of their careers with the Group, providing a significant degree
of management continuity. The non-executives bring a range of business and commercial expertise to the Board, including direct agriculture and
specialist merchanting experience. Catherine Bradshaw has been appointed Audit Committee Chair and has considerable and relevant financial
oversight and reporting experience in her executive role as Group Financial Controller at Greencore plc. The Board is satisfied that it has an
appropriate balance of sector, financial and public markets skills and experience and is not dominated by any one person or group of people.
Principle 7: 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. An appraisal of performance of the Board and each Executive Director and Company Secretary
has been undertaken during the year. This review was carried out in the form of an initial Board evaluation questionnaire and then followed up by
interviews conducted by the Chairman. The process reviewed elements in five broad categories which were:
-Clarity of Company roles and responsibilities.
-Accountability and transparency.
-Personal skills, strengths and teamwork abilities.
-Stakeholder engagement.
-Board structure and processes.
The assessed conclusions of the review showed an adequate result in each category with improved scores over last year. The Board approves
annual objectives for the Executive Directors and Company Secretary and measures performance against these objectives when deciding whether
to award a performance related bonus, details of which are reported in the Director’s Remuneration Report.
Principle 8: The Group promotes its Wynnstay THRIVE corporate values culture which is described on pages 35-36. Wynnstay THRIVE involves
collaboration throughout the companies within our Group structure and colleagues at all levels. The Board supports THRIVE as it facilitates our
corporate culture which is based on ethical values and behaviours. The Group also has a number of policies and procedures designed to safeguard
our ethical values, including Whistleblowing, Equal Opportunities, Training and continuing professional development and, where possible, colleague
internal promotions. The Board receives regular feedback on these concepts through the Colleagues Forum, Annual Employee Roadshows and
other senior executive interaction with the wider Company.
Principle 9: 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 43-44.
• Audit and Risk
The committee meets to provide oversight of the financial 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 three times 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 benefit
structures throughout the Group. The Committee met four times during the year and all members attended.
• Nominations
Meets as required to consider senior appointments. There were two meetings during the year.
The Board is satisfied 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.
BUILD TRUST
Principle 10: Details of the Group’s financial performance and position are provided throughout the annual report and details on how key judgements
made during the year and their impact on stakeholders are explained on pages 30-31. The Board are pleased with the financial performance for
the year and believe the results highlight the success of the balanced business model upon which the Group’s long term strategy is built. The
directors are confident and have a reasonable expectation that the Group has adequate resources to continue trading for the foreseeable future and
continue to adopt the going concern basis in the preparation of the Financial Statements. These results will be communicated through all the usual
channels and the arrangements for maintaining a dialogue with shareholders and other relevant stakeholders are described under Principles 2 and
3. A Directors Remuneration report is contained on pages 49-54. A separate Audit Committee report has not been prepared this year as the Board
believes the Committee’s work has been generally explained elsewhere within the Report & Accounts including the notable action of appointing
new external auditors for the Group. The Directors’ Report on pages 47-48 records that, the Board decided that it would be appropriate to carry
out a competitive tender for the Group audit in 2021. This process, conducted by the Audit Committee, resulted in the Directors appointing RSM
UK Audit LLP to conduct the audit this year under s489 (3) of the Companies Act 2006 and they have indicated their willingness to continue in office
and accordingly a resolution proposing their reappointment will be submitted to the Annual General Meeting.
Steve Ellwood
Chairman
1 February 2022
41
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Directors’ Responsibility Statement in respect of the Annual Report
and Accounts, Strategic Report and Directors’ Report and the Financial
Statements
The Directors are responsible for preparing the Annual Report and
Accounts, Strategic Report and Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare group and company
financial statements for each financial year. The directors have elected
under company law and the AIM Rules of the London Stock Exchange
to prepare the group financial statements in accordance with
international accounting standards in conformity with the requirements
of the Companies Act 2006 and have elected under company law
to prepare the company financial statements in accordance with
international accounting standards in conformity with the requirements
of the Companies Act 2006 and applicable law.
The Group and Company financial statements are prepared under
international accounting standards in conformity with the requirements
of the Companies Act 2006 to present fairly the financial position of
the group and the company and the financial performance of the
Group. The Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their achieving
a fair presentation.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and the Company and of the profit
or loss of the group for that period.
In preparing each of the Group and Company financial statements, the
Directors are required to: :
a. select suitable accounting policies and
then apply
them
consistently;
b. make judgements and accounting estimates that are reasonable
and prudent;
c. state whether they have been prepared in accordance with
the
in conformity with
international accounting standards
requirements of the Companies Act 2006;
d. prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and the
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the group and the company and
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and the Company and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Wynnstay Group
Plc website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
On behalf of the Board
Paul Roberts
Acting Company Secretary
1 February 2022
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc 42
Board of Directors and Company Secretary
RC
NC
Stephen Ellwood
Chairman
Steve joined the Board in April 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 Chairman of AH Worth and Company and is a Non-Executive
Director at NIAB and at Velcourt Group.
KEY SKILLS
Sector experience
Strategy and leadership
Mergers and acquisitions
£
Finance
AC
RC
NC
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 significant
experience in the UK livestock sector. He is also Non-Executive Chairman of Meadow Quality Limited, a multi-
species livestock marketing business, and was previously Non-Executive Chairman of NMR Plc.
KEY SKILLS
Sector experience
Strategy and leadership
AC
RC
Howell John Richards
Independent Non-Executive Director
Howell joined the Board in July 2014. He has significant 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.
KEY SKILLS
Sector experience
Strategy and leadership
AC
RC
Catherine Bradshaw
Independent Non-Executive Director
Catherine joined the Board in July 2021. As a qualified chartered accountant, Catherine brings a wealth of
experience in financial control from previous roles at Northern Foods Plc, Morrisons Plc, and currently as Group
Financial Controller at Greencore Group, the words largest manufacturer of pre-pack sandwiches.
KEY SKILLS
Strategy and leadership
Mergers and acquisitions
£
Finance
43
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 NC
Gareth Wynn Davies
Chief Executive Officer
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.
KEY SKILLS
Sector experience
Sales and marketing
Strategy and leadership
Mergers and acquisitions
Bryan Paul Roberts
Finance Director
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.
KEY SKILLS
Sector experience
Company secretarial
Mergers and acquisitions
£
Finance
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Claire Alexander Williams
Company Secretary
Claire became Company Secretary 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
Company secretarial
£
Finance
COMMITTEE MEMBERSHIP
AC Audit Committee
NC Nominations Committee
RC Remuneration Committee
Committee chair
44
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Senior Management
Andrew Thomas Evans
Group Operations and Feeds Director
Andrew joined Wynnstay in 1996 as Marketing Manager and became Retail Manager in 2003. He also owns a
dairy farm in Mid Wales.
KEY SKILLS
Sector experience
Sales and marketing
Strategy and leadership
David Chadwick
Managing Director, Glasson Grain
Dave joined the Group in August 2006 when Wynnstay acquired Glasson Grain. Dave has significant commercial
experience in international trading of animal feeds and fertiliser.
KEY SKILLS
Strategy and leadership
Sales and marketing
Operations and supply chain
Stuart Dolphin
Arable Director
Joined the Group in May 2011 when Wynnstay acquired Wrekin Grain which subsequently became GrainLink.
Stuart has significant commercial experience in commodity trading and arable farming, including seed, fertiliser
and agronomy.
KEY SKILLS
Strategy and leadership
Sales and marketing
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
Paul Jackson
Commercial Sales & Marketing Director
Paul joined the Group in July 2021 with a wealth of experience in sales management and strategic development
within the agricultural sector.
KEY SKILLS
Sector experience
Strategy and leadership
Sales and marketing
45
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
BUSINESS SNAPSHOT -
Specialist Seed Team
team at our
The established seed
Shrewsbury seed plant are experts in seeds
for cereal, grass, root, and maize crops
and are responsible for the production of
our own branded seeds alongside advising
customers on the most suitable mixtures
and varieties for their needs.
The team faced a number of challenges
during the year with a late wheat harvest,
new regulatory procedures slowing the
import of some seeds, the HGV driver
shortage and fuel crisis. Despite these
challenges, planted areas of oilseed
rape increased, alongside a larger winter
wheat crop, plus a swing to more diverse
cropping programmes as farmers looked
for more sustainable farming practices.
In 2021 we added to our existing
specialist seed team with the addition of
an Environmental Seed Manager, Amy
Watts.
The addition of our Environmental Seed
Manager to the team brings a new focus
on crops with environmental credentials
to ensure fertile soils to combat rising
input prices. The provision of advice on
environmental crops from our specialists
will become of greater importance to our
customers in the future as new schemes
are introduced which focus on rewarding
farmers for sustainable farming practices.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc 46
Directors’ Report
For the year ended 31 October 2021
The Directors present their report together with the audited financial statements of the Parent Company (“the Company”) and the Group for the
year ended 31 October 2021.
RESULTS AND DIVIDENDS
Interim dividend per share paid
Final dividend per share proposed
Total dividend
Group revenue
Group profit after tax
2021
5.00p
10.50p
15.50p
2021
£000
500,386
8,934
2020
4.60p
10.00p
14.60p
2020
£000
431,398
5,533
Subject to approval at the Annual General meeting, the final dividend
will be paid on 29 April 2022 to shareholders on the register at the
close of business on 01 April 2022. The share price will be marked
ex dividend with effect 31 March 2022. In accordance with the rules
of the Company’s scrip dividend scheme, eligible shareholders will be
entitled to receive their dividend in the form of additional shares. New
mandate forms for this scheme should be signed and lodged with the
Company Secretary 14 days before the dividend payment date of 29
April 2022.
Details of authorised and issued share capital and the movement in the
year is detailed in note 27 to the financial statements.
DIRECTORS AND THEIR INTERESTS
The Directors who held office during the year and as at 31 October 2021 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
2021
32,761
4,700
n/a
11,172
n/a
2,810
98,998
2020
31,787
4,700
23,377
11,137
50,000
2,810
98,998
2021
7,795
-
n/a
-
-
-
2020
7,795
-
2,618
-
-
-
2021
45,715
-
n/a
-
-
-
2020
35,896
-
20,226
-
-
-
6,857
6,857
36,574
30,318
Further information on the Directors’ discretionary options, including the performance criteria, can be found in the Directors’ Renumeration
Report, with the numbers shown in the above table representing the maximum available to vest.
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 (2020: 16,834 shares). Accordingly, these directors were deemed to hold an additional non-beneficial
holding in such shares.
No director at the year end held any interest in any subsidiary or associate company.
Further details on related party transactions with Directors are provided in note 32 to the financial statements.
Under Article 91, Gareth Davies retires from the Board by rotation at the Annual General Meeting on 22 March 2022 and being eligible, offers
himself for re-election. Having been appointed during the year, Catherine Bradshaw retires under Article 86, and being eligible offers herself for
re-election.
During the year, the Company purchased and maintained liability insurance for its Directors and Officers which remained in force at the date of
this report.
SUBSTANTIAL SHAREHOLDINGS
At 31 October 2021, the following shareholders held 3% or more of the issued share capital of the Company:
Registered Shareholder
Beneficial Holder
Number
of shares
% of issued
share capital
Lion Nominees Limited
Discretionary managed funds of Close Asset Management Limited
2,485,656
12.2
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.
47
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 SHAREHOLDER RESOLUTIONS
At the Annual General Meeting held on the 23 March 2021 the Directors received authority from the shareholders to:
• Allot shares
This gives Directors the authority to allot shares and maintains flexibility in respect of the Company’s financing 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 22 March 2022 is limited to
£450,000. This authority will expire on 22 March 2022, but the Directors intend to seek to renew the same.
• 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 offer to existing shareholders, up to an aggregate amount of £450,000. This authority will expire on 22 March 2022, but the Directors
intend to seek to renew the same.
• 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 satisfied 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 22 March 2022, but the Directors intend to seek to renew the same.
COLLEAGUES
The Group has procedures for keeping its colleagues informed about
the progress of the business, and more information is available in the
ESG report on page 32-34.
The Group continues to encourage employee motivation by operating
a Savings Related Share Option Scheme open to all employees.
The Group provides training and support for all employees where
appropriate and gives a full and fair consideration to disabled applicants
in respect of duties which may be effectively performed by a disabled
person. Where existing employees become disabled, the Group will
seek to continue employing them, bearing in mind their disability and
provided suitable duties are available. Failing this, all attempts will
be made to provide a continuing income. No colleagues have been
furloughed during the coronavirus pandemic.
LAND AND BUILDINGS
In the opinion of the Directors, the current open market value of the
Group’s interest in land and buildings exceeds the book value at 31
October 2021 as provided in note 16 to the financial statements by
approximately £6,460,000 (2020: £6,200,000).
POLITICAL AND CHARITABLE DONATIONS
Details of support to the community is given in ESG report. There were
no political donations during the year (2020: none).
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 47-48.
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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.
Having made enquires of fellow Directors each of these Directors, at
the date of this report, confirms that:
ENGAGEMENT WITH CUSTOMERS, SUPPLIERS AND
OTHERS
Details of the identified main stakeholder groupings associated with
the business are provided in the s172 Statement of the Strategic
Report, but the continuing relationship nature of the Group’s
trading activities requires strong communication links with individual
customers and suppliers. This is achieved through dedicated
personnel contacts, regular correspondence and increasingly through
digital interaction channels.
PAYMENT OF SUPPLIERS
The Group agrees terms and conditions with suppliers before business
takes place and, while there is no Group code or standard it is not
Group policy to extend supplier payment terms beyond that agreed.
There are no suppliers subject to special arrangements.
The average credit terms for the Group as a whole based on the year
end trade payables figure and a 365 day year is 56 days (2020: 44
days).
FINANCIAL INSTRUMENTS AND RISKS
The Group has a number of financial instruments and these are
detailed, together with the risk management objectives and policies
relating to these instruments in Note 25 to the financial statements. The
main financial risks for the Group come from customer credit, foreign
exchange, commodity price volatility, intertest rate movements, cash
liquidity and capital management. The Board’s approach to managing
these risks are detailed in Note 25 of the financial statement.
•
to the best of each Director’s knowledge and belief, there is no
relevant audit information of which the Group’s auditor is unaware;
and
• each Director has taken all the steps a director might reasonably
be expected to have taken to be aware of relevant audit
information and to establish that the Group’s auditor is aware of
that information.
This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
INDEPENDENT AUDITORS
During the year, the Board decided that it would be appropriate to carry
out a competitive tender for the Group audit in 2021. This process
resulted in the Directors appointing RSM UK Audit LLP to conduct the
audit this year under s489 (3) of the Companies Act 2006 and they
have indicated their willingness to continue in office and accordingly
a resolution proposing their reappointment will be submitted to the
Annual General Meeting.
OTHER MATTERS
The Company has chosen in accordance with Companies Act 2006,
s414C(11) to set out in the company’s strategic report information
required by Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, Sch. 7 to be contained
in the directors’ report, and it has done so in respect of future
developments.
By order of the Board
Paul Roberts
Acting Company Secretary
1 February 2022
48
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
and that a recruitment process for a new Non-Executive Director
was commencing. Following this announcement, the Committee
commenced a review of NED fees and consulted recruitment advisors
assisting with the search for the new appointment. This review
concluded that fees were currently below market levels and that the
increased proportionate input provided by additional responsibilities
required recognising in appropriate fee additions. A revised fee
schedule was implemented with effect from April 2021 and is laid out
in the following Remuneration Report.
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 staff
at all levels and to ensure the effective management of the business.
The Committee will be cognisant of comparative pay levels after taking
into account geographic location and the operations of the business
and takes appropriate external professional advice where considered
necessary.
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 2021.
Our approach to remuneration
The Committee’s approach to remuneration continue to be based on
offering 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.
With regard to Executive Directors, the Committee will seek to ensures
that:
•
•
•
the remuneration packages offered 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 sufficiently
long-term basis for aligning the interests of Executive Directors
with those of investors.
Committee decisions on remuneration
During the financial year, the Committee reviewed the operation of
the Performance Share Plan (“PSP”) long-term incentive arrangement
for Executive Directors and other Senior Managers which had been
approved by shareholders in March 2019, and under which initial grants
of nil cost options were made in January 2020. It had become evident
to the Committee that the limitation rules of the scheme would quickly
prevent the granting of further options under the scheme which had
initially been envisaged as being an annual incentive. Such a scenario
would have been counter-productive to the original intentions of
establishing the PSP which was to incentivise Executive Directors and
other Senior Managers 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. The Board therefore
decided to seek shareholder approval for a proposed amendment
to the PSP scheme rules to allow an increase in the limits on the
combined number of subsisting options and options that had already
been successfully exercised in the previous ten years. An appropriate
resolution was therefore tabled at the Annual General Meeting of the
Company held in March 2021 which sought to:
•
•
change rule 5.1 of the PSP to increase the limit restricting the
grant of awards where the total number of “Dilutive Shares”
as defined in the PSP rules, from 10% to 15% of the issued
share capital of the Company; and
change rule 5.2 of the PSP to increase the limit restricting
the grant of awards where the total number of “Discretionary
Dilutive Shares” as defined in the PSP rules, from 5% to 10%
of the issued share capital of the Company.
The Resolution was duly passed by shareholders and a new award
of options under the PSP was granted in April 2021 to appropriate
individuals.
In February 2021 it was announced that Jim McCarthy would be
stepping down as Chairman and subsequently leaving the Board
49
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 EXECUTIVE DIRECTORS:
Basic Salary
Purpose: To provide an appropriate amount of basic fixed income to enable the recruitment and retention of effective management to implement
Group strategy.
Operation: The Committee reviews base salaries on an annual basis, consistent with the reviews conducted for other employees. The review
takes into account:
•
•
•
•
•
•
•
absolute and relative Group profitability;
any changes to the scope of each role and responsibilities;
any changes to the size and complexity of the Group;
salaries in comparable organisations;
the general economic conditions prevalent in the country
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 effect for Executive Directors and other employees.
Performance measures: None, although individual performance, skills and experience are taken into consideration by the Remuneration
Committee when setting salaries.
Annual Performance Bonus (APB)
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:
•
•
profit before tax (PBT) after accrual for bonus payments (75% weighting);
stretching, specific 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.
E
S
G
F
r
a
m
e
w
o
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k
Wynnstay Profit Related Pay
Purpose: An all-employee scheme in which the Executive Directors participate on the same basis as all other employees, designed to encourage
achievement of profit budgets within main trading subsidiaries.
Operation: An employee scheme to reward all staff with a pro-rata profit share, based on a pre-set formula. Paid in February following the
announcement of the financial results for the previous year, after completion of the annual audit.
Performance measures: Based upon the pre-tax profit of two trading subsidiaries, as a net percentage of revenues adjusted for commodity
inflation and subject to a total cap on the overall all-employee pay-out of 10% of profits 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 with a value 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 2018 AGM.
Maximum opportunity: The maximum PSP award opportunity per Executive Director, in respect of any financial 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)
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.
50
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
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 employees.
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. .
Benefits
Purpose: To attract and retain suitable Executive Directors and assist Executive Directors in the performance of their duties.
Operation: The benefits 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 benefits and the individual’s personal circumstances. The
Remuneration Committee examines the cost of benefit provision and will only agree to provide benefits that are in line with market practice and
cost-effective 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.
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 reflect the factors pertinent to respective positions, taking into account the anticipated amount of time
commitment, and comparative rates paid by other companies of a similar size. The Non-Executive Directors do not participate in share option
awards, performance bonuses or pension arrangements. Fees are reviewed by the Remuneration Committee on an annual basis.
Supplemental Committee Chair Fees
Purpose: To acknowledge the additional time and input commitment of chairing two of the important Board sub-committees, being Audit and
Remuneration.
Operation: An additional annually reviewed premium is added to the Basic Annual Fee for the appointed Non-Executive holding the chair of the
respective committee for that relevant financial year.
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
employees.
Medical Insurance Benefit
Purpose: To assist Directors in the completion of their duties.
Operation: Benefits restricted to the provision of private medical insurance for those directors who do not have alternative arrangements in
place.
The non-executive director’s remuneration terms are detailed in individual letters of appointment, which amongst other points contain standard
details as follows:
Initial appointment for a period of twelve months.
Renewal of appointment for a fixed period of three years after initial twelve months.
Post employment restrictive covenants lasting twelve months.
•
•
•
51
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 EXECUTIVE DIRECTOR REMUNERATION
In line with the above policy, the Remuneration Committee have approved the following details of executive director remuneration, 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:
Basic Salaries. A current annual salary effective from November 2020, 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 financial year shown in column C.
Basic Salary
Executive Director
G W Davies
B P Roberts
D A T Evans *1
*1 Retired from the Board 01 Dec 2020
Column A
Column B
Current Basic
Previous Basic
Salary
Salary
Column C
Actual Salary
as a Director
Nov 2020 – Oct 2021
£000
210
168
N/A
£000
206
165
148
£000
206
165
13
Annual Performance Bonuses and Profit Related Pay. The bonus payments made to executive directors in March 2021, and therefore
during the financial year under review, were in relation to the performance of the business for the financial year 2019/20. These payments
were made under the auspices of the new Annual Performance Bonus scheme which includes potential payments of up to 75% of basic
salary based on the Group’s financial performance, and up to 25% based on stretching, specific and measurable strategic and/or individual
objectives. The respective bonus payments made for the financial year ending October 2020, received in March 2021, in relation to both the
financial performance and personal objectives elements of the Annual Performance Bonus scheme are shown in the table below in columns A &
B respectively. The prior year comparatives relate to payments made in relation to financial year 2018/19 under the first year of the new Annual
Performance Bonus scheme.
The Executive Directors also participate in the Wynnstay Profit Related Pay Scheme, (“PRP”) which is a scheme for employees of Wynnstay
Group plc and Grainlink Limited, and which pays an annual bonus based on a formula which produces a percentile result which is then applied
to the relevant individual’s prior year earnings. The formula calculation is the aggregate of the pre-tax profit of Wynnstay (Agricultural Supplies)
Limited and Grainlink Limited divided by the aggregate of the combined revenues. The scheme is subject to a limiting factor preventing the total
paid under the arrangements from exceeding 10% of the profits of the participating companies. The relevant rate for 2020, paid in February 2021,
was 2.7% (2020: 1.9%), with the actual PRP paid to each individual executive shown in Column C below. The anticipated rate for 2021, to be
paid in February 2022 relating to the last financial year is 3.0% of relevant earnings.
E
S
G
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Bonuses £000
Column A
Column B
Column C
Executive Director
Financial Performance
Personal Objectives
Total 2021
Total 2020
G W Davies
B P Roberts
D A T Evans *1
*1 Retired from the Board 01 Dec 2020
57
45
41
46
32
28
103
77
69
30
20
7
Feb 21
PRP received
Feb 20
4
6
4
4
3
2
52
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Directors’ Remuneration Report continued
Pension and death in service life cover. Pension and death in service life cover. Individual Company contributions to personal pension plans
are based on the value of the Executive Directors basic salary only. The annual defined Company contributions to a personal pension scheme
held in the individual’s name, expressed as a percentage of basic salary, and the amounts paid on behalf of each individual for their period of
service as a director during the last financial year, are shown in the table below under column A and column B respectively. The death in service
life assurance cover is provided in a Group policy covering all members, with individual costs attributed to separate members being unavailable.
However, the scheme to which all the executive directors belong, had a total renewal cost at November 2020 of £85,707 (2019: £81,180), and
there were 599 (2019: 667) members covered, equating to an average cost of £143 per person (2019: £122).
Pension
Executive Director
G W Davies
B P Roberts
D A T Evans *1
Column A
Pension %
Column B
Pension Contribution
9.6%
9.6%
9.6%
£000
20
16
1
*1 Retired from the Board 01 Dec 2020
Benefits in kind. Two executive director were supplied with company cars during the financial year, primarily for the furtherance of their duties.
However, these vehicles were available for the executive’s private use and as such have a taxable benefit in kind value calculated in accordance
with HMRC rules. These values for the tax year ending April 2021 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 2020 is shown below in column B.
Benefits in kind
Executive Director
G W Davies
B P Roberts
D A T Evans *1
*1 Retired from the Board 01 Dec 2020
Column A
Column B
Column C
Company Car Value Private Medical Cover Cash Settled Car Allowance
£11,702
N/A
£291
£628
£628
£429
N/A
£7,200
N/A
B P Roberts receives a monthly car allowance of £600 in lieu of the provision of a vehicle and he therefore received a total of £7,200 during the
financial year to October 2021 which is shown in Column C above.
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 to a value calculated as a percentage of base salary.
Other conditions are explained in the Remuneration Policy above. Grants of options under this arrangement were made in April 2021 to two
executive directors each with rights over shares to the value of 40% of their respective annual salaries, as at the date of grant, and as shown in
the combined option table below. which shows all outstanding options open at the year end.
- Awards granted January 2020 – Performance tested for Financial Year Oct 2022.
- Awards granted April 2021 – Performance tested for Financial Year Oct 2023.
The performance criteria of the relevant options are tested at the end of the third financial year after the respective grant as follows:
1. 75% of the Award Shares will vest if the Company’s Earnings Per Share (“EPS”) grows at an annual rate exceeding the rate of growth
of the Retail Price Index (“RPI”) plus 8%. Where this growth is not met, provided EPS grows at an annual rate of at least RPI plus 1%,
30% of the Award Shares tested under the EPS target will vest. Between these criteria, the Award Shares will vest on a straight-line basis.
2. 25% of the Award Shares will vest if the Company’s Return on Capital Employed (“ROCE”) increases to at least 12.6% for the
respecting testing financial year. Where this target is not met, provided a minimum ROCE employed of 10% is met, the Award Shares
will vest between these two criteria on a straight-line basis.
Outstanding options as at Oct 2021 for directors who had served during the year.
Share Option Table
Executive Director
G W Davies
B P Roberts
D A T Evans *1
*1 Retired from the Board 01 Dec 2020
PSP Scheme Maximum Award
SAYE
No. of Options Granted Jan 20 No. of Options Granted Apr 21 No. of Options
27,896
22,318
20,226
17,819
14,256
N/A
7,795
6,857
2,618
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/
53
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Other Share Schemes. Other Share Schemes. The executive directors have in the past participated in the discretionary Approved Company
Share Option Plan (CSOP), which is a tax efficient scheme providing the opportunity to hold up to £30,000 of option value, which, if the scheme
rules and legislation are complied with, can be exercised free of income tax liability for the holder. Such schemes have no performance criteria
attached to their operation. During the year, the two executive directors exercised their remaining outstanding options under this scheme which
resulted in the issue of 8,000 shares each at an option price of £3.75 per share. The market price on the day of exercise was £4.87 per share
resulting in a aggregate gain of £8,960 each.
Additionally, the 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 2021 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 47-48 and in Note 9 to the accounts.
NON-EXECUTIVE DIRECTOR REMUNERATION
The remuneration of the Non-Executive Directors is and has been paid in accordance with the policy outlined above and has been set so
as to reflect the factors pertinent to their respective positions. Details of the amounts received during the last financial year and the current levels
of Basic Annual Fees being paid are given in the table below:
Non-Executive Director
Financial Year ending 31 October 2021
Basic Fee
Supplemental Fee Benefits in kind
Travelling Expenses
£000
£000
£000
£000
J J McCarthy – Retired 31 July 21
P M Kirkham
S J Ellwood – Appointed Chairman 01 Mar 21
H J Richards
C Bradshaw – Appointed 01 July 21
35
38
56
38
13
0
1
0
0
1
0
1
0
1
0
0
1
0
1
1
E
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P M Kirkham
S J Ellwood
H J Richards
C Bradshaw
Payable Financial Year ending Oct 2022
Basic Fee
Supplemental Fee Benefits in kind
Travelling Expenses
£000
£000
£000
£000
39
70
39
39
2
0
0
3
1
0
1
0
1
1
1
1
Philip M. Kirkham
Vice-Chairman and Chairman of Remuneration Committee
1 February 2022
54
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
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
2021 which comprise the consolidated statement of comprehensive
income, consolidated and company Balance Sheets, consolidated and
company statements of changes in equity, consolidated and company cash
flow statements and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and International Accounting
Standards in conformity with the requirements of the Companies Act 2006
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’s and of the parent company’s affairs as at 31 October 2021
and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared
in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and as applied in
accordance with 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
group and parent company 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
In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors’
assessment of the group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included the following:
• a review of the group’s trading and cashflow forecasts, including
challenge of key assumptions applied in forming these forecasts and
assessment of the reasonableness of those key assumptions,;
• sensitivity analysis of the above forecasts;
•
•
review of minutes of board meetings with a view to identifying any
matters which may impact the going concern assessment and
contradict the findings from the procedures above;
review of the group’s going concern disclosures included in the annual
report in order to assess that the disclosures were appropriate and in
conformity with the reporting standards.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively,
may cast significant doubt on the group’s or the parent company’s ability
to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
55
SUMMARY OF OUR AUDIT APPROACH
Key audit matters Group
•
None
Prarent Company
•
None
Materiality
Group
•
Overall materiality: £549,000 (2020:
£324,000)
Performance materiality: £412,000 (2020:
£226,000)
Prarent Company
•
Overall materiality: £108,800 (2020:
£243,000)
Performance materiality: £81,600
•
•
Scope
Our audit procedures covered 98% of revenue,
96% of total assets and 88% of profit before
tax.
KEY AUDIT MATTERS
We have determined that there are no key audit matters to communicate
in our report.
OUR APPLICATION OF MATERIALITY
When establishing our overall audit strategy, we set certain thresholds which
help us to determine the nature, timing and extent of our audit procedures.
When evaluating whether the effects of misstatements, both individually
and on the financial statements as a whole, could reasonably influence the
economic decisions of the users we take into account the qualitative nature
and the size of the misstatements. Based on our professional judgement,
we determined materiality as follows:
Overall
materiality
Basis for
determining
overall
materiality
Group
Parent Company
£549,000 (2020:
£324,000)
£108,000 (2020:
£243,000)
0.2% of net assets
The percentage applied
to the benchmark has
been restricted for the
purpose of calculating
an appropriate
component materiality.
As a non-revenue
generating entity,
shareholder focus is
on the value of assets
held.
5% of profit before
taxation
Profit before taxation
is considered to be
the key benchmark of
the group‘s financial
performance used by
shareholders given
the listed status of the
Group.
Performance
materiality
£412,000 (2020:
£226,000)
£81,600
Basis for
determining
performance
materiality
Reporting of
misstatements
to the Audit
Committee
75% of overall
materiality
75% of overall
materiality
Misstatements in
excess of £27,400 and
misstatements below
that threshold that, in
our view, warranted
reporting on qualitative
grounds.
Misstatements in
excess of £5,440 and
misstatements below
that threshold that, in
our view, warranted
reporting on qualitative
grounds.
• consideration of the finance facilities available to the group during this
period in line with the above forecasts and whether these are sufficient
to meet the group’s finance needs;
Rationale for
benchmark
applied
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The group consists of 11 components, all of which are based in the UK.
Number of components
Revenue
Total assets
Profit before tax
Full scope audit
Specific audit procedures
Total
4
-
4
98%
-
98%
96%
-
96%
88%
-
88%
Analytical procedures at group level were performed for the remaining 7
components. None of the full scope audits were undertaken by component
auditors.
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.
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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.
THE EXTENT TO WHICH THE AUDIT WAS CONSIDERED
CAPABLE OF DETECTING IRREGULARITIES, INCLUDING
FRAUD
Irregularities are instances of non-compliance with laws and regulations.
The objectives of our audit are to obtain sufficient appropriate audit
evidence regarding compliance with laws and regulations that have a direct
effect on the determination of material amounts and disclosures in the
financial statements, to perform audit procedures to help identify instances
of non-compliance with other laws and regulations that may have a material
effect on the financial statements, and to respond appropriately to identified
or suspected non-compliance with laws and regulations identified during
the audit.
In relation to fraud, the objectives of our audit are to identify and assess
the risk of material misstatement of the financial statements due to fraud,
to obtain sufficient appropriate audit evidence regarding the assessed risks
of material misstatement due to fraud through designing and implementing
appropriate responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight
of those charged with governance, to ensure that the entity’s operations are
conducted in accordance with the provisions of laws and regulations and
for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud, the group audit engagement team:
• obtained an understanding of the nature of the industry and sector,
including the legal and regulatory framework that the group and parent
company operate in and how the group and parent company are
complying with the legal and regulatory framework;
•
inquired of management, and those charged with governance, about
their own identification and assessment of the risks of irregularities,
including any known actual, suspected or alleged instances of fraud;
• discussed matters about non-compliance with laws and regulations
and how fraud might occur including assessment of how and where
the financial statements may be susceptible to fraud.
OTHER INFORMATION
The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information contained within the
annual report. 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.
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 course of 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 this gives rise to a material misstatement in the financial
statements themselves. 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 their 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 by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
•
the parent company financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made;
• we have not received all the information and explanations we require
for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out
on page 42, 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
56
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Independent auditor’s report to the members of Wynnstay Group Plc continued
The most significant laws and regulations were determined as follows:
Legislation / Regulation
Additional audit procedures performed by the Group audit engagement team included:
IFRS and Companies Act 2006
Review of the financial statement disclosures and testing to supporting documentation.
Completion of disclosure checklists to identify areas of non-compliance
Tax compliance regulations
Inspection of advice received from internal tax advisors
Operational regulations in
respect of the agricultural
industry
The Group is subject to animal feed legislation and fertiliser regulations. We have enquired with
management as to non-compliance with these laws and regulations and inspected legal and regulatory
correspondence, where applicable.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Revenue recognition
Management override of
controls
We performed procedures to test the operating effectiveness of the manual controls in relation to the
accuracy and existence of sales.
Transactions posted to nominal ledger codes outside of the normal revenue cycle were identified, using a
data analytic tool, investigated and tested.
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are indicative of a potential
bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside the normal
course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
http://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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Graham Bond FCA (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
20 Chapel Street
Liverpool
L3 9AG
1 February 2022
57
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2021
2021
2020
Note
£000
£000
£000
£000
Revenue
Cost of sales
Gross profit
Manufacturing, distribution and selling costs
Administrative expenses
Other operating income
Adjusted operating profit1
Intangible amortisation, goodwill impairment and share-
based payments
Non-recurring items
Group operating profit
Interest income
Interest expense
Share of profits in joint ventures accounted for using the
equity method
Share of tax incurred by joint ventures
Profit before taxation
Taxation
Profit for the year
Other comprehensive income
Items that will reclassified subsequently to profit or loss:
• net change in the fair value of cashflow hedges taken to
equity, net of tax
Other comprehensive income for the period
Total comprehensive income for the period
Basic Earnings per 25p share
Diluted earnings per 25p share
2
4
5
5
6
3
3
7
10
12
12
193
(383)
677
(105)
500,386
(432,493)
67,893
(50,072)
(7,096)
361
11,086
(477)
-
10,609
(190)
572
10,991
(2,057)
8,934
263
263
9,197
44.40p
43.53p
164
(436)
538
(100)
The notes on pages 63 to 98 form part of these financial statements. There was no other comprehensive income during the current or prior year.
1Adjusted results are after adding back amortisation of acquired intangible assets, goodwill impairment, share-based payment expense and non-recurring items.
431,398
(370,630)
60,768
(46,033)
(6,945)
351
8,141
(132)
(1,194)
6,815
(272)
438
6,981
(1,448)
5,533
-
-
5,533
27.73p
27.57p
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Consolidated and Company Balance Sheet
For the year ended 31 October 2021
Registered Number 2704051
Group
2021
£000
Note
ASSETS
NON-CURRENT ASSETS
Goodwill
Investment property
Property, plant and equipment
Right-of-use assets
Investment in subsidiaries
Investments accounted for using equity method
Intangibles
Derivative financial instruments
CURRENT ASSETS
Derivative financial instruments
Inventories
Trade and other receivables
Amounts owed by subsidiary undertakings
Loans to joint venture
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Borrowings
Lease liabilities
Derivative financial instruments
Trade and other payables
Amounts owed by subsidiary undertakings
Current tax liabilities
Provisions
NET CURRENT ASSETS
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
Trade and other payables
Derivative financial instruments
Deferred tax liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share premium
Other reserves
Retained earnings
Total Equity
13
15
16
16
17
17
14
25
25
19
20
20
18
23
23
24
25
21
22
23
24
21
25
26
27
14,322
2,372
16,746
11,043
-
3,433
236
5
48,157
320
50,550
72,511
-
3,319
19,641
146,341
194,498
(672)
(3,995)
(53)
(76,212)
-
(1,218)
(243)
(82,393)
63,948
-
(5,731)
(38)
(140)
(474)
(6,383)
(88,776)
105,722
5,075
31,600
4,131
64,916
105,722
2020
£000
14,367
2,372
17,545
11,240
-
3,611
225
-
49,360
49
34,190
55,757
-
3,889
19,980
113,865
163,225
(1,572)
(3,483)
(219)
(51,917)
-
(784)
(146)
(58,121)
55,744
-
(6,509)
(141)
-
(276)
(6,926)
(65,047)
98,178
5,013
30,637
3,525
59,003
98,178
Company
2021
£000
-
2,372
8,919
-
41,961
191
-
-
2020
£000
-
2,372
8,937
-
41,961
191
-
-
53,443
53,461
-
-
-
1,127
3,319
7
4,453
57,896
(672)
-
-
(294)
-
(84)
-
(1,050)
3,403
-
-
-
-
-
-
(1,050)
56,846
5,075
31,600
3,699
16,472
56,846
-
-
-
-
3,889
7
3,896
57,357
(1,572)
-
-
(249)
(589)
(118)
-
(2,528)
1,368
-
-
-
-
-
-
(2,528)
54,829
5,013
30,637
3,356
15,823
54,829
Steve Ellwood – Director
Paul Roberts - Director
The Company generated profit of £3,670,000 (2020: profit of £2,325,000). The financial statements were approved by the Board of Directors on 1 February 2022 and signed
on its behalf. The notes on pages 63 to 98 form part of these financial statements.
59
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Consolidated Statement of Changes in Equity
As at 31 October 2021
Group
At 31 October 2019
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
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of
the Company
At 31 October 2020
Profit for the year
Net change in the fair value of cashflow hedges taken to
equity, net of tax
Total comprehensive income for the year
Transactions with owners of the Company, recognised
directly in equity:
Shares issued during the year
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of
the Company
Share
capital
£000
4,974
Share
premium
account
£000
30,284
Other
reserves
£000
3,429
-
-
39
-
-
39
-
-
353
-
-
353
-
-
-
-
96
96
5,013
30,637
3,525
-
-
-
62
-
-
62
-
-
-
963
-
-
963
-
-
-
-
-
343
343
Cash Flow
Hedge
Reserve
£000
-
-
-
-
-
-
-
-
-
263
263
-
-
-
-
Retained
earnings
Total
£000
£000
56,261
94,948
5,533
5,533
5,533
5,533
-
(2,791)
-
392
(2,791)
96
(2,791)
(2,303)
59,003
98,178
8,934
8,934
-
263
8,934
9,197
-
(3,021)
-
1,025
(3,021)
343
(3,021)
(1,653)
At 31 October 2021
5,075
31,600
3,868
263
64,916
105,722
All amounts are derived from continuing operations.
The notes on pages 63 to 98 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 2021 Wynnstay Group Plc
Company Statement of Changes in Equity
As at 31 October 2021
Company
At 31 October 2019
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
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
At 31 October 2020
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
Dividends
Equity settled share-based payment transactions
Total contributions by and distributions to owners of the Company
Share
capital
£000
4,974
Share
premium
account
£000
30,284
Other
reserves
Retained
earnings
Total
£000
3,260
£000
£000
16,289
54,807
-
-
39
-
-
39
-
-
353
-
-
353
-
-
-
-
96
96
2,325
2,325
2,325
2,325
-
(2,791)
-
392
(2,791)
96
(2,791)
(2,303)
5,013
30,637
3,356
15,823
54,829
-
-
62
-
-
62
-
-
963
-
-
963
-
-
-
-
343
343
3,670
3,670
3,670
3,670
-
(3,021)
-
(3,021)
1,025
(3,021)
343
(1,653)
At 31 October 2021
5,075
31,600
3,699
16,472
56,846
The notes on pages 63 to 98 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
61
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Consolidated and Company Cash Flow Statement
As at 31 October 2021
Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Settlement of provision
Tax paid
Net cash generated / (used) from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Acquisition of business and assets, net of cash acquired
Acquisition of subsidiary undertakings, net of cash acquired
Decrease in short term loans to joint ventures
Dividends received from joint ventures
Dividends received from subsidiaries
Net cash (used) / generated by investing activities
Cash flows from financing activities
Proceeds from the issue of ordinary share capital
Lease payments
Repayment of borrowings
Dividends paid to shareholders
Net cash used by financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Note
33
3
3
22
16
35
35
27
24
34
11
23
Group
Company
2021
£000
10,554
193
(102)
(96)
(1,462)
9,087
340
(1,563)
(2,156)
(82)
570
753
-
(2,138)
1,025
(4,392)
(900)
(3,021)
(7,288)
(339)
19,980
19,641
2020
£000
2021
£000
19,833
(1,098)
164
(141)
(10)
(1,510)
18,336
194
(1,058)
-
(125)
524
2
-
(463)
392
(4,632)
(1,470)
(2,791)
(8,501)
9,372
10,608
19,980
55
(4)
-
(103)
(1,150)
-
(427)
-
-
570
753
3,150
4,046
1,025
-
(900)
(3,021)
(2,896)
-
7
7
2020
£000
740
85
(19)
-
(97)
709
-
(266)
-
-
524
2
2,900
3,160
392
-
(1,470)
(2,791)
(3,869)
-
7
7
The cashflow movements for 2020 for both the Group and the Company have been adjusted to reflect the incorrect treatment of the repayment in
short term loans to joint ventures which has been reclassified from cash generated from operations to cashflows from investing activities.
The notes on pages 63 to 98 form part of these financial statements.
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
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 Eagle House,
Llansantffraid Ym Mechain, Powys, SY22 6AQ. 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 accounting standards, in conformity with the
requirements of the Companies Act 2006. 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 International
Accounting Standards and the requirements of the Companies Act
2006 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
The Directors have prepared the financial information presented for
Group and Company on a going concern basis having considered the
principal risks to the business and the possible impact of plausible
downside trading scenarios. The Board have concluded that they
have a reasonable expectation that the entity has adequate resources
to continue in operational existence for the foreseeable future, and
that the going concern assumption is appropriate. The impact of
the Covid-19 pandemic has been considered and while the situation
continues to evolve, the likely effect on sales, profits and cashflows is
considered unlikely to be significant.
The Group’s business activities, together with the factors likely to
affect its future development, performance and position are set out
in the Strategic report on pages 3 to 31. The financial position of the
Group and the principal risks and uncertainties are also described in
the Strategic report.
The Group has a sound financial base and forecasts that show
profitable trading and sufficient cash flow and resources to meet the
requirements of the business, including compliance with banking
covenants and on-going liquidity. In assessing their view of the likely
future financial performance of the Group, the Directors consider
industry outlooks from a variety of sources, and various trading
scenarios. This analysis showed that the Group is well placed to
manage its business risks successfully despite the current uncertain
economic outlook with regards to the on-going Coronavirus outbreak.
More detail on outlook is contained within the Strategic Report on
page 3-31.
In conclusion, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for
the foreseeable future. Thus, they continue to adopt the going concern
basis of accounting in preparing the annual financial statements.
COVID-19
The Covid-19 outbreak occurred during the previous financial
reporting period and continues to evolve. Wynnstay is classified as
operating in an essential key industry, and as such has been able to
generally continue activities throughout the crisis, while at all times
adhering with appropriate government guidance and regulation. The
most significant initial impact on trading was in the depots within the
63
Specialist Agricultural Merchanting segment, which for safety reasons
moved to an order and collect trading policy for part of the previous
financial year. The situation remains fluid and further modifications
to trading practices may be required in the future, depending on
the prevailing local conditions, and availability of colleague resource.
However, the resilient trading experience through the crisis to date
provides confidence that Group can continue to operate positively and
profitably under reasonably foreseeable restrictions are highlighted:
The Group has reviewed any potential impairment indicators of both
financial and non-financial assets (in accordance with IAS 36 and
IFRS 9 in particular), especially where operations have suffered due
to COVID-19.
As detailed in the Strategic report, the Group benefits from a wide
customer base, which the Group considers provides greater financial
security over the balances held within financial assets.
The practical expedient available from the endorsed amendment
to IFRS 16 – ‘COVID-19-Related Rent Concessions’ has not been
utilised on the basis that it is not relevant to the Group.
BASIS OF CONSOLIDATION
The Group’s consolidated financial statements incorporate the finan-
cial 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 follow-
ing elements are present: power over the investee, exposure to varia-
ble 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 practi-
cal ability to direct the relevant activities of the investee without holding
the majority of the voting rights. In determining whether de- facto con-
trol 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 com-
pany 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 busi-
ness 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 ac-
quisition date. The fair value of deferred and contingent consideration
is assessed using management judgement to reflect the likelihood of
the pertinent matters being achieved. The results of acquired oper-
ations are included in the consolidated statement of comprehensive
income from the date on which control is obtained. They are decon-
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 solidated 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. In the Company financial
statements, investments in subsidiaries, joint ventures and associates
are accounted for at cost.
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 nu-
tritional content of silage samples), the majority of the 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. All revenue is derived from UK operations. The Group uses two
main operating segments which relate how our customers purchase
products, as described below:
Agriculture
For feed, seed, fertiliser and other agricultural products sold in bulk
to farmer customers, revenue is recognised on collection by, or deliv-
ery to, the customer and the Group had evidence that all criteria for
aceptance 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.
GRANT INCOME
Government grants are recognised in profit or loss on a systematic
basis over the periods in which the Group recognises expenses for
the related costs for which the grants are intended to compensate,
which in the case of grants relates to asset set where the grant is
treated as deferred income or by deducting it from the carrying
amount of the asset. The Group only recognises grant income when
the performance conditions for receiving the grant are met and there
is a more than 50% likelihood that the grant will not require repayment
in a subsequent period.
FINANCE INCOME
Finance income is recognised when it is probable that the econom-
ic benefits will flow to the Group and the amount of revenue can be
measured reliably. Finance income is accrued on a time basis, by ref-
erence to the principal outstanding and at the effective interest rate
applicable.
AMORTISATION OF INTANGIBLE ASSETS, SHARE-BASED PAYMENTS
AND NON-RECURRING EXPENSE 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 page 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 deferred and contingent consideration for
prior period business combinations and asset impairments including
impairment of goodwill.
EMPLOYMENT BENEFIT COSTS
The Group operates a defined contribution pension scheme. Contri-
butions to this scheme are charged to the Group Statement of Com-
prehensive Income as they are incurred, in accordance with the rules
of the scheme.
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 property held to earn rentals and/or for capital appreciation,
is initially measured at cost and subsequently stated at fair value at
the reporting date, as determined by the directors and is periodically
supported by external valuers. Gains or losses arising from changes
in the fair value of investment property are recognised in the income
statement in the period in which they arise.
Gains or losses on disposal of an investment property are recognised
in the income statement on the unconditional completion of the sale.
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 building and right of use assets is over the
period of the lease;
• plant and machinery and office equipment 10% - 33% per annum
straight line; and
• motor vehicles 20% - 30% per annum straight line.
If the expenditure provides incremental future benefits so that it improves
the earning capacity or extends the life of the non-current asset beyond
its originally intended useful economic life, then it is treated as capital
expenditure. This is usually the case with non-climate compliant assets
where the Group seeks to modify appropriate assets where possible
as it works towards its zero-carbon footprint commitment which is
detailed in the strategic report. Climate uncertainty does not have a
material impact on the assessment of useful lives as the assets are
considered to be fit for purpose over the assessed useful economic
lives with reasonable repairs and maintenance.
The impact of historical climate related incidents indicates that any
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Principal Accounting Policies continued
financial impact on physical assets, including adapting them for use
is addressed by our existing capital programme. Major renovations
are depreciated over the remaining useful life of the related asset or
to the date of the next major renovation, whichever is sooner. Gains
and losses on disposals are calculated by comparing proceeds with
carrying amount and are included in the income statement.
INTANGIBLE ASSETS
Following initial recognition of an intangible asset, the cost model is
applied requiring the asset to be held at cost less any accumulated
amortisation and impairment. Amortisation begins when the asset is
ready for use.
This type of expenditure primarily relates to internally developed, com-
puter operating and financial software and website projects for the
Group and are amortised on a straight-line basis over their useful eco-
nomic lives of three to seven years.
The cost of an intangible asset acquired in a business combination is
its fair value at its acquisition date.
FINANCIAL INSTRUMENTS
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instru-
ment.
Financial assets are derecognised when the contractual rights to the
cash flows from the financial asset expire, or when the financial asset
and substantially all the risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged, cancelled
or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant
financing component and are measured at the transaction price in ac-
cordance with IFRS 15, all financial assets are initially measured at fair
value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging
instruments, are classified into the following categories:
• amortised cost
•
fair value through profit or loss (FVTPL)
•
fair value through other comprehensive income (FVOCI).
The classification is determined by both:
•
the entity’s business model for managing the financial asset
requirements apply (see below).
Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking informa-
tion to recognise expected credit losses – the ‘expected credit loss
(ECL) model’.
Instruments within the scope of the new requirements included loans
and other debt-type financial assets measured at amortised cost and
FVOCI, trade receivables, contract assets recognised and measured
under IFRS 15 and loan commitments and some financial guarantee
contracts (for the issuer) that are not measured at fair value through
profit or loss.
Recognition of credit losses is no longer dependent on the Group first
identifying a credit loss event. Instead, the Group considers a broader
range of information when assessing credit risk and measuring expect-
ed credit losses, including past events, current conditions, reasonable
and supportable forecasts that affect the expected collectability of the
future cash flows of the asset.
In applying this forward-looking approach, a distinction is made be-
tween:
• financial instruments that have not deteriorated significantly in
credit quality since initial recognition or that have low credit risk
(‘Stage 1’);
• financial instruments that have deteriorated significantly in credit
quality since initial recognition and whose credit risk is not low
(‘Stage 2’); and
• financial assets that have objective evidence of impairment at the
reporting date (‘Stage 3’).
‘12-month expected credit losses’ are recognised for the first category
while ‘lifetime expected credit losses’ are recognised for the second
category.
Measurement of the expected credit losses is determined by a prob-
ability-weighted estimate of credit losses over the expected life of the
financial asset. For large one-off balances where there is no histori-
cal experience, analysis is completed in respect of several reasonably
possible scenarios.
Other 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 Group has specifically elected
to present fair value changes are then shown in ‘other comprehensive
income’. Cost is used as an appropriate estimate of the fair value for
investments where in limited cases there is insufficient, recent informa-
tion available to measure fair value.
•
the contractual cash flow characteristics of the financial asset.
Trade and other receivables and loans to joint ventures
Subsequent measurement of financial assets
Financial assets and liabilities at amortised cost
Financial assets are measured at amortised cost if the assets meet the
following conditions (and are not designated as FVTPL):
•
•
they are held within a business model whose objective is to hold
the financial assets and collect its contractual cash flows
the contractual terms of the financial assets give rise to cash
flows that are solely payments of principal and interest on the
principal amount outstanding
Financial assets at fair value through profit or loss (FVTPL)
Trade receivables are initially recognised at their transaction price.
When a trade receivable is uncollectible, it is written off against the
impairment provision for trade receivables. Subsequent recoveries of
amounts previously written off are credited against costs in the income
statement. Short-term trade receivables do not carry any interest and
are stated at their amortised cost, as reduced by appropriate allow-
ances for estimated irrecoverable amounts.
The Group makes use of a simplified approach in accounting for trade
and other receivables and records the loss allowance as lifetime ex-
pected credit losses. These are the expected shortfalls in contractual
cash flows, considering the potential for default at any point during the
life of the financial instrument.
Financial assets that are held within a different business model other
than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair
value through profit and loss. Further, irrespective of business model
financial assets whose contractual cash flows are not solely payments
of principal and interest are accounted for at FVTPL. All derivative
financial instruments fall into this category, except for those designated
and effective as hedging instruments, for which the hedge accounting
The Group uses its historical experience, external indicators and for-
ward-looking information to calculate the expected credit losses.
The Group assess impairment of trade receivables on a collective ba-
sis where they possess shared credit risk characteristics, they have
been grouped based on sector industry global default rates. Refer to
Note 13 for a detailed analysis of how the impairment requirements of
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IFRS 9 are applied.
The assessment of impairment for trade receivables can either be in-
dividually or collectively and is based on how an entity manages its
credit risk. As the Group has a small number of receivables with large
value and these receivables are managed on an account basis (i.e.
individually) it is therefore not appropriate to base the impairment on
a provision matrix as such a matrix would unlikely be in line with the
expected credit loss of the individual receivable.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered. An equity in-
strument is any contract that provides a residual interest in the assets
of a business after deducting all other liabilities. Equity instruments is-
sued by the Group are recorded as the proceeds received, net of direct
issue costs.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other
payables, derivative financial instruments and financial lease liabilities.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated
a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost
using the effective interest method except for derivatives and financial
liabilities designated at FVTPL, which are carried subsequently at
fair value with gains or losses recognised in profit or loss (other than
derivative financial instruments that are designated and effective as
hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument’s fair value that are reported in profit or loss are included
within finance costs.
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.
Prepaid fees in relation to issuance of debt are held on the statement
of financial position on the basis that such issuance is considered
probable. If issues do not occur, or are deemed not to be probable,
such fees are recognised in the income statement.
Financial guarantees
The Group enters into financial guarantees with its subsidiaries. These
guarantees are accounted for as insurance contracts.
Trade and other payables
Trade and other payables are non-interest bearing and are stated at
their fair value and subsequently measured at amortised cost using the
effective interest method.
Derivative financial instruments
Derivative financial instruments are used to manage exposure to
market risks. The principal derivative instruments used by Wynnstay are
foreign exchange forward contracts and futures. The Group does not
hold or issue derivative financial instruments for trading or speculative
purposes. Derivative financial assets and liabilities are measured at fair
value. Changes in the fair value of any derivative instruments that do
not qualify for hedge accounting are recognised immediately in the
income statement.
Hedge accounting
Derivatives designated as hedging instruments are classified at
inception of hedge relationship as cash flow hedges. Changes in
the fair value of derivatives designated as cash flow hedges are
recognised in other comprehensive income to the extent that the
hedges are effective. Ineffective portions are recognised in profit or
loss immediately. Amounts deferred in other comprehensive income
are reclassified to the income statement when the hedged item affects
profit or loss.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or
loss existing in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in the income
statement. When or if a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in equity is
immediately transferred in full to the income statement.
Accounting for changes in credit risk
Accounting standards require that the fair value of financial instruments
reflects their credit quality and also changes in credit quality where
there is evidence that this has occurred. The credit risk associated
with the Group’s derivatives is reviewed at Treasury Management
Committee meetings monthly where the impact is not material, due to
the Group strong financial position.
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, invento-
ries are valued using the first-in-first-out method. Net realisable value
represents the estimated selling price less all estimated costs to com-
pletion and costs to be incurred in marketing, selling and distribution.
CASH AND CASH EQUIVALENTS
For the purposes of the Statement of financial position, cash and cash
equivalents comprise cash at bank, cash in hand, money market funds
and short-term deposits with an original maturity of three months or
less. For the Consolidated statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
LEASES
Group as a lessee, accounts for all leases by recognising a right-of-use
asset and a lease liability. At inception, the Group assess whether the
contract contains a lease or is a lease. A lease is determined when the
contract conveys the right to control an identified asset for a period of
time in exchange for consideration. The Group recognises a right-of-
use asset and a corresponding lease liability for all lease agreements
in which the Group is the lessee at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises
the initial lease liability adjusted for any lease payment made at or
before the commencement date, plus any indirect initial costs incurred
and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less
any lease incentives received.
The right-of-use assets are then subsequently depreciated using
the straight-line method or reducing balance method from the
commencement date to the earlier of the lease term or useful life of
the underlying asset. Right-of-use assets are reviewed for indicators
of impairment.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted at
the rate implicit in the lease, or, if the rate cannot be determined, the
Group’s incremental borrowing rate.
The incremental borrowing rate is based on the (i) reference rate, (ii)
financing spread and (iii) lease specific adjustments. The reference rate
is based on the UK Nominal Gilts aligned with the tenor of the lease
observed at the time of signing the contract. The financing spread
is based on the term of the debt, level of indebtedness, entity and
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
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Principal Accounting Policies continued
economic environment. The lease specific adjustment is required if the
term of the lease is out of the norm.
Lease payments included in the measurement of lease liabilities
includes the following:
• Fixed payments including in-substance fixed payments;
• Variable lease payments that depend on an index or rate, initially
measured using the index or rate at the commencement date;
and
• The amount expected to be payable by the lessee under residual
value guarantees
The Group remeasures the lease liability when there is a change in
the future lease payments arising from a change in rate or index or,
a modification to the lease that is not accounted for as a separate
lease. In the latter case, the lease liability is remeasured by using a
revised discount rate. When the lease liability has been remeasured, a
corresponding adjustment is made to the carrying amount of the right-
of-use asset or is recorded in the profit or loss account if the carrying
amount of the right-of-use asset has been reduced to zero.
The Group has opted not to recognise right-of-use assets and lease
liabilities for low value assets and short-term leases (defined as a lease
with a lease term of 12 months or less). Instead, the lease payments
are recognised as an operating expense on a straight-line basis over
the length of the lease term or on a systematic basis.
of the expenditure required to settle the obligation at the reporting date
and are discounted, where material, to present value using a current,
pre-tax rate that reflects, where appropriate, the risks specific to the
liability.
A restructuring provision is recognised when the Group has developed
a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by
starting to implement the plan or announcing its main features to those
affected by it. The measurement of a restructuring provision includes
only the direct expenditures arising from the restructuring, which are
those amounts that are both necessarily entailed by the restructuring
and not associated with the ongoing activities of the entity.
SHARE CAPITAL
Ordinary shares are classified as equity and are recorded at the par
value of proceeds received, net of direct issue costs, allowing for any
reductions in the par value. Where shares are issued above par value,
the proceeds in excess of par value are recorded in the share premium
account.
DIVIDEND DISTRIBUTION
A dividend distribution to the Company’s shareholders is recognised as
a liability in the Group’s financial statements in the period in which the
shareholders’ right to receive payment of the dividend is established.
CURRENT AND DEFERRED INCOME TAX
FOREIGN CURRENCY
The consolidated financial statements are presented in Sterling, which
is the parent company’s functional currency.
Transactions denominated in foreign currencies are initially recorded in
the entity’s functional currency using the exchange rates prevailing at
the dates of transactions. Monetary assets and liabilities denominated
in foreign currencies are retranslated into Sterling at the rates of
exchange ruling at the reporting date. Differences arising on translation
are charged or credited to the income statement.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The Group makes certain estimates and assumptions regarding the
future. These 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, however we believe these are not
significant nor likely to cause a material adjustment to the carrying
amount of assets and liabilities within the next financial year.
The tax charge/credit for the year comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent that it
relates to items recognised directly in other comprehensive income. In
this case, the tax is recognised in other comprehensive income.
Current tax assets and current tax liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted at the reporting date.
Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject
to interpretation. Group relief claimed/surrendered between UK
companies is paid for at the applicable tax rate of 19% (2020: 19%)
for the year.
Deferred income taxation 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’s financial
statements, at rates expected to apply when they reverse, based on
current tax rates and law. Deferred income taxation is not provided on
the initial recognition of an asset or liability in a transaction, other than a
business combination, if at the time of the transaction there is no effect
on either accounting or taxable profit or loss.
Deferred income tax assets are recognised to the extent that there are
future taxable temporary differences from the unwind of the deferred
income tax liabilities, against which these deductible temporary
differences can be utilised or other future taxable profits. Deferred tax
assets and liabilities are not discounted. Deferred income taxation is
determined using the tax rates and laws that have been enacted, or
substantively enacted during the year and are expected to apply in the
periods in which the related deferred tax asset or liability is reversed.
No material uncertain tax positions exist as at 31 October 2021.
DEFERRED INCOMEl
Amounts received prior to the delivery of goods and services are
recorded as deferred income and released to the income statement
as they are provided.
PROVISIONS
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are measured at the best estimate
67
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 Notes to the Financial Statements
For the year ended 31 October 2021
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 and disclosures
a) New standards, interpretations and amendments effective from 1 January 2021
New standards impacting the Group adopted in the annual financial statements for the year ended 31 October 2021, and which have given rise
to changes in the Group’s accounting policies but have not had any significant impact on adoption are as follows:
•
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (issued on 26 September 2019)
1 January 2020
•
Amendments to IAS 1 and IAS 8: Definition of Material (issued on 31 October 2018)
1 January 2020
•
Amendments to References to the Conceptual Framework in IFRS Standards (issued on 29 March 2018)
1 January 2020
•
Amendments to IFRS 3 Business Combinations (issued on 22 October 2018)
1 January 2020
•
Amendments to IFRS 16 Leases: Covid 19-Related Rent Concessions (issued on 28 May 2020)
1 June 2020
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect
the current or future periods.
b) New accounting pronouncements, that are not yet effective and have not been adopted early by the Group, to be adopted on or after 1
January 2022
•
Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 9 (issued on 25 June 2020)
1 January 2021
•
•
•
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (issued
on 27 August 2020)
1 January 2021
Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 30 June 2021 (issued on 31 March
2021)
1 April 2021
Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions,
Contingent Liabilities and Contingent Assets; and Annual Improvements 2018-2020 (All issued 14 May 2020)
1 January 2022
•
Amendments to IFRS 17 Insurance Contracts
1 January 2023
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The 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.
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Notes to the Financial Statements continued
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.
The segment results for the year ended 31 October 2021 are as follows:
Year ended 31 October 2021
Revenue from external customers
Segment result
Group operating profit before non-recurring items
Share of results of joint ventures before tax
Non-recurring items
Interest income
Interest expense
Profit before tax from operations
Income taxes (includes tax of joint ventures)
Profit for the year attributable to equity shareholders from operations
Other information :
Depreciation and amortisation
Fixed asset additions
Segment assets
Segment liabilities
Add corporate net cash (note 23)
Less corporate tax liabilities
Net Assets
Included in segment assets above are the following investments in
joint ventures and associates
Specialist
Agricultural
Merchanting
Agriculture
£000
£000
358,961
141,425
3,697
524
4,221
7,120
33
7,153
3,463
3,760
101,812
(56,547)
2,676
2,094
66,237
(20,139)
Other
£000
-
(208)
120
(88)
-
-
6,808
-
2,386
115
840
Total
£000
500,386
10,609
677
11,286
-
193
(383)
11,096
(2,162)
(8,934)
6,139
5,854
174,857
(76,686)
98,171
9,243
(1,692)
105,722
3,341
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The segment results for the year ended 31 October 2020 are as follows:
Year ended 31 October 2020
£000
£000
Specialist
Agricultural
Merchanting
Agriculture
Other
£000
Total
£000
302,580
128,807
11
431,398
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
Other Information:
Depreciation and amortisation
Fixed asset additions
Segment assets
Segment liabilities
Add corporate net cash (note 23)
Less corporate tax liabilities
2,411
471
2,882
5,728
53
5,781
(130)
14
(116)
3,548
2,510
78,265
(34,401)
2,630
1,505
57,708
(18,022)
-
-
7,272
-
Net Assets
Included in segment assets above are the following investments in
joint ventures and associates
2,711
91
719
3. FINANCE COSTS
Interest expense:
Interest payable on borrowings
Interest payable on leases
Interest receivable
Net finance costs
4. OTHER OPERATING INCOME
Rental income
2021
£000
(102)
(281)
(383)
193
(190)
2021
£000
361
8,009
538
8,547
(1,194)
164
(436)
7,081
(1,548)
5,533
6,178
4,015
143,245
(52,423)
90,822
8,416
(1,060)
98,178
3,521
2020
£000
(141)
(295)
(436)
164
(272)
2020
£000
351
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
5. AMORTISATION OF TANGIBLE ASSETS, IMPAIRMENT OF GOODWILL, SHARE-BASED PAYMENTS AND NON-RECURRING EXPENSE ITEMS
Amortisation of acquired
impairment and share-based payments
intangible assets, goodwill
Amortisation of intangibles
Impairment of goodwill
Cost of share-based reward
Non-recurring items
Business re-organisation costs
Goodwill and Investment impairment
Huyton depot closure costs
Decommissioning of Selby seed plant
Non-recurring items in 2020 consisted of:
2021
£000
39
95
343
477
-
-
-
-
-
2020
£000
36
-
96
132
185
601
256
152
1,194
• Business re-organisation costs relate to the redundancy related expenses of colleagues leaving the business as a result of re-organising
operations during the prior year;
• The goodwill impairment relates to the GrainLink cash generating unit, see note 13;
• Huyton depot store closure costs comprise redundancy costs and costs associated with exiting the leased premises; and
• Decommissioning of Selby seed plant relates to the costs of vacating a leased property and transferring the plant and machinery to a new
location.
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:
Amortisation of right-of-use assets
Amortisation of intangibles
Fair value changes on derivative financial instruments
Hedge ineffectiveness for the period
(Profit) on disposal of fixed assets
(Profit)/ Loss on disposal of right-of-use asset
Other operating lease rentals payable
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
2021
£000
31,085
431,423
2,165
3,974
39
23
114
(86)
(14)
205
2021
£000
119
2020
£000
30,031
363,446
2,290
3,888
36
395
-
(142)
25
244
2020
£000
99
Included in the Group audit fee are fees of £25,000 (2019: £5,304) 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 joint ventures
Total share of post-tax profits of joint ventures
71
2021
£000
572
572
2020
£000
438
438
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 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
2021
£000
27,053
2,672
1,017
343
31,085
The average number of employees, including Directors, employed by the Group during the year was as follows:
Administration
Production
Sales, distribution and depots
2021
No.
106
143
661
910
2020
£000
26,384
2,442
1,109
96
30,031
2020
No.
104
141
654
899
The parent company did not have any employees in the current or prior year other than directors who are remunerated by other Group companies.
9. DIRECTORS’ REMUNERATION
Directors’ emoluments
Social security costs
Company contributions to money purchase pension schemes
Aggregate gains made on the exercise of Approved CSOP options
2021
£000
854
97
37
18
1,006
2020
£000
772
92
50
-
914
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.
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Name of Director
Executives
Gareth Davies
Paul Roberts
Andrew Evans (retired from the Board 1 December 2020)
Non-Executives
Jim McCarthy (retired from the Board 31 July 2021)
Steve Ellwood (appointed Chairman 1 March 2021)
Philip Kirkham
Howell Richards
Catherine Bradshaw (appointed to the Board 1 July 2021)
2021
£000
327
254
86
35
56
41
40
15
854
2020
£000
250
203
165
50
34
35
35
-
772
72
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
9. DIRECTORS’ REMUNERATION continued
Retirement benefits are accruing to the following number of directors under:
Money purchase pension scheme
Contribution paid by the Group to money purchase pension schemes in respect of such directors were:
Gareth Davies
Paul Roberts
Andrew Evans
Gains made on the exercise of approved share options schemes in respect of such directors were:
Gareth Davies
Paul Roberts
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
- other temporary and deductible differences
Total deferred tax
Total tax charge for the year
2021
£000
1,901
(4)
1,897
57
103
160
2,057
2021
No.
3
2021
£000
20
16
1
37
2021
£000
9
9
18
2020
No.
3
2020
£000
20
16
14
50
2020
£000
-
-
-
2020
£000
1,496
(73)
1,423
165
(140)
25
1,448
Factors affecting tax charge for the year
The tax assessed for the year is lower (2020: higher) than the standard rate of Corporation Tax in the UK applicable to the Group 19% (2020:
19%) and is explained as follows:
Current tax
Profit on activities before tax
Profit on activities multiplied by standard rate of corporation tax in
the UK of 19.00% (2019: 19.00%)
Effects of:
Tax effect of share of profit of joint ventures and associates
Expenses not deductible for tax purposes
Adjustment to tax charge in respect of prior years
Accelerated capital allowances
Movement on unrecognised deferred tax
Total tax charge for year
Factors that may affect future tax charges
2021
£000
10,991
2,088
(109)
3
(4)
57
22
2,057
2020
£000
6,981
1,326
(83)
137
(73)
-
141
1,448
In the Budget in March 2021, the Chancellor announced that the main rate of Corporation Tax will rise from 19% to 25% with effect from April
2023 and if fully enacted this will increase the Group’s future tax charge accordingly.
73
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 11. DIVIDENDS
Final dividend paid for prior year
Interim dividend paid for current year
2021
£000
2,007
1,014
3,021
2020
£000
1,870
921
2,791
Subsequent to the year end it has been recommended that a final dividend of 10.50p per ordinary share (2020: 10.00p) be paid on 29 April 2022.
Together with the interim dividend already paid on 29 October 2021 of 5.00p net per ordinary share (2020: 4.60p) this will result in a total dividend
for the financial year of 15.50p net per ordinary share (2020: 14.60p).
12. EARNINGS PER SHARE
Earnings attributable to shareholders (£000)
Basic earnings per share
Diluted earnings per share
2021
8,934
2020
5,533
2021
8,934
2020
5,533
Weighted average number of shares in issue during the year (number ‘000)
20,120
19,952
20,524
20,070
Earnings per ordinary 25p share (pence)
44.40
27.73
43.53
27.57
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) taking into account their exercise price in comparison with the actual average share price during the year.
2021
2020
Weighted average
Earnings
number of shares
(number ‘000)
Earnings per ordinary 25p share (pence)
Effect of dilutive securities
Share options
Diluted Earnings per ordinary 25p share
(pence)
8,934
-
8,934
20,120
404
20,524
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Earnings per
Earnings
Weighted average
number of shares
(number ‘000)
Earnings
per share
share
44.40
(0.87)
5,533
-
19,952
27.73
118
(0.16)
43.53
5,533
20,070
27.57
74
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
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.
Group
Cost
At 1 November 2019
Impairment Charged
At 31 October 2020
Additions- Business Combination
Impairment Charged
At 31 October 2021
£000’s
Cost
16,276
-
16,276
50
-
16,326
£000’s
Impairment
£000’s
Net book value
(1,308)
(601)
(1,909)
-
(95)
14,968
(601)
14,367
50
(95)
(2,004)
14,322
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 cashflows to be achieved
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.
Annual 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 each CGUs is Glasson
£786,000 (2020: £881,000), Agricultural Supplies £9,930,000 (2020:
£9,880,000) and Grainlink £3,606,000 (2020:£3,606,000).
The pre-tax discount rates used to calculate value in use for all CGUs
was 7.35% (2020: 9.2%) and was derived from the Group’s weighted
average cost of capital taking into account any specific risks relating to
each CGU.
The forecasts are extrapolated based on estimated long-term average
growth rates of 2.0% (2020: 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 for 2021. The impairment within the Agricultural
segment during the year of £95,000 is the carrying goodwill held within
Glasson Grain Ltd relating to Horti Stores, which was acquired in 2015
and which ceased trading during the year. In 2020 the impairment tests
for the GrainLink CGU within the Agricultural segment, highlighted an
impairment charge of £601,000 which was recognised.
75
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 14. INTANGIBLE ASSETS
Cost
Balance as at 1 November 2019
Additions
At 31 October 2020
Additions- Business Combination
At 31 October 2021
Aggregate amortisation
Balance at 1 November 2019
Charge for the year
At 31 October 2020
Charge for the year
At 31 October 2021
Net book value At 31 October 2021
Net book value At 31 October 2020
Customer order books
£000
Trademarks
£000
Total
£000
345
-
345
50
395
92
34
126
37
163
232
219
10
-
10
-
10
2
2
4
2
6
4
6
355
-
355
50
405
94
36
130
39
169
236
225
76
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
15. INVESTMENT PROPERTY
Fair value
Group
At 1 November 2019, 31 October 2020 and 31 October 2021
Company
£000
2,372
At 1 November 2019, 31 October 2020 and 31 October 2021
2,372
Investment property relates to a redeveloped retail property in Pwllheli which the Group continues to actively market for sale. The amount of rent
receivable from the Investment property was £205,000 (2020: £196,000). Direct operating expenses associated with this investment property
amounted to £18,206 in the year (2020: £10,985).
Investment property valuations have been conducted by Management where a review of the property is undertaken to ensure the correct
assumptions and inputs have been used. The assumptions used in the valuation techniques are all classified as level 3 categories. Level 3 inputs
are based on unobservable inputs which relate to discounted cash flow technique using an appropriate asset discount rate including growth rates
for the relevant revenues and costs.
Increase/(decrease) in asset valuation
£000
6
(6)
90
(87)
(5)
5
(298)
391
Investment property – Base revenue
+1.0%
-1.0%
Investment property – Revenue growth
+1.0%pa
-1.0% pa
Investment property – Operating costs growth
+1.0%pa
-1.0% pa
Investment property – Discount rate
+1.0%
-1.0%
77
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
16. PROPERTY, PLANT AND EQUIPMENT
Leasehold land
and buildings
£000
Freehold land
and buildings
£000
Plant,
machinery
and office
equipment
£000
Motor
vehicles
£000
Right-of-use
assets
£000
Group
Cost
At 1 November 2019
Additions
Acquisitions
Disposals
1,249
49
-
-
15,272
235
-
-
At 31 October 2020
1,298
15,507
Additions
Acquisitions- Business Combination
Disposals
At 31 October 2021
Depreciation
At 1 November 2019
Charge for the year
On disposals
At 31 October 2020
Charge for the year
On disposals
At 31 October 2021
Net book value at 31 October 2021
Net book value at 1 November 2020
153
-
(149)
1,302
330
84
-
414
102
(52)
464
838
884
333
-
-
15,840
5,662
370
-
6,032
388
-
22,652
4,860
833
-
(417)
23,068
989
-
(333)
23,724
15,387
1,424
(415)
16,396
1,441
(287)
67
-
(1,065)
3,862
88
-
(816)
3,134
3,950
412
(1,014)
3,348
234
(762)
2,820
14,310
2,831
-
(74)
17,067
4,050
241
(588)
20,770
1,988
3,888
(49)
5,827
3,974
(74)
9,727
6,420
17,550
9,420
9,475
6,174
6,673
314
513
11,043
11,240
Total
£000
58,343
4,015
-
(1,556)
60,802
5,613
241
(1,886)
64,770
27,317
6,178
(1,478)
32,017
6,139
(1,175)
36,981
27,789
28,785
78
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
16. PROPERTY, PLANT AND EQUIPMENT continued
Company
Cost
At 1 November 2019
Additions
At 31 October 2020
Additions
At 31 October 2021
Depreciation
At 1 November 2019
Charge for the year
At 31 October 2020
Charge for the year
At 31 October 2021
Net book value at 31 October 2021
Net book value at 31 October 2020
Leasehold land and
buildings
£000
Freehold land and
buildings
£000
13,739
227
13,966
99
14,065
5,060
349
5,409
78
5,487
8,577
8,557
636
28
664
328
992
220
64
284
366
650
342
380
Total
£000
14,375
255
14,630
427
15,057
5,280
413
5,693
444
6,137
8,919
8,937
79
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 17. FIXED ASSET INVESTMENTS
Group
Cost
At 1 November 2019
Share of profit or investment income
Dividend distribution
At 31 October 2020
Share of profit or investment income
Revaluation of investment
Dividend distribution
At 31 October 2021
Provision for impairment
At November 2020 and 31 October 2021
Net book value at 31 October 2021
Net book value at 31 October 2020
Company
Cost
At 1 November 2020
At 31 October 2020 and 2021
Provision for impairment
At 1 November 2020
At 31 October 2020 and 2021
Net book value at 31 October 2021
Net book value at 31 October 2020
Joint Ventures
& Associates
£000
Other unlisted
investments
£000
3,086
438
(2)
3,521
572
-
(753)
3,341
-
3,341
3,521
90
-
-
90
-
2
-
92
-
92
90
Share in group
undertakings
Joint Ventures &
Associates
£000
£000
42,562
42,562
(601)
(601)
41,961
41,961
191
191
-
-
191
191
Total
£000
3,175
438
(2)
3,611
572
2
(753)
3,433
-
3,433
3,611
Total
£000
42,753
42,753
(601)
(601)
42,152
42,152
80
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ANNUAL REPORT AND ACCOUNTS 2021 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 Limited Glasson Grain Limited
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
81
2021
£000
713
6,339
(3,860)
(21)
3,171
2020
£000
721
5,407
(2,702)
(4)
3,422
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 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
2021
£000
20,147
(19,470)
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
2021
£000
677
2020
£000
16,907
(16,369)
2020
£000
538
ASSOCIATE
The interest in associates is represented by the following limited company, which is 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
2021
£000
285
(162)
123
41
-
-
-
2020
£000
407
(284)
123
41
-
-
-
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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 2021
31 August 2021
31 October 2021
31 January 2021
82
ANNUAL REPORT AND ACCOUNTS 2021 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:
Loans
Amounts due to subsidiary undertakings:
Loans
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
Trade payables
Transactions reported in the statement of comprehensive income:
Revenue
Purchases
Company
2021
£000
1,127
1,127
-
-
444
159
Group
Company
2021
£000
1,268
3,319
4,587
(2)
(2)
6,254
(139)
2020
£000
427
3,889
4,316
(5)
(5)
5,467
(139)
2021
£000
-
3,319
3,319
-
-
-
-
2020
£000
-
-
590
590
413
192
2020
£000
-
3,889
3,889
-
-
-
-
83
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 19. INVENTORIES
Raw materials and consumables
Finished goods and goods for resale
Group
2021
£000
13,837
36,713
50,550
2020
£000
5,994
28,196
34,190
Company
2021
£000
-
-
-
Inventories are stated after a provision for impairment of £400,000 (2020: £380,000) (Company £nil (2020: £nil)).
£1,777,000 of inventories relates to the acquisition during year which is inclusive of the total year end balance. See Note 35.
20. TRADE AND OTHER RECEIVABLES
Current
Amounts owed by subsidiary undertakings
Trade receivables, net of loss allowance
Prepayments and accrued income
Other receivables
Group
2021
£000
-
70,320
1,161
1,030
72,511
2020
£000
-
53,465
1,702
590
55,757
Company
2021
£000
1,127
-
-
-
1,127
2020
£000
-
-
-
2020
£000
-
-
-
-
-
The carrying value of trade and other receivables classified at amortised cost approximates to their fair value. No receivables are pledged as
collateral or sold to discounting or debt factoring services. Assets in the course of construction had a value of £627,000 (2020: £165,000) included
within Other Receivables.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based
on similar credit risk and aging. The contract assets have similar risk characteristics to the trade receivables for similar types of contracts.
The expected loss rates are based on the Group’s historical credit losses experienced over the three-year period prior to the period end. The
historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group’s customers. The
Group has identified the gross domestic product (GDP), unemployment rate and inflation rate as the key macroeconomic factors in the UK.
If the expected credit loss was to increase or decrease by 50 basis points the impact on the income statement would be £36,000 loss or gain,
respectively.
The lifetime expected loss provision for trade receivables is as follows:
31 October 2021
Expected loss rate
Gross carrying amount
Loss provision
Trade receivables, net of loss allowance
31 October 2020
Expected loss rate
Gross carrying amount
Loss provision
Trade receivables, net of loss allowance
Current
£000
More than 30
days past due
£000
More than 60
days past due
£000
More than 120
days past due
£000
0.22%
45,643
(100)
45,543
Current
£000
0.22%
34,157
(74)
34,083
0.62%
12,977
(80)
12,897
1.32%
19.60%
8,879
(117)
8,762
3,878
(760)
3,118
More than 30
More than 60
More than 120
days past due
days past due
days past due
£000
£000
£000
0.62%
10,147
(63)
10,084
1.33%
4,064
(54)
4,010
8.67%
5,790
(502)
5,288
The increase in loss provisions on receivables over 120 days includes specific debt provisions.
Total
£000
1.48%
71,377
(1,057)
70,320
Total
£000
1.28%
54,158
(693)
53,465
84
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
20. TRADE AND OTHER RECEIVABLES continued
Movements in the impairment allowance for trade receivables are as follows:
Opening provision for impairment of trade receivables
Increase during the year
Receivables written off during the year as un-collectible
Impairment gain/ (loss) during the year
At 31 October
21. TRADE AND OTHER PAYABLES
Current
Trade payables
Amounts owed to Group undertakings
Other payables
Accruals and deferred income
Other taxes and social security
Deferred and contingent consideration
Non-current
Deferred and contingent consideration
Government grants
Group
2021
£000
693
609
(245)
364
1,057
Group
2021
£000
68,923
-
945
5,518
654
172
76,212
25
13
38
2020
£000
762
234
(303)
(69)
693
2020
£000
46,048
-
853
4,253
661
102
51,917
127
14
141
Company
2021
£000
-
-
-
-
-
Company
2021
£000
-
-
294
-
-
-
294
-
-
-
2020
£000
-
-
-
-
-
2020
£000
-
589
249
-
-
-
838
-
-
-
Total trade and other payables
76,250
52,058
294
838
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost which approximates fair value. Deferred
and contingent consideration is measured at fair value, refer to business combinations note 35.
22. PROVISIONS
Balance as at 1 November
Charge for the year
Utilised
At 31 October
2021
£000
146
193
(96)
243
2020
£000
-
156
(10)
146
Provision has been made for the outcome of potential legal disputes where it is both probable that the Company will suffer an outflow of funds and
it is possible to make a reliable estimate of that outflow.
Provision analysed:
Legal Provision
Selby Seed Plant- Decommissioning
To be settled within one year
To be settled after one year
2021
£000
193
50
243
243
-
243
2020
£000
-
146
146
146
-
146
Legal provision of £193,000 during the year relates to disputes over the classification of certain types of grain where the achieved out-turn prices
have been lower than initially expected.
Closure of the Selby seed plant for £146,000 during 2020 was part settled during the year, with the balance to be settled in the subsequent year.
A provision was made for decommissioning the site and costs of vacating a leased property and transferring the plant and machinery to a new
location.
85
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 23. CASH, CASH EQUIVALENTS, BORROWINGS AND LEASE LIABILITIES
Current
Cash and cash equivalents per balance sheet
Cash and cash equivalents per cash flow statement
Bank loans and overdrafts due within one year or on demand:
Secured loans
Loan stock (unsecured)
Borrowings
Non-property leases
Property leases
Lease liabilities
Total current net cash/(debt) and lease liabilities
Non-current
Bank loans
Loan stock (unsecured)
Borrowings
Non-property leases
Property leases
Lease liabilities
Total non-current net (debt) and lease liabilities
Total net cash/(debt) and lease liabilities
Group
2021
£000
19,641
19,641
-
(672)
(672)
(1,626)
(2,369)
(3,995)
14,974
-
-
(1,881)
(3,850)
(5,731)
(5,731)
9,243
2020
£000
19,980
19,980
(897)
(675)
(1,572)
(1,473)
(2,010)
(3,483)
14,925
-
-
(2,228)
(4,281)
(6,509)
(6,509)
8,416
Company
2021
£000
7
7
-
(672)
(672)
-
-
-
2020
£000
7
7
(897)
(675)
(1,572)
-
-
-
(665)
(1,565)
-
-
-
-
-
-
-
-
-
-
-
-
(665)
(1,565)
Total net cash/(debt) and lease liabilities, excluding property leases
15,462
14,707
(665)
(1,565)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are all non-restricted balances and are all cash at bank and held with HSBC UK Bank Plc, except for £585,000 (2020:
£311,000) which is held at International FC Stones for wheat futures hedging. HSBC UK Bank Plc’s credit rating per Moody’s is A1 (2020: A2).
£412,000 of the cash and cash equivalent balance is denominated in EUR (99%) and USD (1%) (2020: £38,000, in EUR (90%) and USD (10%)). All
other amounts are denominated in GBP and are at booked fair value.
BORROWINGS
Bank loans and overdrafts are secured by an unlimited composite guarantee of all the trading entities within the Group. Outstanding bank borrowings
as at October 2020 were repaid during the year and the rate of interest on this loan was 0.85% over base rate up to the point of repayment.
Loan stock is redeemable at par at the option of the Company or the holder. Interest of 0.5% (2020: 0.5%) per annum is payable to the holders.
F
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ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
24. LEASES
Nature of leasing activities (in the capacity as lessee)
The group leases a number of properties, certain items of plant and equipment and vehicles. The table below shows the number of leases at 31
October 2021.
Number of lease
contracts at
November 2020
Additions
Expired
Disposal
Number of lease
contracts as at 31
October 2021
Fixed payments %
52
9
108
169
-
14
4
18
(1)
-
(2)
(3)
(1)
(2)
-
(3)
50
21
110
181
Land and buildings
£000
Plant, machinery and
motor vehicles
£000
6,266
2,661
(2,377)
(437)
6,113
4,974
1,630
(1,597)
(77)
4,930
Land and buildings
£000
Plant, machinery and
motor vehicles
£000
6,291
2,661
133
(2,419)
(446)
6,220
2021
£000
180
25
205
3,701
1,630
148
(1,973)
-
3,506
2020
£000
117
127
244
28%
11%
61%
100%
Total
£000
11,240
4,291
(3,974)
(514)
11,043
Total
£000
9,992
4,291
281
(4,392)
(446)
9,726
Within one
year
£000
One to two
years
£000
Two to five
years
£000
Over five
years
£000
Total
£000
3,995
2,821
2,910
-
9,726
Within one
year
£000
One to two
years
£000
Two to five
years
£000
Over five
years
£000
3,483
2,743
3,194
572
Total
£000
9,992
Group
Property leases
Plant and equipment
leases
Vehicle leases
Total
Group
Right-of-use assets
At November 2020
Additions
Amortisation
Disposal
At 31 October 2021
Group
Lease liabilities
At 1 November 2020
Additions
Interest expense
Lease payments
Disposal
At 31 October 2021
Group
Short-term lease expense
Low value lease expense
2021
Group
Lease liabilities
2020
Group
Lease liabilities
87
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 25. FINANCIAL INSTRUMENTS
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives
and policies to the Group’s finance function. The Board receives monthly reports from the Group Financial Director through which it reviews the
effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to
set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
The Group’s principal financial instruments (other than derivatives) comprise loans, cash and short-term deposits; the main purpose of these
instruments is to raise finance for the Group’s operations; and additionally include trade and other receivables, trade and other payables and lease
liabilities.
The Group also enters derivative transactions, principally foreign exchange contracts and wheat futures to manage commodity price and currency
risks arising from the Group’s operations.
The Group’s policy does not permit use of derivatives for speculative purposes. However, some derivatives do not qualify for hedge accounting, or
are specifically not designated as a hedge where gains and losses on the hedging instrument and the hedged item naturally offset in the Group’s
income statement. Treasury operates on a centralised basis, where Derivatives are only used for economic hedging purposes and not as speculative
investments and are classified as ‘held for trading’, other than designated and effective hedging instruments and are presented as current assets
or liabilities if they are expected to be settled within 12 months after the end of the reporting period, otherwise they are classified as non-current.
(i) Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
•
•
•
•
•
Cash and cash equivalents
Trade receivables
Trade and other payables
Borrowings
Forward foreign currency contracts
• Wheat futures contracts
(ii) Financial instruments by category
Financial Assets
Cash and cash equivalents
Amounts owed by subsidiary undertakings
Trade receivables, net of loss allowance
Loan to joint venture
Derivative financial instruments
Financial Liabilities
Bank loans and other borrowings
Finance lease liabilities
Amounts owed to Group undertakings
Trade payables and other payables
Accruals and deferred income
Deferred and contingent consideration
Derivative financial instruments
Group
Company
2021
£000
19,641
-
70,320
3,319
325
93,605
2020
£000
19,980
-
53,465
3,889
49
77,383
2021
£000
7
1,127
-
3,319
-
4,453
Group
Company
2021
£000
672
9,726
-
69,868
5,518
197
193
86,174
2020
£000
1,572
9,992
-
46,901
4,253
229
219
63,166
2021
£000
672
-
-
294
-
-
-
966
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
2020
£000
7
-
-
3,889
-
3,896
2020
£000
1,572
-
589
249
-
-
-
2,410
88
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
25. FINANCIAL INSTRUMENTS continued
(iii) Financial instruments carrying value
Financial instruments not measured at fair value includes trade and other receivables, trade and other payables and loans and borrowings.
Group financial assets
Trade receivables, net of loss allowance
Loan to joint venture
Derivative financial instruments
Group financial liabilities
Bank loans and other borrowings
Lease liabilities
Trade payables and other payables
Accruals and deferred income
Deferred and contingent consideration
Derivative financial instruments
Company financial assets
Amounts owed by subsidiary undertakings
Loan to joint venture
Company financial liabilities
Bank loans and other borrowings
Amounts owed by Group undertakings
Other payables
Fair Value
Amortised cost
2021
£000
-
-
325
325
Fair Value
2021
£000
-
-
-
-
197
193
390
2020
£000
-
-
49
49
2020
£000
-
-
-
-
229
219
448
2021
£000
70,320
3,319
-
73,639
Amortised cost
2021
£000
672
9,726
69,868
5,518
-
-
2020
£000
53,465
3,889
-
57,345
2020
£000
1,572
9,992
46,901
4,253
-
-
85,784
62,718
Fair Value
Amortised cost
2021
£000
-
-
-
Fair Value
2021
£000
-
-
-
-
2020
£000
-
-
-
2020
£000
-
-
-
-
2021
£000
1,127
3,319
4,446
Amortised cost
2021
£000
672
-
294
966
2020
£000
-
3,889
3,889
2020
£000
1,572
589
249
2,410
(iv) Derivative Financial instruments classification by type, level and non-current and current split
Derivative financial instruments specifically have been broken into their current and non-current component and by derivative instrument type under
hedge accounting and fair value through profit and loss.
Asset derivative financial instruments:
Forward FX contracts- designated cash flow hedge instruments
Wheat futures contracts- designated cash flow hedge instruments
Forward FX contracts- fair value through profit or loss
Liability derivative financial instruments:
Wheat futures contracts- fair value through profit or loss
89
Fair Value
Current Non-Current
Current Non-Current
2021
£000
206
119
-
325
£000
193
193
2020
£000
-
-
49
49
£000
219
219
2021
£000
206
114
-
320
£000
193
193
2020
£000
2021
£000
2020
£000
-
5
-
5
£000
-
-
-
-
49
49
£000
219
219
-
-
-
-
£000
-
-
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 25. FINANCIAL INSTRUMENTS continued
The valuation techniques and significant unobservable inputs related to determining the fair value of derivatives (level 1) and deferred and contingent
consideration which is classified at level 3 in the fair value hierarchy, where the valuation techniques are explained in the table below.
Financial instrument
Valuation techniques used
Forward foreign exchange
contracts
Wheat Futures Contracts
Spot price at reporting date
including forward swap points
based off the appropriate
interest rate curve over 12
months
Market prices published by ICE
Futures Europe, MIC Code:
IFLX
Significant unobservable
inputs (level 3 only)
Inter-relationship between
key unobservable inputs
and fair value (level 3 only)
Not applicable
Not applicable
Not applicable
Not applicable
Deferred and contingent
consideration
Realisation of net assets on
completion and target earnings
Management accounts
information
Any adjustments to net assets
or profitability of management
accounts
The fair value hierarchy of financial instruments measured at fair value is provided below. There were no transfers between levels during the period.
Group
Financial assets
Derivative financial assets (designated
hedging instruments)
Derivative financial assets (fair value
through profit or loss)
Financial liabilities
Derivative financial liabilities (fair value
through profit or loss)
Deferred and contingent consideration
Level 1
2021
£000
325
-
325
Level 1
2021
£000
193
-
193
2020
£000
-
49
49
2020
£000
219
-
219
Level 2
2021
£000
-
-
-
Level 2
2021
£000
-
-
-
2020
£000
-
-
-
2020
£000
-
-
-
Level 3
2021
£000
-
-
-
Level 3
2021
£000
-
197
197
The reconciliation of the opening and closing fair value balance of level 3 financial instruments is provided below:
Deferred and contingent consideration
As at 31 October 2019
Payments out of deferred and contingent consideration in year
New deferred and contingent consideration in year
As at 31 October 2020
Payments out of deferred and contingent consideration in year
New deferred and contingent consideration in year
As at 31 October 2021
2020
£000
-
-
-
2020
£000
-
229
229
£000
336
(107)
-
229
(82)
50
197
F
i
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a
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c
i
a
l
S
t
a
t
e
m
e
n
t
s
The sensitivity analysis of a reasonably possible change in one significant unobservable input, holding all other inputs constant within level 3 financial
instruments is not provided as the item above only has one input as described in the valuation table.
90
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
25. FINANCIAL INSTRUMENTS continued
Hedging strategy
The objective of Wynnstay’s Treasury activity is to minimise the post-tax net cost of financial operations and reduce its volatility to benefit earnings
and cash flows. Wynnstay uses only a few financial instruments to finance its operations and derivative financial instruments to manage market
risks from these operations. Derivatives principally comprise of foreign exchange forward contracts and wheat futures contracts. These financial
instruments reduce the uncertainty of foreign currency transactions and wheat prices.
Derivatives are used exclusively for hedging purposes in relation to underlying business activities and not as trading or speculative instruments.
Hedge ratios are monitored on a monthly basis at Board level in line with the Group’s risk management policies and procedures where the hedged
item exposure is hedged with derivatives within an 90% to 100% range.
The main source of hedge ineffectiveness in these hedging relationships is the effect of the counterparty and the Group’s own credit risk on the
fair value of the foreign exchange forward contracts, which is not reflected in the fair value of the hedged item attributable to changes in foreign
exchange rates and ineffectiveness, including timing differences between the cash flows of the hedged item and the hedging instruments.
Foreign Exchange Contracts and Wheat Futures designated under cash flow hedges
During 2021, the Group entered into forward foreign exchange contracts which have been designated as cash flow hedges. These were entered
into to hedge the foreign exchange exposure arising on cash flows from Euro and USD denominated wheat physical purchase transactions. The
Group manages its cash flow wheat price risk by entering into offsetting futures contracts on ICE Futures Europe.
The notional value of foreign exchange forward contracts and wheat futures is the absolute total of outstanding positions at the balance sheet date.
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure
that an economic relationship exists between the hedged item and hedging instrument. The Group enters into hedge relationships where the critical
terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed.
If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the
hedging instrument, the Group uses the hypothetical derivative method to assess effectiveness.
During the year total hedge ineffectiveness arising from forward foreign exchange contracts amounted to £114,000 (2020: £ nil), consisting of
realised swap cost of £68,000 (2020 £ nil) and unrealised swap cost of £46,000 (2020: £ nil) at the balance sheet date.
Hedge Type
Hedging Instrument
Hedged Item
Nominal
Value
Average contracted
£000 Derivatives prices
Cash flow hedge Forward FX GBP/EUR Physical Wheat Grain & Fertiliser
18,076
GBP/EUR 1.174
Cash flow hedge Forward FX GBP/USD Physical Wheat Grain & Fertiliser
7,028
GBP/USD 1.364
Maturing
Group Qrt 1, 2021-2022
to Group Qrt 4, 2022
Group Qrt 1, 2021-2022
to Group Qrt 2, 2022
Cash flow hedge
UK Feed Wheat
futures contract- IFLX
Physical Wheat Grain
£187.63
Group Qrt 3, 2022 to
Group Qrt 1, 2022- 2023
769
25,873
Set-off of financial assets and liabilities
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position is shown when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. According to the enforceable master netting agreements with the financial counterparties, in the event of default, derivative financial
instruments with the same counterparty can be net settled. In the event of default, subject to payment enforcements £108,000 (2020: £44,000)
of assets and liabilities, respectively of the derivative financial instruments are subject to right for offsetting, under ISDA (International Swaps and
Derivatives Association) agreements.
There were no other material amounts offset in the consolidated statement of financial position or associated with enforceable master netting
agreements.
Gross and net
presentation of derivatives
Gross Position
Right of offset to
net settle
Balance Sheet Net
Position
Gross Position
Right of offset to
net settle
Balance Sheet
Net Position
Asset derivative financial
instruments:
Liability derivative
financial instruments:
2021
£000
433
2021
£000
(108)
2021
£000
325
2020
£000
93
2020
£000
(44)
2020
£000
49
301
(108)
193
263
(44)
219
91
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
25. FINANCIAL INSTRUMENTS continued
RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
The main risks arising for the Group are credit risk, foreign currency, commodity price risk, intertest rate risk, liquidity risk and capital management
risk. The Board approves prudent treasury policies for managing each of the risks which are summarised below:
i) 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 potentially always present.
Detailed credit approval before initial supply, the operation of credit limits and active credit control monitoring and policy, help to minimise the
incidence of bad debt risk. The Group’s grain trading activities is exposed to substantial customer credit limits and to assist in mitigating such riskier
limits, a credit insurance policy is put in place to provide partial cover against default by 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 diverse customer base being large and unrelated.
ii) Foreign currency risk
The main currency related risk to the Group comes from the forward purchasing of imported raw materials for our Grain business. This risk is
managed by entering into forward foreign exchange contracts to coincide at the same time as when the underlying transaction is priced and agreed
for future delivery. The fair value of the contracts was £206,000 (2020: £49,000) with the principal nominal amounts of the forward purchased
currency, based in sterling of £25,104,000 (2020: £8,733,000).
The Group is primarily exposed to foreign exchange risk in relation to Sterling against movements in US Dollar and Eur. Foreign exchange risk arises
from the translation of financial assets and liabilities that are not in the functional currency of the entity that holds them. Based upon the carrying
value of the Group’s net financial assets and liabilities denominated in a foreign currency as at 31 October 2021 and 31 October 2020, the exposure
is minimal.
iii) Commodity market risk
Whilst the Group does not speculative in commodity trading, it does have to make significant forward purchases of certain raw materials, particularly
for use within its animal feed manufacturing operations. Position reporting systems and controls are in place to ensure the Board is informed of
exposure level via the Treasury Management Committee on a regular basis, where the hedging of wheat contracts via a commodities broker is
transacted on the Inter-Continental Exchange (ICE) futures market to manage commercial pricing decisions and prevent margin erosion.
If the ICE futures price quoted in sterling pound was to increase or decrease by £1, with all other variables held constant this would result in a £4,000
gain or loss, respectively which would feature in other comprehensive income.
iv) Interest rate risk
The Group’s debt terms, historically have generally been floating rate interest. The Treasury Committee presents to the Board their view and option
to fix interest rates attached to such variable rate debt through utilising interest rate swaps. However, where possible fixed rate term asset finance
is used for the acquisition of property, plant and equipment.
The Group raises borrowings in sterling only. During the year the Company repaid its debt borrowing of £900,000. The group has been largely
unaffected by phase 1 of the Interest rate benchmark reform, under IFRS9.
At 31 October 2021, if interest rates had been 100 basis points higher or lower with all variables held constant, profit after tax and net assets
would have been £34,000 (2020: £27,000) lower or higher, respectively mainly as a result of higher/ lower interest expense on sterling floating rate
borrowings. The directors consider that 100 basis points is the maximum likely change in sterling interest rates over the next year, being the period
up to the next point at which the Group expects to make these disclosures.
v) 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 overdraft and revolving credit
facilities in place of £10.5m and £7.5m respectively (2020: £10.5m and £7.5m) to manage liquidity needs. The overdraft facility is renewable in April
2022, priced at 1.4% over base rate and the revolving credit facility is committed to June 2023, priced at 1.6% over Sonia, and the Board believes
these are adequate to provide prudent liquidity management.
The Board regularly receives monthly cash flow projections as well as information regarding net cash/(debt), where these monthly projections have
indicated that the Group is expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances. Refer
to note 23 on net cash position.
The following table analyses the Group and Company’s financial liabilities that will be settled on a net basis, where there is legal and constructive
obligation to do so, based on agreed contractual settlement dates, as shown within time buckets in the table below. All amounts disclosed are
undiscounted cash flows.
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
92
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Notes to the Financial Statements continued
25. FINANCIAL INSTRUMENTS continued
RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES continued
2021
One to
two
years
£000
Two to
five
years
£000
Over
five
years
£000
Within
one
year
£000
672
-
-
3,995
2,821
2,910
53
140
Group
Bank loans and other borrowings
Finance lease liabilities
Derivatives
Total
£000
672
9,726
193
Trade payables and other payables
69,868
69,868
Accruals and deferred income
Deferred and contingent consideration
5,518
5,518
197
172
-
-
25
86,174
80,278
2,986
2,910
-
-
-
-
Within
one
year
£000
1,572
3,483
219
Total
£000
1,572
9,992
219
46,901
46,901
4,253
4,253
2020
One to
two
years
£000
Two to
five
years
£000
-
-
2,743
3,194
-
-
-
-
-
-
229
82
122
25
Over
five
years
£000
-
572
-
-
-
-
63,166
56,510
2,865
3,219
572
2020
-
-
-
-
-
-
-
2021
One to
two
years
£000
-
-
-
-
Within
one
year
£000
672
-
294
966
Total
£000
672
-
294
966
Company
Bank loans and other borrowings
Amounts due from Group
undertakings
Other payables
vi) Capital management risk
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
-
-
-
-
-
-
-
-
1,572
1,572
589
249
589
249
2,410
2,410
-
-
-
-
-
-
-
-
-
-
-
-
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 and
benefits to shareholders’ whilst principally maintaining an efficient capital structure to optimise the cost of capital. In order to maintain or adjust the
capital structure, the Group adjusts the amount of dividends to, or to be paid to shareholders’, the return of equity capital to shareholders’, the
issuance of new shares (that could also possibly take the form of bonus script ordinary shares), the disposal of cash generative assets to settle the
group’s debt exposure.
Group monitors its gearing ratio for the purpose of capital management. This ratio is calculated as net cash/(debt) divided by total equity. Net cash/
(debt) is calculated as cash and cash equivalents less total borrowings (both current and non-current borrowings) and lease liabilities. Total equity is
as shown in the consolidated balance sheet.
Cash and cash equivalents
Loans and borrowings
Lease liabilities
Net cash
Total equity
Net cash to equity ratio (%)
Net cash to equity ratio, excluding property leases (%)
2021
£000
19,641
(672)
(9,726)
9,243
105,722
8.74%
14.63%
2020
£000
19,980
(1,572)
(9,992)
8,416
98,178
8.57%
14.98%
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, where relevant.
93
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 26. DEFERRED TAXATION
At 1 November
Tax equalisation
Charge for the year in Statement of Income
Charge for the year in Statement of Changes in Equity
At 31 October
The provision for deferred taxation is made up as follows:
Accelerated capital allowances
Other temporary and deductible differences
27. SHARE CAPITAL
Authorised
Ordinary shares of 25p each
Allotted, called up and fully paid
Ordinary shares of 25p each
Group
2021
£000
276
(24)
160
62
474
Group
2021
£000
449
25
474
2020
£000
227
24
25
-
276
2020
£000
392
(116)
276
Company
2021
£000
-
-
-
-
-
Company
2021
£000
-
-
-
2020
£000
-
-
-
-
-
2020
£000
-
-
-
2021
No. of shares
000
2021
Nominal Value
£000
2020
No. of shares
000
2020
Nominal Value
£000
40,000
20,299
10,000
5,075
40,000
10,000
20,051
5,013
During the year 89,687 shares (2020: 155,035) were issued with an aggregate nominal value of £22,421 (2020: £38,759) and were fully paid up
for equivalent cash of £439,095 (2020: £392,135) to shareholders exercising their right to receive dividends under the Company’s dividend scrip
scheme. A further 158,138 shares were issued with a nominal value of £39,534 and equivalent cash value of £586,310 (2020: Nil) to satisfy the
exercise of employee options.
94
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc Notes to the Financial Statements continued
28. SHARE-BASED PAYMENTS
The Group has three share-based payment schemes in operation at 31 October 2021. The executive directors and certain employees participate in
a performance share plan (PSP) under which the vesting of all awards made under the PSP is subject to an earnings per share (“EPS”) and Return
on Capital Employed (“ROCE”) growth target measured against average annual increases over a three-year period.
The executive directors and certain employees participate in the discretionary Approved Company Share Option Plan (CSOP). Such schemes have
no performance criteria attached to their operation.
All employees, subject to eligibility criteria, may participate in the Save As You Earn plan. The scheme does not have any performance criteria
attached to its operation.
The following options were exercised, lapsed and outstanding at the year end:
Exercise
Price per
share £
Exercisable by
As at
01 November
2020
(Exercised)/
Issued in
year
Lapsed
in year
As at
31 October
2021
Discretionary Share Option Schemes
CSOP Granted April 2012
3.7500 Apr 2015 - Mar 2022
CSOP Granted October 2014
5.4750 Oct 2017 - Oct 2024
PSP Granted January 2020
Nil cost Oct 2022 - Mar 2023
PSP Granted April 2021
Nil cost Oct 2023 - Mar 2024
CSOP Granted April 2021
4.6250 Apr 2024 - Apr 2031
Savings Related Option Schemes
Granted July 2016
3.7000 Aug 2021 - Jan 2022
Granted September 2018
4.0000 Oct 2023 - Mar 2024
Granted August 2020
2.7500 Sep 2023 - Feb 2024
24,000
151,000
146,647
-
-
321,647
161,209
135,495
456,978
753,682
1,075,329
(24,000)
-
-
84,728
186,000
246,728
(134,138)
-
-
(134,138)
112,590
-
-
-
-
(12,000)
(12,000)
(1,458)
(6,975)
(23,791)
(32,224)
(44,224)
-
151,000
146,647
84,728
174,000
556,375
25,613
128,520
433,187
587,320
1,143,695
During the year 24,000 (2020: Nil) Discretionary Share Options and 134,138 (2020: Nil) Savings Related Options were exercised and satisfied by
the allotment of 158,138 (2020: Nil) new shares by the Company. The change in the number of other Discretionary and Savings Related Options
relate to members withdrawing from the scheme by leaving employment, exercise conditions not being met or by employees closing their savings
contracts. During the period 84,728 new nil cost options were granted to certain executives under the terms of the Performance Share Plan
approved by shareholders in March 2019, and 186,000 options were granted under the Company’s approved CSOP scheme at an exercise price
of £4.625.
Fair Value of Options
During the year, the Group charged £343,000 (2020: £96,000) of share based remuneration cost to its Consolidated Statement of Comprehensive
Income based on a movement in the fair value of outstanding options granted after November 2002. The 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 - CSOP options
- SAYE options
2021
£4.90
£4.58
£2.60
33.20%
1.83 years
963,977
0.10% - 0.75%
151,000
25,613
2020
£2.85
£2.93
£2.66
42.69%
2.29 years
900,329
0.10% - 0.75%
175,000
-
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.
95
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 29. CAPITAL COMMITMENTS
At 31 October 2021 the Group and Company had capital commitments as follows:
Contracts placed for future capital expenditure not provided in
the financial statements
30. PENSION COMMITMENTS
Group
2021
£000
263
2020
£000
264
Company
2021
£000
-
2020
£000
-
The Group operates two defined contribution pension schemes which are administered on separate bases. The pension and associated costs
charge for the year £1,084,000 (2020: £1,109,000). The liability owed to the pension schemes at 31 October 2021 was £147,000 (2020: £147,000).
31. EMPLOYEE SHARE OWNERSHIP TRUST
The Company operates an employee share ownership trust (ESOP). As at 31 October 2021, 16,834 ordinary 25p shares (2020: 16,834 ordinary
25p shares) were held by the trust with an aggregate market value at the year end of £82,486 (2020: £47,977). The assets, liabilities, income and
costs of the ESOP are incorporated into the financial statements of the Group.
32. RELATED PARTY TRANSACTIONS
The Board confirms that they consider the Directors of the Company to be the only key management personnel. 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. Directors and
their remuneration is disclosed within the Director’s Remuneration disclosure (note 9).
Gareth Davies
Steve Ellwood
Andrew Evans (retired 1 December 2020)
Philip Kirkham as a director of M&R Kirkham & Sons Ltd
Jim McCarthy (retired 31 July 2021)
Howell Richards as a director of Cwrtmalle Ltd
Paul Roberts
Catherine Bradshaw
Total sales
Balance outstanding
2021
£000
5
-
21
383
-
3,248
1
-
3,658
2020
£000
2
-
297
352
-
3,382
1
n/a
4,034
2021
£000
-
-
n/a
114
-
1,124
-
-
1,238
During the year Group companies entered into the following transactions with related parties who are not members of the Group:
Group
Purchases from NIAB, a company whose Directors include
S J Ellwood
Total sales
Balance outstanding
2021
£000
62
2020
£000
119
2021
£000
-
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
2020
£000
-
-
84
37
-
1,316
-
n/a
1,437
2020
£000
-
96
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to the Financial Statements continued
33. CASH GENERATED FROM OPERATIONS
Profit for the year from operations
Adjustments for:
Tax
Dividend received from subsidiaries
Dividends from Joint ventures and associates
Depreciation of tangible fixed assets
Investment and goodwill impairment
Amortisation of right-of-use assets
Equity investment revaluation
Amortisation of other intangible fixed assets
(Profit) on disposal of property, plant and equipment
(Profit) / Loss on disposal of right of use asset
Loss on relinquishment of property lease
Derivative held as FVPL
Government grant
Movement in provisions made
Interest on right-of-use liabilities
Net Interest expense
Share of post-tax results of joint ventures
Share-based payments
Changes in working capital (excluding effects of
acquisitions and disposals of subsidiaries):
(Increase) / decrease in inventories
(Increase) / decrease in trade and other receivables
(Decrease) / increase in payables
Cash generated from / (used in) operations
34. RECONCILIATION OF LIABILITIES FROM FINANCING
Group
2021
£000
8,934
2,057
-
-
2,165
95
3,974
2
39
(86)
(14)
26
23
(2)
193
281
(91)
(572)
343
2020
£000
5,533
1,448
-
-
2,290
601
3,888
-
36
(142)
25
-
395
-
156
295
(23)
(438)
96
(14,583)
(16,753)
24,523
10,554
8,049
8,055
(10,431)
19,833
As at 1 November 2019
Cash-flows -Repayments of borrowings
-Payments of IFRS 16 lease liabilities
Non-cash flows
- Lease movements: additions, disposals and interest, net
Non-Current
£000
-
-
-
-
Total
£000
6,764
Non-Current
£000
-
Group
Current
£000
6,764
(1,470)
(4,632)
(1,470)
(4,632)
910
910
- Finance Lease upon IFRS 16 adoption
6,509
3,483
9,992
As at 31 October 2020
Cash flows
-Repayments of borrowings
-Payments of lease liabilities
Non-cash flows
- Lease movements: additions, disposals and interest, net
As at 31 October 2021
2021
Lease Liabilities
Borrowings
2020
Lease Liabilities
Borrowings
6,509
5,055
11,564
-
-
(900)
(900)
(4,392)
(4,392)
(778)
5,731
4,904
4,667
4,126
10,398
5,731
-
5,731
6,509
-
3,995
672
4,667
3,483
1,572
9,726
672
10,398
9,992
1,572
6,509
5,055
11,564
97
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Company
2021
£000
3,670
69
(3,150)
(753)
444
-
-
-
-
-
-
-
-
-
-
-
(51)
-
343
-
(1,127)
(543)
(1,098)
2020
£000
2,325
82
(2,900)
(2)
424
601
-
-
-
-
-
-
-
-
-
-
(66)
-
96
-
-
180
740
Company
Current
£000
3,042
(1,470)
-
Total
£000
3,042
(1,470)
-
-
-
1,572
1,572
(900)
(900)
-
-
-
-
672
672
-
672
672
-
1,572
1,572
-
672
672
-
1,572
1,572
-
-
-
-
-
-
-
-
-
-
-
-
35. BUSINESS COMBINATIONS
AGRICULTURAL DIVISION OF ARMSTRONG RICHARDSON & CO. LIMITED
On 12 February 2021, Wynnstay (Agricultural Supplies) Limited entered into a business combination and acquired 100% of the trade and some of
the assets of the agricultural division of Armstrong Richardson & Co. Limited.
The provisional consideration is £548,000 which is represented by £154,000 paid on completion for certain assets, deferred consideration paid
during the year of £344,000 for inventory and debtors, and contingent consideration of £50,000 relating to goodwill, which is expected to be paid
by 12 February 2023. The consideration payable is dependent on employee retention and future product volume.
The fair value of the contingent consideration has been based on management expectation of future performance of the business and could range
from £nil to £50,000.
Amounts included in the Consolidated Statement of Comprehensive Income period to 31 October 2021 extracted from management accounts are
revenues of £4,761,000 and profit before tax of £3,000.
HELM GREAT BRITAIN LIMITED
On 3 March 2021, Glasson Grain Limited entered into a business combination and acquired 100% of the manufacturing activity and assets of the
dry fertiliser blending business of HELM Great Britain Limited.
The provisional consideration is £1,658,000 which is represented by £1,658,000 paid during the year for certain assets and contingent and deferred
consideration of £nil.
Amounts included in the Consolidated Statement of Comprehensive Income period to 31 October 2021 extracted from management accounts are
revenues of £11,065,000 and profit before tax of £742,000.
Fertiliser division of HELM
Agricultural division of Armstrong
Total
Great Britain Limited
Richardson & Co. Limited
Provision for fair value of asset acquired
Goodwill
Intangible assets
Property, plant and equipment
Other debtors
Inventories
Provisional consideration
Contingent and deferred
Settled in cash at completion
Settled in cash post completion before year end
Total settled in cash during the year
Contingent consideration outstanding at year end
£000
-
-
225
-
1,433
1,658
-
1,658
-
1,658
-
£000
£000
50
50
16
88
344
548
(394)
154
344
498
50
50
50
241
88
1,777
2,206
(394)
1,812
344
2,156
50
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Acquisition costs of £17,000 arose as a result of the above transactions which have been recognised as part of administrative expenses.
Both acquisitions were parts of larger legal entities and therefore the historic sales, gross profit and profit before tax in the period prior to the
acquisition is not publicly available.
The business combination accounting will be finalised 12 months from the date of acquisition.
Contingent and deferred consideration of £82,000 was paid during the period to 31 October 2021 relating to prior period acquisitions. Resulting in
a total outflow of £2,238,000 in the period to 31 October 2021.
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
98
Notice of Annual General Meeting
At the date of this Notice, the Government’s guidance around limiting public gatherings has been relaxed and therefore the
Board have decided to conduct the 2022 AGM in person with a physical meeting. However, it may be necessary to change
arrangements at short notice and shareholders are encouraged to check ahead of the proposed date.
Notice is hereby given that the thirtieth Annual General Meeting (the “Meeting”) of Wynnstay Group plc (the “Company”) will be held at the Lion
Quays Resort, Weston Rhyn, Oswestry, Shropshire, SY11 3EN on Tuesday 22 March 2022 at 11.45 am 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 2021 together with the Directors’ Report
and Auditors’ Report on those accounts.
To declare a final dividend for the year ended 31 October 2021.
To re-appoint the following Director who retires by rotation under Article 91:
Gareth Wyn Davies
To re-appoint the following Director who retires under Article 86:
Catherine Bradshaw
To re-appoint RSM UK Audit 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.
7.
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 £500,000 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.
That, subject to passing Resolution 6 earlier, the Directors be and they are empowered pursuant to Section 570 of the Act to allot equity
securities wholly for cash pursuant to the authority conferred by the previous Resolution as if Section 561 of the Act did not apply to any
such allotment, provided that this power shall be limited to the allotment of equity securities: -
a) in connection with an offer of such securities by way of rights to holders of Ordinary Shares in proportion (as nearly as may be
practicable) to their respective holdings of such shares, but subject to such exclusions or other arrangements as the Directors may
deem necessary or expedient 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
b) otherwise than pursuant to sub-paragraph (a) above up to an aggregate nominal amount of £500,000, and shall expire on the earlier of
the next Annual General Meeting of the Company and 15 months from the date of this Resolution save that the Company many, before
such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors
may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this Resolution
has expired.
8.
That, the Company be and is generally and unconditionally authorised for the purposes of Section 701 of the Act to make one or more
market purchases (within the meaning of Section 693 of the Act) on the London Stock Exchange of Ordinary Shares of £0.25 each in the
capital of the Company provided that:-
a) the maximum aggregate number of 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
Paul Roberts
Acting Company Secretary
Wynnstay Group plc
Eagle House
Llansantffraid-ym-Mechain
Powys, SY22 6AQ
1 February 2022
99
99
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021
Notes To The Notice Of Annual General Meeting
1.) Meeting format
As at the date of this Notice, the Government’s guidance around limiting public gatherings has been relaxed and shareholders are therefore
invited to attend a traditional meeting in person. However, it may be necessary to change arrangements at short notice and shareholders are
encouraged to check prior to the meeting.
- All resolutions will be decided on a show of hands unless a poll of members is/has been requested.
- Shareholders may submit questions to be addressed during the meeting by emailing their question to shareholder-communications@wynnstay.
co.uk no later than 7 days before the meeting.
2.) 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 Companies Head Office not less than 24 hours before
the meeting.
3.) Authority to allot shares
Special resolutions 6 & 7 are put forward to give the directors authority to allot new shares (including to those shareholders exercising 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 flexibility in financing possible business opportunities and are normal practise for
a company of this size, and are routinely put to shareholders.
5.) Authority to purchase shares
Special resolution 8 is put forward to give the directors the ability to buy back and cancel existing shares if they feel that such action would benefit
all remaining shareholders and are normal practise for a company of this size, and are routinely put to shareholders.
6.) Documents on display
Copies of necessary documents will be available on the Company’s website prior to and during the Meeting.
7.) Enquiries relating to the Meeting
Members are welcome to contact the Acting 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)
S
h
a
r
e
h
o
l
d
e
r
I
n
f
o
r
m
a
t
i
o
n
100
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc
Notes to Notice of Annual General Meeting
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. Hang up on cold calls – if you are cold called in relation to investment opportunities there is a high risk that it may involve an attempted scam.
The safest thing to do is to hang up.
2. Check out any firm – before considering any relationship with a new individual or firm offering financial services, check them out on the
Financial Services Register on the FCA website. Generally all businesses legally authorised to offer such services will be regulated by the FCA.
3. Get impartial advice – before handing over any money in relation to new investments, think about seeking advice from someone unconnected
to the new contact or entity that would receive your funds.
4. Report a scam – if you suspect you have been approached by attempted fraudsters, then please report it to the FCA by using the reporting
form available on the FCA 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!
Financial Calendar
2 February 2022 Announcement of 2021 Results
22 March 2022 Annual General Meeting
01 April 2022
Dividend Record Date
29 April 2022 Payment of Final 2021 Dividends
June 2022 Announcement of 2022 Interim Results
101
101
www.wynnstayplc.co.uk ANNUAL REPORT AND ACCOUNTS 2021 102
ANNUAL REPORT AND ACCOUNTS 2021 Wynnstay Group Plc