Delivering a
sustainable
farming future
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Annual Report and
Accounts 2022
Contents
Operational Highlights
Financial Highlights
Strategic Report
Group Structure
Business Model
Our Divisions
Key Strengths
Market Trends
Our Pillars
Growth Strategy
Chairman’s Statement
Chief Executive’s Review
Finance Review
Company Details and Advisors
Principal Risks and Uncertainties
S172 Statement
ESG Framework
Environmental Strategy and SECR Statement
Corporate Values
Social
Corporate Governance Statement
Audit Committee Report
Directors’ Responsibility Statement
Board of Directors and Company Secretary
Senior Management
Directors’ Report
Directors’ Remuneration Report
Independent Auditor’s Report
Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated and Company Balance Sheet
Consolidated and Company Statement of Changes in Equity
Consolidated and Company Cash Flow Statements
Principal Accounting Policies
Notes to the Accounts
Shareholder Information
Notice of Annual General Meeting
Notes to Notice of Annual General Meeting
Financial Calendar
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Our Mission
To help the farmer to feed the UK in a more sustainable way
Operational Highlights:
FEED
GRAIN
ESG
GLASSON
DEPOTS
INVESTMENT AND
ACQUSITION
PERFORMING
AHEAD OF
EXPECTATIONS
PROGRESSING
WITH OUR
OBJECTIVES
EXCEPTIONAL
PERFORMANCE
The Feed division
saw an increase of
5.9% in volumes
and the investment
project in our
Carmarthen Mill
commenced. We
completed our
biggest acquisition
to date, Humphrey
Feeds & Pullets, a
specialist poultry
business in the
South of England.
2022 saw good
performance from
GrainLink, impacted
by record grain
prices, favourable
weather, and a
strong harvest.
We saw good
trading volumes in
the east following
our expansion.
Investment was
made at our seed
plant, adding
new cereal seed
technology and
doubling grass seed
production capability.
We have progressed
well with our internal
sustainability
objectives, focusing
on carbon, water
and waste. Climate
friendly feeds and
an increased focus
on environmental
seed mixtures further
developed our
holistic farm offering
to our customers.
Considerable
progress has
been made in the
implementation of a
Sustainable Farming
Advisory Team
which will be further
developed in 2023.
Performance from
Glasson Grain Ltd
was exceptional,
driven by one off
gains in fertiliser
blending activity.
The integration
of the Howden
site, acquired
in the previous
financial year, has
progressed well and
resulted in a higher-
than-expected
contribution.
EXCELLENT
PERFORMANCE
AND
OPTIMISATION
The Specialist
Agricultural
Merchanting division
performed ahead
of expectations,
with strong sales
of bagged feed.
We continued our
depot optimisation
programme with the
closure of one site
and enhancement of
existing sites.
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ANNUAL REPORT AND ACCOUNTS 2022
Financial Highlights
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Group Revenue (£m)
£713.03m
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Underlying Pre-tax Profit*
Earnings per Share (pence)
£22.61m
82.72p
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Dividend per Share (pence)
17.00
Colleagues
Group Revenue
£713.03m
2021: £500.39m
+42%
Earnings per Share
82.72 pence
2021: 44.40 pence
+86%
Underlying Pre-tax Profit*
£22.61m
2021:£11.44m
+98%
Shareholders’ Funds
£130.70m
2021 £105.72m
+24%
Profit before Tax
£21.12m
2021: £10.99m
+92%
Dividend per Share
17.00 pence
+9.7%
2021: 15.50 pence
*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.
4
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc‘20‘18‘19‘21‘20‘19‘18‘21‘22‘20‘18‘19‘21‘22‘22‘20‘19‘18‘21‘20‘21‘18‘19‘22‘22 Group Structure
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.
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.
AGRICULTURE
SPECIALIST
AGRICULTURAL
MERCHANTING
DEPOTS
YOUNGS
ANIMAL
FEEDS
FEED
ARABLE
GLASSON
HUMPHREY
FEEDS &
PULLETS
5
ANNUAL REPORT AND ACCOUNTS 2022 Business Model
OUR PROPOSITION
Trusted Experts
Product Range
Multi-Channel Offering
Manufacturing
Capability
Established
Culture & Values
WE INVEST IN SUSTAINABLE
GROWTH THROUGH:
People
Technology
Manufacturing
Acqusitions
CREATING VALUE FOR STAKEHOLDERS:
Customers
Employees
Shareholders
Suppliers
Communities
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
6
Our Divisions
Agriculture
Comprises the manufacturing and supply of a comprehensive range of agricultural inputs to customers across many parts of the
UK.
FEED
The Group operates three feed mills and three 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.
HUMPHREY FEED & PULLETS
Humphrey Feeds & Pullets is a leading poultry feed supplier and point
of lay pullet supplier to the independent poultry farmer. The business
offers both traditional and organic feeds, manufacturing from a mill
in Twyford. Humphrey Feeds & Pullets specialises in offering expert
knowledge on poultry nutrition and husbandry, with a primary mission
of advancing poultry performance.
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.
7
ANNUAL REPORT AND ACCOUNTS 2022 Our Divisions
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 53 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.
8
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc Key Strengths
BALANCED DIVISIONS
2COMPLEMENTARY &
33
966
COMMITTED AND LOYAL
COLLEAGUES
ACQUISITIONS SINCE 2004
25,000PRODUCTS
£713mIN REVENUE
9
A robust and balanced business model with two
complementary divisions - Agriculture and Specialist
Agricultural Merchanting.
33 acquisition alongside a number of other commercial
initiatives since 2004. Opportunities for future growth
into the currently fragmented farming and rural economy
by increased geographic reach though organic and
focused acquisitions.
Committed and loyal colleagues who offer technical
advice to support the prosperity of our farmer customer
base through efficiencies and an extensive range of
products.
A broad range of agricultural products, marketed via a
multichannel sales offering.
Strong financials with the capacity to support future
growth.
ANNUAL REPORT AND ACCOUNTS 2022 Market Trends
Raw Materials
Fertiliser
Grain
Energy
Agflation
Labour
Market Activity
Impact on Wynnstay
Our Actions
The Russian invasion
of Ukraine has caused
significant volatility in raw
material prices.
Increased margin pressure
and higher prices, with
volatility expected to
continue.
Dedicated Trading Team
managing the impact of
market volatility on our
business
Higher prices for
fertiliser and pressure on
availability throughout the
year caused a reduction
in the volumes of fertiliser
traded through Wynnstay
(Agricultural Supplies) Ltd
Dedicated Fertiliser Team
supporting customers
with their fertiliser
buying decisions and
encouraging efficient
use through managed
applications
This had a major impact
on our cash position due
to market volatility.
Dedicated Grain Trading
Team and financial stability
that the Group offers.
Increase in the price of
natural gas and sanctions
placed on Russia following
the invasion of the Ukraine
The price of grain reached
record levels following
the Russian invasion of
Ukraine. Prices eased
during the year but not to
previous levels.
Increased cost of energy
Challenging for all areas of
our business to manage
increased energy costs
Agflation peaked in July
at 26.3%, and although
declining, it remains higher
than food prices.
Agflation has put pressure
on farmer spend, and this
is expected to continue as
it is not expected to fall to
historical levels
Increase in labour
cost and a smaller UK
workforce with UK job
vacancies at a at a
historically high level2.
Challenge for both the
Wynnstay business and
the businesses of our
customers in attracting
and retaining staff
Focus on careful contract
management and seeking
energy efficiencies where
possible
Specialists working with
our customers focused
on efficiency and on farm
optimisation
Offering competitive
salaries and attractive
working conditions with
development opportunities
Agricultural Policy
Reform
Growing Global
Population
Following Brexit, changes
to UK agricultural policy
are expected to continue,
including the introduction
of efficiency programmes
and schemes that reward
farmers for delivering
environmental outcomes
to replace Basic Payments
The global population is
expected to continue to
increase creating a higher
demand for food
This has provided
opportunities for key
product sectors as
farmers are incentivised
for efficiency,
environmental and welfare
outcomes
We have continued
to introduce specialist
products and services
accompanied expert
advice from our category
specialists
This has highlighted the
importance of UK food
security which presents
an opportunity for UK
farmers to produce high
quality and sustainable
food to feed a growing UK
population
Supporting farmer
customers to produce
food in an efficient and
sustainable way with
our dedicated category
specialists.
1 The Andersons Centre
2 Office for National Statics- Vacancies and jobs in the UK: October 2022
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc Our Pillars
EXPERT GUIDANCE
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.
ACQUISITIONS
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.
ORGANIC GROWTH
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.
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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ANNUAL REPORT AND ACCOUNTS 2022
Growth Strategy
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.
Acquisitions
Act as consolidator in
the UK agricultural supply
sector
Continue ‘bolt-on”
geographic transactions
Seek larger
opportunities to
complement existing
activities and enhance
economics of scale
Organic Growth
Enhance
relationships with
key customers
through CRM
Maximise
cross-selling
opportunities,
supported with
technical advice
from trained
colleagues
Develop new
sales channels,
including through
digital channels.
Seek new
depot and
operating centre
opportunities to
grow footprint and
increase efficiencies
Continuous
investment in
research and
development to
offer innovative
products
Recent Growth
Through Acquisition
Humphrey Feeds
& Pullets
Tamar Milling
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 13
ANNUAL REPORT AND ACCOUNTS 2022 14
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc Chairman’s Statement
“
These exceptionally
strong results are
significantly ahead of initial
market expectations.”
(Holdings) Limited
the Humphrey Poultry
The acquisition of
(“Humphrey”) businesses based in Hampshire in March for an
expected final consideration of £12.1m net of cash acquired, was a
strategic highlight in the year. In mid-November 2022, just after the
financial year end, we also acquired Tamar Milling Limited (“Tamar”), a
manufacturer and supplier of blended and coarse mix feed products
based in Cornwall, for an initial consideration of up to £1.5m. Both
acquisitions are earnings enhancing. In August 2022, we also raised
£10.3m net via an equity placing to UK institutional shareholders and
these new funds will support our ongoing acquisition and organic
growth strategy.
GROWTH STRATEGY
Wynnstay’s growth strategy is centred on three key pillars, organic and
acquisitive growth, a multi-channel sales approach, and Environmental,
Social and Governance (“ESG”) principles. At the forefront of the
Board’s thinking is our customer base of arable and livestock farmers.
We aim to ensure that the Group continues to provide them with
trusted advice, a wide range of products and services that cater for
their changing needs, and high customer service. Ultimately, our
objective is to support farmers to grow food profitably, sustainably and
in an environmentally enhancing manner.
Against the context of our growth strategy, I am very pleased to
highlight progress in the following areas in particular:
• Organic and acquisitive growth
• Our acquisitions of the Humphrey business and Tamar have
significantly expanded the Group’s trading footprint. They
have significantly extended our presence in the South of
England as well as in the Midlands and Wales, bringing new
farmer customer bases as well as additional supply chain
relationships.
• Both businesses have increased our feed manufacturing
capability, with the additional capacity also opening up the
opportunity to implement operational efficiencies.
• The Humphrey business has significantly increased our market
share in poultry feed for free-range egg production, boosting
our market share to an estimated c.11% from c.6%.
• We completed our investment projects at our seed processing
plant at Astley, which have added new capability and improved
efficiency.
• Organic growth also continues to be supported by our
investment in our specialist advisory services. Our two
industry events, The Arable Event and The Sheep and Beef
Event, which resumed in person in the year, also serve to
support technical knowledge transfer to farmers across our
trading regions and were very well attended.
• Multi-channel
•
Increased numbers of customers have now registered for our
digital portal, typically using it to access their accounts. While
farmers’ purchasing habits remain strongly aligned towards
depot-based purchases rather than digital purchases, we
nonetheless continue to monitor buying patterns closely as
we further develop our multi-channel sales strategy.
* Underlying pre-tax profit is a non-GAAP measure and is not intended as a substitute to GAAP
measures. Refer to the Finance Review for a reconciliation on the calculation of this measure
and the reasons for its use.
OVERVIEW
The Group performed strongly during the year and trading results set
new record highs across all key financial measures. It should be noted
that results benefited substantially from some singular gains that we do
not expect to be repeated in the new financial year.
Underlying pre-tax profit* (which includes these gains) rose by 98%
to £22.61m (2021: £11.44m) and revenues increased by 42% to
£713.03m (2021: £500.39m), with significant inflation primarily driving
the uplift in revenue. Reported profit before taxation was £21.12m
(2021: £10.99m). Basic earnings per share, including non-recurring
items, rose by 86% to 82.72p (44.40p).
These exceptionally strong results are significantly ahead of initial
market expectations. They reflect a combination of factors; the
benefits of growth and efficiency initiatives, farmer confidence, which
was underpinned by strong farm gate prices across most sectors, but
also significant one-off gains, in particular, stock gains in our fertiliser
activity which we do not believe will be repeated.
The advantages of the Group’s diversified business model, with its
broad spread of products across agricultural supplies, was again
evident, with less robust sub-sectors offset by more positive sector
performances elsewhere.
Both Divisions contributed increased revenue and operating profit,
with almost all the Group’s exceptional performance delivered by the
Agricultural Division. In this Division, feed volumes were c.6% higher
than last year and ahead of industry trends, and arable activities
benefited from record commodity prices and a good 2022 harvest.
Grain trading at GrainLink, our grain marketing activity, reached
record volumes and its contribution also benefited from a significant
one-off, non-cash gain at the end of the financial year that has since
unwound, as previously announced. Total seed volumes reduced
modestly, reflecting seasonal factors although the decrease in cereal
volumes also reflected our decision to reduce the number of low-
margin wholesale cereal seed trades. In line with industry trends,
fertiliser volumes were significantly lower than last year, which reflected
the extreme rise in prices created by the highly disrupted natural gas
market. These market conditions however also drove very significant
stock gains at Glasson Grain Limited (“Glasson”), resulting in an
exceptional performance, not expected to be repeated.
The Specialist Agricultural Merchanting Division performed very well,
helped by increased efficiency and strong branded bagged feed sales.
The unusually dry summer dampened demand for some product
lines. We continued to invest in and optimise our depot network,
including closing a depot at Bethania in mid-Wales, while successfully
transferring sales to neighbouring sites.
Our Joint Venture businesses, Bibby Agriculture Limited, which
provides feed and forage products, and WYRO Developments Limited,
which develops residential homes, both contributed to the Group’s
outperformance, delivering significantly higher contributions than
originally expected.
15
ANNUAL REPORT AND ACCOUNTS 2022 i
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• Environment, Social and Governance principles (“ESG”)
to shareholder approval at the forthcoming AGM on 21 March 2023.
• Our ESG work continued to evolve and we established a
Sustainable Farm Advisory Group in the year. It is made up
of recognised industry leaders, who are assisting us in the
development our ESG strategy and delivery plans.
• We launched a Holistic Whole Farm Solution in the year and
further advanced our offering of climate-friendly feeds.
• We intend to invest in on-site solar arrays, which will provide
the dual benefits of reducing the Group’s carbon footprint and
its exposure to the wholesale energy markets.
The total dividend payment represents the 19th consecutive year of
dividend growth since Wynnstay joined AIM in 2004. This dividend is
covered 4.1 times by profit after tax (2021: 2.8 times).
BOARD AND COLLEAGUES
The Board would like to acknowledge the dedication and hard work
of the Wynnstay team over the year. Our staff continue to provide
customers with an excellent service and on behalf of my fellow
Directors, I would like to thank everyone for their vital contribution to
the 2022 results.
FINANCIAL RESULTS
Group revenue increased by 42% year-on-year to £713.03m (2021:
£500.39m). This rise reflected significant commodity inflation and the
Humphrey acquisition making a first-time partial revenue contribution
of £31.58m.
Underlying Group pre-tax profit, the Board’s alternative performance
measure, rose by 98% to a record £22.61m (2021: £11.44m) over
the year. This includes the one-off trading gains, gross share of results
from joint ventures but excludes share-based payments and non-
recurring items. Reported pre-tax profit increased by 92% to £21.12m
(2021: £10.99m). Basic earnings per share increased by 86% to
82.72p (2021: 44.40p).
Both Divisions contributed to revenue and profit growth, with the
Agricultural Division delivering a 57% uplift in revenues to £564.26m
(2021: £358.96m), and the Specialist Agricultural Merchanting
Division a 5% rise to £148.77m (2021: £141.43m). The segmental
profit contribution (see Note 2 of the financial statements) from the
Agriculture Division increased by 247% year-on-year to £14.66m
(2021: £4.22m), with the Specialist Agricultural Merchanting Division
contributing £7.95m (2021: £7.15m), an 11% rise.
The Group generates good operational cash flows, with cash
generated from operations being £13.84m (2021: £10.57m) despite
the challenges of working capital inflation.
Cash and cash equivalents at 31 October 2022 increased by 53%
to £14.15m (2021: £9.24m). October typically represents the highest
point of net cash in the Group’s annual working capital cycle.
During the year, 75,891 new ordinary shares (2021: 89,687) were
issued to existing shareholders who exercised their right to receive
dividends in the form of new shares. The equivalent cash amount
totalled £0.46m (2021: £0.44m). A further 1,965,689 shares were
issued via the institutional equity placing and as a result of employee
options being exercised, for a total cash consideration of £10.58m
(2021: £0.59 million).
Capital investment in fixed assets amounted to £5.31m (2021:
£5.61m) in the year and £10.23m, net of cash acquired, was invested
in acquisitions (2021: £2.24m).
Group net assets at the financial year end increased by 24% to
£130.70m (2021: £105.72m), a record high. Based on the weighted
average number of shares in issue during the year of 20.722m (2021:
20.120m), this equates to £6.31 per share (2021: £5.25 per share).
Return on assets from underlying pre-tax profits, increased to 17.4%.
(2021: 10.8%)
DIVIDEND
The Board is pleased to propose an increased final dividend of 11.60p
per share, which is a rise of 10.5% year-on-year. The final dividend
will be paid on 28 April 2023 (2021:10.50p per share) to shareholders
on the register on 31 March 2023. Together with the interim dividend
of 5.40p per share, paid on the 31 October 2022, this makes a total
dividend of 17.00p per share for the year (2021: 15.5p per share), an
increase of 9.7% on the previous year. The final dividend is subject
We are delighted to welcome the senior management teams and
staff of Humphrey and Tamar to the Group. We are currently in
the process of recruiting a Head of Strategic Delivery to work with
senior management on key projects, including acquisitions and their
successful integration into the business.
Philip Kirkham, Board Vice-Chairman and Senior Independent Director
is due to retire in 2023. We have commenced a recruitment process
for an appropriately qualified successor and will make a further
announcement on the outcome of this process in due course.
OUTLOOK
The Group has made strong operational and strategic progress
against its goals. While a number of one-off gains drove an exceptional
financial performance this year, which we do not expect to be repeated
in the new financial year, Group performance was also very strong.
Looking ahead at prospects over 2023, the sector is facing inflationary
headwinds, as we have previously commented. We anticipate this
to impact raw material prices, as well as the Group’s energy, labour
and distribution costs. We plan to manage these headwinds through
efficiency and productivity improvements and other measures where
possible. Farmers are facing similar pressures although there have
been some welcome downward moves in energy and distribution
costs in recent weeks.
Financially, the Group generates good cashflows and the balance sheet
remains robust. This gives a solid platform for continuing development
and supports our ongoing investment plans. These include a major
programme of works at Carmarthen Mill, renewable energy projects
and investments in the depot network. In the meantime, the Board
continues to review acquisition opportunities that meet its criteria.
We believe that Wynnstay is in a good position to make further
progress and to achieve its growth targets for the financial year.
Steve Ellwood
Chairman
31 January 2023
“
We believe that Wynnstay
is in a good position to make
further progress and to achieve
its growth targets for the
financial year.”
16
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Datganiad y Cadeiryd
“
Mae’r canlyniadau
eithriadol gryf hyn
yn llawer gwell na’r
disgwyliadau marchnad
cychwynnol.”
TROSOLWG
Llwyddodd y Grŵp i berfformio’n gryf yn ystod y flwyddyn, gyda
chanlyniadau masnachu uwch nag erioed ar draws yr holl fesurau
ariannol allweddol. Dylid nodi bod y canlyniadau hyn wedi elwa’n
sylweddol o enillion penodol nad ydym yn disgwyl gweld eu hailadrodd
yn y flwyddyn ariannol newydd.
Aeth yr elw cyn-treth sylfaenol* (sy’n cynnwys yr enillion hyn) i fyny
o 98% i £22.61m (2021: £11.44m) ac aeth y refeniw i fyny o 42% i
£713.03m (2021: £500.39m), gyda chwyddiant sylweddol yn bennaf
gyfrifol am y refeniw uwch. Roedd yr elw a adroddwyd cyn treth yn
£21.12m (2021: £10.99m). Aeth enillion ar sail cyfranddaliad, gan
gynnwys eitemau anfynych, i fyny o 86% i 82.72c (44.40c).
Mae’r canlyniadau eithriadol gryf hyn yn llawer gwell na’r disgwyliadau
marchnad cychwynnol. Maen nhw’n adlewyrchu cyfuniad o ffactorau;
budd mesurau twf ac effeithlonrwydd, hyder ymhlith ffermwyr a hyn
wedi’i ategu gan brisiau cryf wrth gât y fferm yn y rhan fwyaf o sectorau,
ond hefyd enillion untro sylweddol ac yn enwedig enillion gyda stocs
gwrtaith na fydd, mae’n debyg, yn cael eu hailadrodd.
Roedd manteision model busnes arallgyfeirio’r Grŵp, gyda
chynhyrchion wedi eu gwasgaru ar draws nwyddau amaethyddol,
eto’n glir, a’r is-sectorau llai cryf yn cael eu gwrthbwyso gan berfformiad
gwell mewn sectorau eraill.
Mae’r ddwy Adran wedi cyfrannu at refeniw ac elw gweithredol uwch,
gyda bron i holl berfformiad eithriadol y Grŵp yn cael ei ddarparu gan
yr Adran Amaeth. Yn yr Adran hon, roedd y cynhaeaf porthiant 6% yn
fwy na’r llynedd ac yn well na phatrwm y diwydiant, a’r diwydiant tir
âr wedi elwa o brisiau nwyddau gwell nag erioed a chynhaeaf da yn
2022. Roedd y fasnach rawn yn GrainLink, ein masnach marchnata
grawn, yn well nag erioed a’i chyfraniad hefyd wedi elwa o enillion
untro di-arian-parod sylweddol ar ddiwedd y flwyddyn ariannol sydd
ers hynny wedi gorffen, fel y soniwyd. Roedd y cynhaeaf hadau i
lawr o ychydig, gan adlewyrchu ffactorau tymhorol, er bod y lleihad
mewn grawnfwydydd hefyd yn adlewyrchu ein penderfyniad i leihau
nifer y masnachau hadau grawnfwyd cyfanwerthu margin-isel. Yn unol
â phatrwm y diwydiant, roedd y cynhaeaf gwrtaith yn llawer is na’r
llynedd gan adlewyrchu’r cynnydd eithafol mewn prisiau oherwydd yr
aflonyddwch mawr i’r farchnad nwy naturiol. Fodd bynnag, arweiniodd
yr amodau marchnad hyn at enillion stoc sylweddol iawn yn Glasson
Grain Limited (“Glasson”), gan arwain at berfformiad gwych, ond na
fydd yn digwydd eto mae’n debyg.
Perfformiodd yr Adran Siopau Amaethyddol Arbenigol yn dda
iawn, drwy fod yn fwy effeithlon a gwerthiant cryf y porthiant mewn
bagiau brand. Roedd yr haf anarferol o sych wedi lleihau’r galw am
rai cynhyrchion. Parhawyd i fuddsoddi mewn, a gwneud y mwyaf
o’n rhwydwaith depos, gan gynnwys cau depo ym Methania yn y
Canolbarth a throsglwyddo’r gwerthu i safleoedd cyfagos.
Llwyddodd ein busnesau menter ar-y-cyd, Bibby Agriculture Limited,
sy’n darparu cynhyrchion porthiant, a WYRO Developments Limited
sy’n datblygu cartrefi preswyl, i gyfrannu at berfformiad gwych y Grŵp
gan gyfrannu’n llawer mwy nag yr oeddem yn ei ddisgwyl yn wreiddiol.
Roedd prynu cwmni busnesau Humphrey Poultry (Holdings) Limited
(“Humphrey”), sydd wedi’i leoli yn Hampshire, ym mis Mawrth am
17
bris terfynol disgwyliedig o £12.1m net, yn un o uchafbwyntiau
strategol y flwyddyn. Ganol Tachwedd 2022, ychydig ar ôl diwedd y
flwyddyn ariannol, prynwyd hefyd Tamar Milling Ltd (“Tamar”), cwmni
gweithgynhyrchu a chyflenwi cynhyrchion porthiant garw cyfunol
a chymysg wedi’i leoli yng Nghernyw, am bris cychwynnol o hyd at
£1.5m. Bydd y ddau bryniant yn cynyddu enillion. Yn Awst 2022,
codwyd £10.3m net drwy werthu cyfranddaliadau ecwiti i randdeiliaid
sefydliadol y DU a bydd y cyllid newydd hwn yn cynorthwyo ein
strategaeth twf prynu ac organig barhaus.
Y STRATEGAETH TWF
Mae strategaeth dwf Wynnstay yn canolbwyntio ar dair elfen allweddol,
twf organig a phrynu, gwerthu drwy sianeli lluosog, ac egwyddorion
Amgylcheddol, Cymdeithasol a Llywodraethu (“ESG”). Yn flaenllaw ym
meddwl y Bwrdd yw ein cwsmeriaid ffermwyr tir âr a stoc anifeiliaid. Y
nod yw sicrhau bod y Grŵp yn parhau i roi cyngor dibynadwy iddynt,
ystod eang o gynhyrchion a gwasanaethau i gwrdd ag anghenion sy’n
newid, a gwasanaeth cwsmer rhagorol. Yn y pen draw, ein nod yw
helpu ffermwyr i dyfu bwyd yn broffidiol, cynaliadwy ac mewn ffordd
sydd o fudd i’r amgylchedd.
Yn erbyn cyd-destun ein strategaeth dwf, rwy’n falch iawn o dynnu
sylw at gynnydd yn y meysydd canlynol, yn enwedig:
• Twf prynu ac organig
• Mae prynu cwmnïau busnesau Humphrey a Tamar wedi
ehangu ôl-troed masnachu’r Grŵp yn sylweddol. Maen nhw
wedi cynyddu ein presenoldeb yn sylweddol yn ne Lloegr
a hefyd yng Nghanolbarth Lloegr a Chymru, gan ddod â
chwsmeriaid ffermio newydd yn ogystal â chadwyni cyflenwi
ychwanegol.
• Mae’r ddau fusnes wedi cynyddu ochr gweithgynhyrchu
porthiant y busnes, gyda’r capasiti ychwanegol hefyd yn gyfle
i weithredu mwy o arbedion effeithlonrwydd.
• Mae’r busnes Humphrey wedi cynyddu’n sylweddol ein siâr
o’r farchnad porthiant dofednod ar gyfer cynhyrchu wyau
maes gan gynyddu ein siâr marchnad i tua 11%, o tua 6%.
• Rydym wedi cwblhau ein prosiectau buddsoddi yn ein ffatri
prosesu hadau yn Astley, gan ychwanegu capasiti gweithredol
a gwella effeithlonrwydd.
• Mae twf organig yn parhau i gael ei gynorthwyo drwy
fuddsoddi yn ein gwasanaethau cynghori arbenigol. Mae
ein dau ddigwyddiad diwydiant, y Digwyddiad Tir Âr a’r
Digwyddiad Defaid a Chig Eidion, ar ôl dechrau eu cynnal eto
wyneb yn wyneb, hefyd yn helpu i drosglwyddo gwybodaeth
dechnegol i ffermwyr ar draws ein rhanbarthau masnachu,
gyda phresenoldeb da iawn ynddynt.
• Sianeli lluosog
• Mae mwy o gwsmeriaid wedi cofrestru ar gyfer ein porth
digidol ac yn ei ddefnyddio fel arfer i gael mynediad i’w
cyfrifon. Er bod arferion prynu ffermwyr yn parhau i dueddu i
ddigwydd mewn depos yn lle drwy ddulliau digidol, rydym yn
parhau i fonitro’r patrymau prynu’n agos wrth i ni ddatblygu
ein strategaeth werthu drwy sianeli lluosog ymhellach.
* Mae elw cyn-treth sylfaenol yn fesur di-GAAP ac ni fwriedir iddo fod yn lle mesurau GAAP.
Dylid darllen yr Adolygiad Cyllid i ddeall mwy am sut y cyfrifwyd y mesur hwn a’r rhesymau
dros ei ddefnyddio.
ANNUAL REPORT AND ACCOUNTS 2022 • Egwyddorion Amgylcheddol, Cymdeithasol a Llywodraethu
(“ESG”)
• Mae’r gwaith ESG wedi parhau i esblygu gyda Grŵp Cynghori
Ffermydd Cynaliadwy wedi’i sefydlu yn ystod y flwyddyn.
Mae’n cynnwys arweinwyr diwydiant blaenllaw sy’n ein
cynorthwyo i ddatblygu ein strategaeth ESG a’n cynlluniau
darparu.
• Fe wnaethom hefyd lansio Ateb Fferm-Gyfan Holistig gan
ehangu eto ar ein cynhyrchion porthiant hinsawdd-gyfeillgar.
• Bwriadwn fuddsoddi mewn paneli solar lluosog ar-y-safle fydd
yn cynnig y fantais ddeuol o leihau ôl-troed carbon y Grŵp a’i
ddefnydd o’r marchnadoedd ynni cyfanwerthu.
CANLYNIADAU ARIANNOL
Aeth refeniw’r Grŵp i fyny o 42% o un flwyddyn i’r llall, i
£713.03m (2021: £500.39m). Roedd y cynnydd yn adlewyrchu
chwyddiant nwyddau sylweddol a phrynu’r busnes Humphrey,
tro-cyntaf o £31.58m.
gan greu cyfraniad
rhannol
refeniw
DIFIDEND
Mae’r Bwrdd yn falch o gynnig difidend terfynol uwch o 11.60c y
cyfranddaliad, sy’n gynnydd o 10.5% o un flwyddyn i’r llall. Byddwn yn
talu’r difidend terfynol ar 28 Ebrill 2023 (2021:10.50c y cyfranddaliad)
i randdeiliaid ar y gofrestr ar 31 Mawrth 2023. Gyda’r difidend interim
o 5.40c y cyfranddaliad, a dalwyd ar 31 Hydref 2022, mae hyn yn rhoi
cyfanswm difidend o 17.00c y cyfranddaliad am y flwyddyn (2021:
15.5c y cyfranddaliad), cynnydd o 9.7% o’i gymharu â’r flwyddyn
cynt. Bydd angen i gyfranddalwyr gymeradwyo’r difidend terfynol yn y
Cyfarfod Blynyddol ar 21 Mawrth 2023.
Mae’r taliad difidend hwn yn gynnydd am yr 19eg flwyddyn yn olynol
ers i Wynnstay ymuno â’r AIM yn 2004. Mae’r difidend hwn yn
cynrychioli cyfar difidend o 4.1 gwaith ar ôl treth (2021: 2.8 gwaith).
Y BWRDD A CHYDWEITHWYR
Hoffai’r Bwrdd gydnabod ymroddiad a gwaith caled y tîm yn Wynnstay
yn ystod y flwyddyn. Mae ein staff yn parhau i roi gwasanaeth
rhagorol i’n cwsmeriaid ac ar ran fy nghyd-Gyfarwyddwyr, hoffwn
ddiolch i bawb am eu cyfraniad hanfodol at ganlyniadau 2022.
i
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Aeth elw cyn-treth sylfaenol y Grŵp, sef mesur perfformiad arall
y Bwrdd, i fyny o 98% i £22.61m (2021: £11.44m) yn ystod y
flwyddyn, sy’n record. Mae hyn yn cynnwys enillion masnachu
untro a siâr gros o ganlyniadau mentrau ar-y-cyd, ond nid
taliadau cyfranddaliadau ac eitemau anfynych. Aeth yr elw cyn-
treth a adroddwyd i fyny o 92% i £21.12m (2021: £10.99m). Aeth
enillion ar sail cyfranddaliad hefyd i fyny o 86% i 82.72c (44.40c).
Mae’r ddwy Adran wedi cyfrannu at refeniw ac elw uwch, gyda’r
Adran Amaethyddol yn gyfrifol am dwf refeniw o 57% i £564.26m
(2021: £358.96m), a’r Adran Siopau Amaethyddol Arbenigol
yn gyfrifol am dwf o 5% i £148.77m (2021: £141.43m). Aeth
cyfraniad elw segmentau’r Adran Amaethyddol (wele Nodyn 2
yn y datganiadau ariannol) i fyny o 247% o un flwyddyn i’r llall,
i £14.66m (2021: £4.22m), gyda’r Adran Siopau Amaethyddol
Arbenigol yn cyfrannu £7.95m (2021: £7.15m) a chynnydd o 11%.
Mae llif arian gweithredol y Grŵp yn dda, gyda’r arian parod a
gynhyrchwyd gan ochr weithredol y Grŵp yn £13.84m (2021:
£10.57m) er yr her a gyflwynir gan chwyddiant cyfalaf gweithio.
Roedd arian parod a symiau cyfwerth ag arian parod ar 31 Hydref
2022 i fyny o 53% i £14.15m (2021: £9.24m). Fel arfer mis Hydref
yw’r mis gorau ar gyfer arian parod net yng nghylch cyfalaf gweithio
blynyddol y Grŵp.
Gwerthwyd 75,891 o gyfranddaliadau cyffredin newydd (2021:
89,687) i gyfranddalwyr presennol yn ystod y flwyddyn, gan ymarfer eu
hawl i dderbyn difidend mewn cyfranddaliadau newydd. Roedd y swm
cyfwerth mewn arian parod yn £0.46m (2021: £0.44m). Gwerthwyd
1,965,689 o gyfranddaliadau eraill fel cyfranddaliadau ecwiti sefydliadol
ac wrth i weithwyr ymarfer eu hawl opsiynau, am gyfanswm o £10.58m
(2021: £0.59 miliwn).
Roedd y buddsoddiad cyfalaf mewn asedau sefydlog am y flwyddyn
yn £5.31m (2021: £5.61m) a buddsoddwyd £10.23m, net arian parod
i brynu, mewn busnesau newydd (2021: £2.24m).
Aeth asedau net y Grŵp ar ddiwedd y flwyddyn ariannol i fyny o 24% i
£130.70m (2021: £105.72m), sy’n record. Ar sail y nifer gyfartalog wedi’i
bwysoli o 20.722m (2021: 20.120m) o gyfranddaliadau yn y flwyddyn,
mae’n cyfateb i £6.31 y cyfranddaliad (2021: £5.25 y cyfranddaliad).
Aeth y budd o asedau o elw cyn-treth sylfaenol i fyny o 17.4%. (2021:
10.8%)
Rydym yn falch iawn o groesawu uwch-dimau rheoli a staff
busnesau Humphrey a Tamar i’r Grŵp. Ar hyn o bryd rydym
wrthi’n recriwtio Pennaeth Darparu Strategol
i weithio gydag
uwch-reolwyr ar brosiectau allweddol, gan gynnwys busnesau
i’r busnes.
a brynwyd
hintegreiddio’n
llwyddiannus
a’u
Bydd Philip Kirkham, Is-Gadeirydd ac Uwch-Gyfarwyddwr Annibynnol
y Bwrdd, yn ymddeol yn 2023. Rydym wedi dechrau ar y broses o
recriwtio rhywun cymwys i fod yn olynydd iddo a byddwn yn gwneud
cyhoeddiad pellach ar ganlyniad y broses hon maes o law.
RHAGOLYGON
Mae’r Grŵp wedi gwneud cynnydd gweithredol a strategol cryf gyda’i
amcanion. Er i nifer o enillion untro gyfrannu at berfformiad ariannol
gwych eleni, sy’n rhywbeth na fydd yn cael ei ailadrodd yn y flwyddyn
ariannol newydd mae’n debyg, roedd perfformiad y Grŵp hefyd yn
gryf iawn.
Gan edrych ymlaen at y rhagolygon ar gyfer 2023, mae’r sector yn wynebu
ffactorau chwyddiant, fel y soniwyd. Rydym yn disgwyl i hyn effeithio
ar brisiau deunyddiau crai a hefyd ar gostau ynni, llafur a dosbarthu’r
Grŵp. Bwriadwn reoli’r ffactorau hyn drwy fod yn fwy effeithlon a
thrwy wella cynhyrchedd, a mesurau eraill lle bo hynny’n bosib. Mae
ffermwyr yn wynebu pwysau tebyg er bod costau ynni a dosbarthu
wedi gostwng rhywfaint yn yr wythnosau diwethaf, sydd i’w groesawu.
Yn ariannol, mae llif arian parod y Grŵp yn dda a’r fantolen yn parhau
i fod yn gadarn. Mae hyn yn rhoi llwyfan cryf i barhau i ddatblygu ac
yn cefnogi ein cynlluniau buddsoddi parhaus. Mae’r rhain yn cynnwys
rhaglen waith sylweddol ym Melin Caerfyrddin, prosiectau ynni
adnewyddadwy a buddsoddi yn y rhwydwaith depos. Yn y cyfamser,
mae’r Bwrdd yn parhau i adolygu unrhyw gyfle prynu sy’n cwrdd â’i
feini prawf.
Credwn fod Wynnstay mewn sefyllfa dda i wneud cynnydd pellach a
chyrraedd ei dargedau twf am y flwyddyn ariannol.
Steve Ellwood
Cadeirydd
31 Ionawr 2023
“
Credwn fod Wynnstay mewn sefyllfa dda
i wneud cynnydd pellach a chyrraedd ei
dargedau twf am y flwyddyn ariannol.”
18
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Chief Executive’s Review
“
The Group’s financial
results this year are exceptional.
They reflect a strong performance,
which was supported by a
favourable trading environment
across most sectors, very
significant one-off gains (which we
do not believe will be repeated)
arising from global events, and
inflation.”
cereal seed processing technology. Our major capital investment
programme at the Carmarthen feed mill has started and is on course
to be completed in early 2024. We are also considering options to
redevelop the mothballed feed plant at Calne in Wiltshire.
Environment, Social and Governance principles (“ESG”) is an important
pillar of Group strategy. We continue to provide products and services
to our customers that will help them deliver their environmental
ambitions, including meeting new Government policy and legislation,
in particular Environmental Land Management Schemes (“ELMS”), the
Sustainable Farming Scheme and Nitrate Vulnerable Zones.
REVIEW OF ACTIVITIES
AGRICULTURE DIVISION
The Agriculture Division manufactures and processes feed, fertiliser
and seed, in addition to supplying a comprehensive range of
agricultural inputs for both arable and livestock farmers. The Division
includes Glasson Grain Limited, GrainLink, the Group’s specialist crop
marketing business, and, since March 2022, the Humphrey business.
Revenue generated by the Agriculture Division increased by 57% to
£564.26m (2021: £358.96m) and segmental contribution rose by
247% to £14.66m (2021: £4.22m).
FEED
Feed products are manufactured at our main feed mills at Llansantffraid,
Carmarthen and Twyford (acquired in March 2022), supported by
three blending facilities at Rhosfawr, Condover, near Shrewsbury and
Whitstone in Cornwall (acquired in November 2022). We manufacture
feed for dairy, beef, sheep and free-range egg producers, the wide
offering providing an internal hedge against variations in individual
sector performance. Feed is offered in compounded, blended or
meal form and can be bought in bulk or bagged. The majority of the
Wynnstay-branded bagged feed is sold through our depot network.
Our customers are also able to source feed raw materials, liquid feeds
and feed supplements from us. We support our feed offering with a
INTRODUCTION
The Group’s financial results this year are exceptional. They reflect a
strong performance, which was supported by a favourable trading
environment across most sectors, very significant one-off gains (which
we do not believe will be repeated) arising from global events, and
inflation. These one-off gains predominantly arose from the fertiliser
processing activity at Glasson Grain Ltd, which experienced substantial
stock gains following the sharp price increases in natural gas over
2022, a key ingredient in fertiliser production, particularly following the
invasion of the Ukraine by Russia.
Inflation was a major feature during the year, which impacted grain
and feed prices as well as fertiliser prices. It contributed significantly
to the Group’s revenue outcome. Nonetheless, we managed these
inflationary pressures well, particularly in relation to energy, fuel and
labour costs. We have also sought to position the business to be able
to manage anticipated cost increases in the year ahead.
We are pleased to have outperformed national trends in the sectors
in which we operate, and have made material progress in expanding
the Group’s geographical coverage, as well as increasing Group
manufacturing capacity.
The acquisition of Humphrey Poultry (Holdings) Ltd (“Humphrey”),
based at Twyford in Hampshire, in March 2022, fulfilled multiple
strategic aims. Significantly, it has opened up new geographic
areas for us, particularly in the South of England, nearly doubled
our market share in poultry feed for free-range egg production, and
added additional feed manufacturing capacity, with the potential to
further enhance the Group’s feed manufacturing operations. A further
acquisition, Tamar Milling Ltd, an animal feed business based in
Cornwall, which we completed after the end of the financial year, has
expanded our geographic reach in the South West of England. Both
acquisitions are immediately earnings enhancing.
The Joint Venture businesses, particularly Bibby Agriculture Ltd and
WYRO Developments Limited, have performed very well, contributing
above our expectations.
We have continued to invest significantly in the business. Our
investment project at our seed processing plant in Astley was
completed, doubling grass seed mixing capacity and adding new
“
We are pleased to have outperformed national trends
in the sectors in which we operate, and have made material
progress in expanding the Group’s geographical coverage,
as well as increasing Group manufacturing capacity.”
19
ANNUAL REPORT AND ACCOUNTS 2022 i
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technical sales team, which provides on-farm specialist advice on
animal nutrition. This is a differentiator for us to the wider market.
Our feed volumes during the financial year increased by 6% to a record
level, and outperformed the national trend. Demand was boosted by
the dry summer, which reduced available grass and forage. Dairy feed
volumes were up by 7%, poultry by 2% and sheep by 5%. Although
feed volumes were strong, margins were affected by raw material
volatility and increased fuel and packaging costs, which we were not
able to pass on fully. This resulted in the contribution from feed being
slightly behind last year.
We have made further progress in enhancing the sustainability of our
offering, a key component of our overall strategy. We launched a
range of ruminant feeds that include a methane inhibitor approved by
the Carbon Trust. We are also working on a collaborative project to
reduce phosphate excretion from laying hens in order to reduce water
pollution.
The Humphrey business, which was acquired in March 2022, made
a good first-time contribution, in line with our expectations. This was
very pleasing given the pressures that the egg industry experienced
over the year, with feed, energy and labour costs increasing without
the corresponding increase in egg price. In addition, Avian Influenza
resulted in the culling of laying flocks, which also reduced feed
demand, a factor that is likely to continue in 2023, while the organic
sector has been affected by consumers trading down to cheaper
conventionally-produced eggs. We have successfully reduced our
cost base to mitigate these challenges.
Our major investment programme at Carmarthen Mill is well under way
and on schedule to be completed by early 2024. It will significantly
increase our feed manufacturing capacity as well as drive efficiency.
As part of the acquisition of the Humphrey business, we acquired a
mothballed feed plant at Calne in Wiltshire. The redevelopment of this
site will replace the leased facility at Twyford, which was retained by
the vendors. We are considering all our options in developing the site
to ensure optimal benefits as we expand capacity and take advantage
of the opportunities to increase our market share in the South West
of England.
The increase in the price of grain during the second half of 2022
resulted in significant feed price rises for the winter of 2022/2023.
Additionally, the mild autumn enabled farmers to keep livestock out at
grass longer than normal. This reduced feed demand during the early
part of the winter.
ARABLE PRODUCTS
Our arable operations supply a wide range of services and products
to arable and grassland farmers. These include seeds, fertilisers and
agro-chemical, as well as grain marketing services.
Overall, the Arable Division performed very well, with significant
contributions from GrainLink and our in-house fertiliser trading
operation.
GrainLink experienced an exceptional year, increasing volumes traded
by 31% to a record high. This reflected the good harvest yields in
both 2021 and 2022 and increased market share on the eastern side
of the country, where we had invested in additional resource. Grain
markets were extremely volatile in the period and GrainLink’s already
strong contribution to Group results received a significant boost by
an unusual and very short-lived surge in the price of wheat contracts
on 31 October 2022, our financial year end. As previously reported,
this was caused by the Russian Government’s decision, which was
reversed 72 hours later, to withdraw from an agreement allowing grain
to be exported from Ukraine. This short-lived price movement created
an additional, non-cash accounting profit of approximately £0.4 million.
GrainLink’s “Arable Event” successfully returned in June after a break
of two years due to the coronavirus. The specialised event attracted
around 800 farmers, who came to listen to keynote speakers and
obtain information on cutting-edge arable farming technology.
Total cereal seed volumes were 19% lower year-on-year. This reflected
an increase in “farmer-saved” cereal seed being used for autumn
plantings after the early and good quality 2022 harvest, and our
decision to reduce lower-margin wholesale sales. Demand for grass
seed was also lower, with the dry spring and summer resulting in a
smaller acreage of both conventional and environmental grass seed
being sown. Nonetheless, our grass seed volumes, which were down
by 9%, were better than the national market trend.
We completed the investment at our seed processing plant at
Shrewsbury. This has enabled us to double grass seed mixing
capacity. We also installed a colour sorter into the cereal processing
facility, which now enables us to process hybrid cereal seed. We are
collaborating with seed breeders and stakeholders within the sector to
ensure that we continue to deliver innovation to our arable customers.
Merchanted fertiliser sales performed ahead of last year and
management expectations. While the dry spring and summer, coupled
with significant price increases, flattened demand, particularly from the
livestock sector, improved margins more than offset lower tonnage.
A large acreage of winter cereals was planted in the autumn of 2022.
This typically results in a reduction of spring sown seed. The large
acreage of autumn sown seed bodes well for both demand for crop
inputs and a good harvest in 2023, although weather can influence
yield. We therefore view the outlook for the arable sector positively,
despite farmers’ increased input costs.
GLASSON GRAIN LIMITED
Glasson is the second largest fertiliser blender in the UK, and is based
at Glasson Dock near Lancaster. As well as fertiliser blending, Glasson
has two other core activities, the supply of feed raw materials and the
manufacture of added-value animal feed products.
Glasson delivered a record result, driven by exceptional one-off gains
from the fertiliser blending activity, which benefited from rising and
volatile raw material prices. This followed increases in the price for
natural gas – a key raw material in the production of fertiliser. Sanction-
related restrictions on Russian businesses tightened global supplies of
fertiliser products, substantially increasing fertiliser prices. Whilst this
reduced demand, it also generated significant stock gains for Glasson.
Gas prices rose again in the summer of 2022, resulting in further
fertiliser price rises. This was followed by the permanent closure of the
CF fertiliser production plant and certain manufacturers suspending
production, and the market remains tight.
The specialist animal feed operation experienced lower demand
for wild bird food and associated products, and margins were also
affected by rising energy and labour costs. The feed trading operation
performed ahead of management expectation, maintaining both
volumes and margins in a volatile market.
Agriculture - Revenue (note 2, pages 79-80)
£564.26m
£358.96m
£302.58m
Revenue generated by the Agriculture Division increased by
57% to £564.26m”
2022
2021
2020
“
Agriculture - Segment Result (note 2, pages 79-80)
2012
2021
2020
£4.22m
£2.88m
£14.66m
Segmental contribution rose by
247% to £14.66m”
“
20
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
21
ANNUAL REPORT AND ACCOUNTS 2022 22
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc Chief Executive’s Review continued
SPECIALIST AGRICULTURAL MERCHANTING
DIVISION
The Specialist Agricultural Merchanting Division comprises a
network of 53 depots, located within predominantly livestock areas
of England and Wales. The depots supply a range of products that
cater predominantly for the needs of farmers but also rural dwellers.
The depot network is supported by our multi-channel sales route to
market, which includes a sales trading desk, specialist catalogues
and a digital platform. The division also incorporates Youngs Animal
Feeds, based in Staffordshire, which manufactures a range of equine
products. These are marketed throughout Wales and the Midlands
region.
from
the Specialist Agricultural Merchanting Division
Revenue
increased by 5% to £148.77m (2021: £141.43m). Its segmental
contribution rose by 11% to £7.95m (2021: £7.15m), which was well
ahead of management expectations and driven by strong sales of
higher-margin products, such as own-brand bagged feed, as well as
increased efficiencies.
Like-for-like sales at the depots increased by 5% year-on-year. The
long, dry summer affected sales of certain product categories such as
crop packaging, animal health and fencing products, and spend on
certain discretionary items reduced.
We continued with our depot optimisation programme, closing the
Bethania depot in Ceredigion in September 2022 while retaining its
trade via other depots in the area. We also continued to invest in staff
training, so that customers benefit from valuable advice and guidance
on products and their usage. Depot staff also continue to work closely
with our on-farm specialists.
Youngs Animal Feeds has been affected by the cost-of-living increase,
particularly in the second half of the year, with volumes and margins
impacted by the squeeze on consumer spending. This is likely to
continue into the new financial year.)
JOINT VENTURES AND ASSOCIATE COMPANY
Wynnstay has three joint venture companies, Bibby Agriculture
Limited, WYRO Developments Limited and Total Angling Limited, and
an associate company, Celtic Pride Limited.
The combined contribution from our joint ventures and associated
company was significantly higher than budgeted at £0.80m (2021:
£0.68m). This reflected a strong performance from Bibby Agriculture
Limited and the completion of a housing development site at WYRO
Developments Limited.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(“ESG”)
ESG considerations are very important to us as we continue to develop
the Group. Our ESG strategy has two fundamental aims. These are to
achieve net carbon zero by 2040 and to help farmers feed the UK in
an environmentally and sustainable way.
In order to support our ESG strategy, during the year we set up a
Sustainable Farm Advisory Team, comprising industry experts. They
will work with the Board and with the Environmental and Sustainability
Manager and provide counsel on our strategy and delivery plans.
Over the next twelve months we will be focused on developing a
roadmap to enable the Group to fully integrate the recommendations of
the Financial Stability Board’s Task Force on Climate-related Financial
Disclosures (“TCFD”). This will improve and increase the reporting of
the Group’s climate-related financial information.
Internally, we have a number of programmes under way to reduce
carbon emissions and energy consumption. These cover the Group’s
lighting, vehicle fleet, biofuel use and power requirements. A major
initiative is a £1 million investment in solar photovoltaic panels at six
of our sites that have high electricity usage. We intend this to be the
first phase of a multi-site rollout of renewables over the next five years.
In terms of our offering to farmers, Wynnstay is well-placed to provide
solutions at all points of food production. Precision farming techniques
can play a significant role in reducing carbon emissions and protecting
soil, water and air quality. These include precision nutrient use for
crops and livestock feeding management. Careful soil management
is also critical to better environmental outcomes. New Government
policy and legislation in England and Wales, such as ELMS, the
Sustainable Farming Scheme and Nitrate Vulnerable Zones, are also
requiring farmers to adopt new practices.
We have continued to increase our offering of sustainable products
during the year, and launched our Holistic Whole Farm Solution
through our sales team. We also introduced into our range of ruminant
feeds a methane inhibitor, which has been approved by the Carbon
Trust, and are also working on other feed products.
Specialist Agricultural Merchanting
- Revenue (note 2, pages 79 – 80)
2022
“
Revenue from the
Specialist Agricultural
Merchanting Division
increased by 5% to
£148.77m”
2021
2020
£148.77m
£141.43m
£128.81m
Specialist Agricultural Merchanting
- Segment Result (note 2, pages 79 – 80) “
Operating profit
contribution rose by
11% to £7.95m”
2022
2021
2020
£7.95m
£7.15m
£5.78m
“
ESG considerations are very important to us as we continue
to develop the Group. Our ESG strategy has two fundamental
aims. These are to achieve net carbon zero by 2040 and to help
farmers feed the UK in an environmentally and sustainable way.”
23
ANNUAL REPORT AND ACCOUNTS 2022
Chief Executive’s Review continued
We take our social and community responsibilities very seriously. Our
‘Colleagues Forum’, introduced in the last financial year, gives our staff
the opportunity to more easily offer their views on how to improve the
business, and we wish to see this initiative further develop. We continue
to support the local communities in which we operate through projects
and supporting local charities. We also support the charitable efforts
of our staff, which include fundraising events for the Royal Agricultural
Benevolent Institution and Children with Cancer.
As a Board, we aim to maintain very high standards of appropriate
corporate and commercial governance, which will support the delivery
of long-term shareholder value.
COLLEAGUES
I would like to thank all our staff for their loyalty, commitment, and
dedication over the year. The Group’s record results have been
underpinned by their hard work in what was a challenging year, with
disruption from coronavirus, supply issues and the cost-of-living crisis.
Wynnstay colleagues have continued to demonstrate our values, and I
am extremely proud of them all.
OUTLOOK
Trading in the first two months of the new financial year was in line
with management expectations, and, looking further ahead, we remain
confident of continuing progress against our strategic plans. We are
also conscious of inflationary pressures, which will increase costs for
our customers, suppliers and consumers, and have taken steps to
manage these pressures. Farmgate prices are off the peaks of 2022,
and although there is sector variation, especially for free-range eggs,
prices are still strong against the average of the last five years.
The year’s excellent financial results included substantial one-off profits
that will not be repeated in the new financial year. Nonetheless, the
trading performance was also strong, and the Group remains well-
positioned to build on this performance.
We remain firmly focused on our long-term growth ambitions and are
investing with confidence across the Group and will continue to seek
complementary acquisitions.
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“ We remain firmly
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with confidence
across the Group
and will continue to
seek complementary
acquisitions.”
Gareth Davies
Chief Executive Officer
31 January 2023
24
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
25
ANNUAL REPORT AND ACCOUNTS 2022 26
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc Finance Review
TRADING RESULTS
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 19-24, including details of the significant acquisition of
Humphrey Poultry Holdings Limited (“Humphrey”) made during the
period.
The Group’s operations are divided into two main divisional reporting
segments, Agriculture, which encompasses the manufacturing and
supply of agricultural inputs delivered to customers, and Specialist
Agricultural Merchanting, which involves the supply of products,
primarily to farmers, linked through the provision of expert advice of
their use.
Group revenue in the period grew to £713.03m (2021: £500.39m), with
this 42% increase driven by very significant commodity inflation during
the year, and the acquisition of the Humphrey business. The inflation
mainly occurred in the Agriculture division in which the acquisition is
also now reported and these combined effects saw reported sales in
this segment increase by £205.30m or 57.2% to £564.26m (2021:
£358.96m). The Specialist Agricultural Merchanting division saw
growth of 5.2% to £148.77m (2021: £141.43m), again reflecting the
impact of inflation across many categories.
Group operating profit was £20.94m (2021: £10.61m), and profit before
taxation was £21.12m (2021: £10.99m). 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 £22.61m (2021: £11.44m). A reconciliation with the reported
income statement and this measure, together with the reasons for its
use is given below:
£000
2022
2021
Profit before tax
21,124
10,991
Share of tax incurred by joint ventures &
associates
Share-based payments
Non-recurring items
Underlying pre-tax profit
27
132
262
1,094
22,612
105
343
-
11,439
“
Group revenue
in the period grew
to £713.03m (2021:
£500.39m), with this
42% increase driven
by very significant
commodity inflation
during the year, and
the acquisition of the
Humphrey business.”
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 £14.66m
(2021: £4.22m), while our Specialist Agricultural Merchanting division
produced £7.95m (2021: £7.15m). Other activities generated a
small profit of £0.23m (2021: £0.09m loss).
Over the course of the year, the Group issued a number of trading
updates to inform the market of expected improvements in the
reported results for the period. These updates were mainly the result
of external factors causing increases in fertiliser commodity values
which subsequently resulted in one-off gains in the Glasson fertiliser
raw material stock book. The combined effect of these gains has been
the main driver of the increase in reported profits for period, but they
are not expected to be repeated in the new financial year. Additionally,
on 14 November 2022 we reported that the unusual movement in the
ANNUAL REPORT AND ACCOUNTS 2022 price of wheat contracts on the London ICE Futures market on 31
October 2022 would accelerate the accounting recognition of certain
derivative gains. This unusual price movement had been caused by
the Russian Government’s announcement over the previous weekend
that they would withdraw from the Ukraine grain export agreement,
a decision that was reversed within 72 hours and which effectively
extinguished the gains recorded on the 31 October 2022. However,
in accordance with International Financial Reporting Standard 9, the
respective derivative contracts are required to be valued in accordance
with the appropriate market price as at the financial year end, This
non-cash accounting adjustment added approximately £434,000 to
the results of the year under review, but will effectively reverse in the
new financial year.
The Group’s tax charge including joint ventures of £4.11m (2021:
£2.16m) represents 19.4% (2021: 19.5%) of the Group pre-tax profit
of £21.26m (2021: £11.09m), with the reduction related to the benefits
from claiming the capital allowance super deductions available for
relevant investments. A reconciliation relating to Group’s tax charge
and Group pre-tax profit is given below:
£000
Group’s tax charge
Taxation
2022
2021
3,982
2,057
Share of tax incurred by associate and joint venture
132
105
4,114
2,162
Group pre-tax profit from continuing operations
Profit before taxation from operations
21,124
10,991
Share of tax incurred by associates and joint ventures
132
105
21,256
11,096
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 82.72p (2021: 44.40p), based on a
weighted average number of shares in issue during the year of 20.722m
(2021: 20.120m). The Board proposes to recommend the payment of
a final dividend of 11.60p per share to be paid on the 28 April 2023,
which when added to the interim dividend of 5.40p per share paid
on the 31 October 2022, makes a total of 17.00p for the year (2021:
15.50p), an increase of 9.7%. The total dividend is expected to be
covered around 4.1 times (2021: 2.8 times) by profit after tax. The
total dividend represents the nineteenth 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 £16.55m, (2021: £16.47m) and are adequate to cover nearly four
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.
Working Capital, Cashflow and Net Cash
The significant commodity inflation referred to earlier in this report has
created considerable challenges with the management of working
capital, exacerbated by the seasonal and intra-month requirement
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peaks. The October year end does represent a trough in the Group’s
annual seasonal working capital cycle and therefore usually results
in the highest reported cash position which can mask maximum
requirements. Working capital, simply defined as inventories plus
current trade and other receivables less current trade and other
payables, stood at £62.66m at the year end compared to £46.85m
the previous year. This 34% increase is a reasonable indicator of the
additional cash absorption the inflationary environment has created,
but the business continues to generate positive strong operational
cashflow which has adequately funded this requirement.
Cash generated from operations amounted to £13.84m (2021:
£10.58m), and this was supported by an equity fundraise concluded
in August 2022 which raised £10.26m net, to support investment
plans. The reported net cash position at the year-end was £14.15m
(2021: £9.24m). 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 £18.20m (2021:
£15.46m).
Share Capital and Balance Sheet
During the year a total of 75,891 (2021: 89,687) new ordinary
shares were issued for a total equivalent cash amount of £0.457m
(2021: £0.439m) to existing shareholders exercising their right to
receive dividends in the form of new shares. A further 1,965,689
(2021: 158,138) shares were issued for a total cash consideration of
£10.580m (2021: £0.586m), of which 1,900,000 shares were issued
in a private placing to institutional holders and 65,689 were issued to
employees exercising rights over approved share options.
Group net assets at the year end amounted to £130.70m (2021:
£105.72m), which based on the weighted average number of shares
in issue during the year of 20.722m (2021: 20.120m) equated to a
net asset value per share of £6.31 (2021: £5.25 per share). Based
on the weighted average number of shares in issue at the year end of
22.340m (2021: 20.299m), this net asset per share value was £5.85
(2021: £5.21). During the financial year the share price traded in a
range between a high of £6.45 in June 2022 and a low of £4.87 in
November 2021. Based on these balance sheet values, Return on
Net Assets from Underlying Pre-tax profits was 17.4% (2021: 10.8%).
Capital investment in fixed assets including right of use assets,
amounted to £5.31m (2021: £5.61m) in the year, while a further
£10.23m, including previously deferred consideration, was invested in
acquisitions (2021: £2.21m).
28
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
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. £713.03m
(2021: £500.39m).
ADJUSTED EBITDA:
Earnings before interest, tax, depreciation and amortisation, and investment property fair value adjustment, tax on joint ventures, goodwill
impairment, share-based payment expenses and other non-cash charges. £28.31m (2021: £18.21m).
A reconciliation of this measure to reported IFRS profit before tax is provided below:
£000
IFRS reported pre-tax profit
Investment property fair value adjustment
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
Adjusted EBITDA
Property lease payments
Adjusted EBITDA after operating lease payments
EARNINGS PER SHARE:
2022
21,124
522
132
(218)
490
6,375
416
(531)
28,310
(2,281)
26,029
2021
10,991
-
105
(74)
190
6,139
477
386
18,214
(2,419)
15,795
Profit for the year after taxation divided by the weighted average number of shares in issue during
the year 82.72p (2021: 44.40p).
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 £22.61m (2021: £11.44m).
RETURN ON NET ASSETS:
Underlying pre-tax profit, with intangible amortisation added back, divided by the balance sheet net asset value. 17.4% (2021: 10.8%).
NET ASSETS PER SHARE:
The balance sheet net asset value, divided by the weighted average number of shares in issue during the year. £6.31 (2021: £5.25).
GOING CONCERN
As part of their normal year end processes the Board have reviewed commercial plans and budgets for the new financial year, together with
assessing the principal identified risks and uncertainties for the Group. Detailed cashflow projections have been prepared and considered against
available funding sources, which at the year-end included net cash of £14.2m, plus £10.5m of undrawn revolving credit facilities and £10.5m of
unused overdraft facilities with HSBC Bank UK Plc. The Directors have therefore concluded that they have reasonable expectation that the Group
has adequate financial resources to support the operational requirements of the business for the foreseeable future, and that it is appropriate to
continue adopting the going concern concept in the preparation of financial statements.
The Board are pleased with the financial performance of the Group during a year which has presented many financial and commercial challenges
which have been effectively managed, with the business continuing to demonstrate the resilience of its focused “farmer first” business model.
29
Paul Roberts
Finance Director
31 January 2023
ANNUAL REPORT AND ACCOUNTS 2022 i
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Wynnstay Group Plc Company Information
DIRECTORS
S J Ellwood - Chairman
P M Kirkham
H J Richards
C Bradshaw
G W Davies – Chief Executive
B P Roberts – Finance Director
SECRETARY
C A Williams
COMPANY NUMBER
2704051
REGISTERED OFFICE
AUDITOR
PRINCIPAL BANKERS
NOMINATED ADVISOR &
STOCKBROKER
REGISTRARS
Eagle House
Llansantffraid-Ym-Mechain
Powys
SY22 6AQ
RSM UK Audit LLP
20 Chapel Street
Liverpool
L3 9AG
HSBC UK Bank PLC
Wales Corporate Banking Centre
15 Lammas Street
Carmarthen
SA31 3AQ
Shore Capital and Corporate Limited
Cassini House
57 St James’s Street
London
SW1A 1LD
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
SOLICITORS
Harrisons Solicitors LLP DWF LLP
30 Broad Street 5 St Paul’s Square
Welshpool Liverpool
Powys L3 9AE
SY21 7RR
30
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Principal Risks and Uncertainties
For the year ended 31 October 2022
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. A
risk register is maintained and regularly reviewed, with emerging concerns identified and overseen by the executive directors, supported by the
wider executive team and the specialist knowledge available across the Group. The non-executive directors provide oversight and scrutiny in this
area to ensure that risk management is appropriately aligned with commercial strategy.
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: Health and safety protocols
An absolute priority for the Group remains the safety, health
and welfare of our colleagues, customers, suppliers and
the communities in which it operates. Causing harm to any
individuals through the Group’s activities or actions creates
moral, reputational and financial risk to the organisation,
as well as potential disruption through absence, loss of
experience and other consequential implications.
The Group has taken tangible actions over the last year to
strengthen and embed the culture of mutual responsibility
for health and safety matters. Initiatives have included
extended training, increased dedicated resource, enhanced
auditing and external system and policies reviews.
While considerable experience has now been developed to
manage safety concerns around coronavirus, the possibility
of infection breakouts remains, both locally and nationally,
and as such activities could easily be disrupted again
through staffing issues or other restrictions. Coronavirus and
the threat of other disease outbreaks continue to present a
number of different risks to the business.
Despite the removal of many restrictions nationally, the
Group has maintained some of the protocols previously
used to control the pandemic as these are now believed
to be good practise. These include continuing remote
working and virtual meetings where appropriate, retention
of certain protective equipment and a continuing isolation
policy for confirmed or suspected infections.
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 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.
The potential risk of cyber attacks has increased with the
expansion of the business and the use of remote working.
Investment has increased to update both hardware and
operating software solutions.
Continuing
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 overruns and other project management issues.
A number of these projects have now commenced including
the first phase of the capacity expansion at Carmarthen
and the planning phase for the new mill for the Humphreys
business.
Considerable time and effort have been invested in
obtaining expert external professional support to the
design, planning and implementation phases of these
projects. The Group now also has an internal engineering
manger to co-ordinate and take responsibility for the
delivery of these critical plans, and regular reviews take
place with the individual project teams who then report to
the Board on progress.
31
ANNUAL REPORT AND ACCOUNTS 2022 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.
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.
The wider economy has experienced a period of considerable
volatility with higher cost inflation, increased interest rates
and comparative devaluation of Sterling against other major
currencies. The Group cannot be immune to such general
pressures.
Various hedging strategies have been used to fix costs
where possible including, in the electricity and fuel
markets. Management are also tasked with seeking
forward commitment arrangements utilising the Group’s
strong balance sheet where appropriate.
Increasing
Operational: Recruitment, retention and development of our key people
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Recruiting and retaining the right people is crucial to the
success of the Group. Very tight recent labour markets have
exacerbated recruitment issues and increased employment
costs across the whole spectrum of the Group’s activities.
Increasing
Financial: Availability of finance and interest rates
Fluctuating commodity prices can adversely impact the
Group’s working capital requirements and increases in
interest rates raise the Group’s cost base and can limit
capital availability. Recent Bank of England policy has been
to increase interest rates to contribute to managing high
inflationary pressures.
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.
At the end of the financial year, the Group paid an Income
Supplement of £750 per person to help with the current
cost of living concerns and assist employee retention.
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.
Increasing
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 arable
activities and so customer demand can be impacted by the
weather which, in turn, could lead to volatility of earnings.
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.
- Consumer awareness
There is growing evidence of consumer awareness and
concern about sustainability of products purchased, including
food.
The Board monitors developments in consumer buying
patterns in relation to sustainability and the Group is
active in industry trade associations and maintains close
contact with government policy development.
- Avian Influenza
The recent increasing incidents of this highly pathogenic
disease affecting farmed poultry as well as wild birds
represents serious commercial risks to an important customer
sector for the Group’s feed business.
The Company has implemented appropriate bio-security
measures to minimise the risk of contributing to the
spread of the disease, including limiting farm visits,
utilising single use protective clothing and disinfecting
regimes for feed delivery vehicles.
- 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.
The Board oversees environment and
regulatory
from
compliance by
management and monitoring the results of internal
reviews and external compliance audits.
regular updates
receiving
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
32
Principal Risks and Uncertainties continued
RISK
DESCRIPTION OF RISK
MITIGATING ACTIONS
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.
Customers are credit checked and appropriate limits set up
prior to goods being supplied. The Group actively monitors
accounts using the credit control policy and the Board
regularly monitors debtor days. The historic incidence of
bad debts is low.
- Grain trading business
The grain trading business derives a significant proportion of
revenue from a small number of key customers, leading to
substantial customer credit balances.
The Group utilises credit insurance in order to provide
partial cover against default by certain large customers for
grain.
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 in 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.
Increasing
Operational: War in Ukraine
The conflict in Ukraine caused significant disruption to
global trade flows of certain agricultural commodities, both
through the direct blockades on exports and through the
implementation of sanctions on Russia, who was a major
exporter of energy and fertiliser products.
Increasing
Operational: Brexit and the political backdrop
Whilst the initial blockade on the export of wheat, sunflower
and other commodities from Ukraine had limited practical
effect on the UK, it had a dramatic impact on prices. The
Group’s policy of forward buying mitigated the immediate
impacts and enabled prices to be adjusted over the normal
supply cycle. However, the sanctions on many Russian
businesses closed off important sources of some fertiliser
products. The Group’s diverse supply chain enabled the
business to react to these rapidly evolving circumstances
and switch restricted supplies to alternative sources
elsewhere in Europe.
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 the commercial
prosperity of the Group’s predominant farmer customer base.
We continue to closely monitor the government’s Brexit
arrangements and adapt our plans to respond to the latest
arrangements. New free trade agreements with countries
such as Australia, have created concerns over agricultural
products and the Group receives consultancy input on the
implications of such arrangements.
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.
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.
- 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, initially with different priorities for accessing
payments going forward. A potential reduction in the funding
may lead to uncertainty and impact our customer buying
patterns.
respective government’s agricultural
The
legislative
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, particularly any change of policy direction
that may result from changes in government cabinet
priorities.
33
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group PLC - Section 172 Statement
Financial Year ending 31 October 2022
BACKGROUND
STAKEHOLDERS
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 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 2022, 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 continues to identify five main stakeholder groupings
associated with the business, and have 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 on engagement can be found in 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 been 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 – the 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,
and the Group selects certain charities to support on an annual basis.
34
ANNUAL REPORT AND ACCOUNTS 2022 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 Health & Safety Improvements – The Board’s
overriding priority continues to be the safety and welfare of
colleagues, customers, suppliers and communities. The global
Covid 19 pandemic created significant social and economic
disruption, and as the pandemic waned and restrictions eased in the
wider economy, the policies in place in the Company were reviewed,
and many were recognised as having longer term advantages to the
business and have been adapted for continued use. These include;
remote working where appropriate and productive, virtual meeting
scheduling and a continued policy of Covid positive isolation.
Additionally, the Board commissioned an external review of existing
health & safety policies across the Group to ensure necessary
revisions were identified and suitably implemented.
Business activities have adapted well to the longer term sustainable
working practises, and many colleagues have reacted positively to
the productivity benefits of reduced commuting and business travel
requirements.
All
The continuing improvement process and additional resources
invested in health & safety management have produced tangible
benefits in terms of the reduction in the number of incidents during
the year to the benefit of all stakeholders.
Health & Safety must be embedded in the culture of the organisation,
and this has undoubtedly been strengthened by the Covid response.
Covid 19 whilst being a devastating occurrence, has undoubtedly focused attention on the critical importance of ensuring procedures and processes are fit for
purposes and the Group will be in a stronger position to weather future such challenges. Embedding a culture of Health & Safety awareness is a priority for the
business.
Assessment and approval of Acquisitions – In accordance
with the well communicated acquisition element of the Group’s
strategy, the Board approved two acquisitions during the year. Both
transactions involved considerable negotiation and due diligence and
concluded in accordance with anticipated timeframes. Humphrey
Feeds & Pullets completed in March 2022 with integration well
underway, while Tamar Milling completed just after the year-end.
Customers
Suppliers
Shareholders
These transactions continue the Group’s historically successful
track record of identifying, negotiating with, and integrating relevant
acquisitions. While it is premature to accurately assess the long
term success of these specific transactions, the early signs are that
they will both positively contribute to the overall performance of the
business and be earnings enhancing.
Further acquisitions have strengthened the Group’s presence in the South and South West regions of England, and enhance the Company’s brand and reputation
in the agricultural and farming sectors of the UK.
Financial approval of, and practical commencement of Phase
1 expansion of Carmarthen Mill - A significant element of the
Group’s plans to expand its feed manufacturing business has for
some time been the investment in doubling the capacity of the
mill in Carmarthen, South Wales. After a considerable period of
planning, preparation and market analysis, the first major phase of
this investment was signed off for the sum of £1.6m in the summer,
with work getting underway immediately.
Customers
Colleagues
Suppliers
Shareholders
The practical commencement of the first phase of the project
has demonstrated the tangible commitment of the business to its
customers, colleagues and suppliers in the South Wales area, with
a noticeable positive reaction. Whilst the phase is not expected
to be fully commissioned until May 2023, the initial throughput
improvements expected to be seen will create the added
commercial opportunities to generate a more than acceptable
return for shareholders.
The investment in modern and efficient manufacturing resources demonstrates the Board’s commitment to this business sector in a highly visible manner with a
positive sentiment being created for all those involved.
Management Development and Succession Planning – The
Board support the Chief Executive Officer in regularly reviewing the
quality of the Group’s executive management resources and depth.
Following the adoption of the expansion strategy two years ago, the
need for additional resources were identified within a framework of
sensible cost control.
All
During the year, a number of new roles were created and supported
by the Board to facilitate and support the growth plan, including
a Group Engineer and Project Executive. A Group wide Executive
Management team is now well established to support the CEO and
provides a wide range of commercial experience into the business.
The continued strengthening of the Group’s management team and structure sets a sound platform in place for the continued expansion and growth of the
business.
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 35 was approved by the Board of Directors on 31 January 2023 and signed on its behalf by Steve Ellwood and Paul Roberts.
35
ANNUAL REPORT AND ACCOUNTS 2022 Environmental Strategy
OUR ENVIRONMENT
“Our mission is to help the farmer to feed
the UK in a more sustainable way”
The Group has been progressing with its main environmental target to reach net zero carbon emissions with our own operations
(scope 1 + scope 2) by 2040.
This progress has focused on internal operations across the group with investments in manufacturing efficiencies alongside low
carbon technology. Further investments in low carbon electricity generation have been agreed for 2023.
Task Force on Climate-related Financial Disclosures (TCFD)
The Group recognises the significance of climate change and its impact as a business risk. We are on a journey to reduce our impact on the
environment reducing carbon emissions in our own operations (scope 1 + scope 2) and influences a reduction in the wider supply chain (scope
3). We recognise that tackling climate change requires a long term approach, so we are supportive of the TCFD’s aims and objectives. With
this in mind, we anticipate it will take time to map all risks ensuring we develop a rigorous system over the next 12 months to fully integrate the
recommendations of TCFD within the way we operate and undertake business. As a requirement of an AIM-listed business, Wynnstay will be
preparing a full TCFD to be reported in our 2023 Annual Report.
INTERNAL OPERATIONS
Manufacturing Efficiencies
As detailed in 2021 Annual Report, an investment program in our
manufacturing feed mill at Carmarthen site is underway. As a result of
this continued investment to install new plant and equipment, we have
seen a typical 30% energy reduction in kilowatt (kW) input to tonnes
output.
Low Carbon Technology
We are on-track with our LED lighting roll out plans and have installed
LED lighting at 90% of our own sites. Our plan is to install LED lighting
at all our other sites by the end of 2023. The impact of this has resulted
in over 50% energy saving across the sites.
have not yet introduced full electric vehicles as there is concern over
range and charging infrastructure. We have trialled an electric van and
believe there are areas of the business where this type of vehicle would
work.
As we progress with investments in low carbon hybrid-engine vehicles,
we have installed 24 electric vehicles charging points at 6 of our sites.
With a large forklift truck (FLT) fleet across our depot and manufacturing
site network, we have successfully trialled electric powered FLT’s at
a high usage warehouse site. As a result of these trials, we aim to
transition across to electric FLT’s in line with our fleet renewal schedule,
moving from 30% of the fleet running on electric today towards 100%
over the next 7-10 years.
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We currently have 18 hybrid engine vehicles which represents 12%
of our company car fleet. With the current vehicles “on order” and
no increase in company car numbers this figure will rise to 18%. We
As detailed in last year’s report, we have been utilising various blends of
biofuels ranging from 7% up to 20%. Generally, these have performed
well, however we do need to investigate further the impact of weather
on the performance and how frequently fuel filters need changing. We
36
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Environmental Strategy continued
aim to continue with our program of using B20 fuel in the summer and
a lower blend in the winter. Availability of new heavy goods vehicles
(HGV’s) has restricted the opportunity to trial any further bio-blend
levels. Onwards plans for the next 2 years are to reduce the average
age of the fleet, this will improve fuel usage alongside provide further
scope for trial work.
The Group has a large electricity demand; this is predominantly
utilised at manufacturing sites. As the Group continues to grow and
decarbonise, we are mindful that our electricity requirements will
increase (carbon emissions moving from Scope 1 to Scope 2).
We have recently agreed to install 1MWp of solar PV (photovoltaics)
panels on six of our sites with high electricity usage. We will benefit
from self-generating a portion of our own electricity, reducing reliance
on the national grid infrastructure, alongside reducing our carbon
emissions associated with energy usage. We expect this initial
investment to reduce our scope 2 emissions by up to 5% (based on
current electricity usage). This is the first stage of a multisite investment
rollout of renewables over the next three to five years.
EXTERNAL
As we develop our Group sustainability proposition, a key part
of this focuses on our primary mission centred around delivering a
sustainable farming future. We aim to develop closer relationships with
our farming customer base taking a Holistic Whole Farm view with
any knowledge transfer or product recommendations to ensure we
build profitable, efficient, resilient farm businesses that tackle climate
change and reverse biodiversity loss.
Crops and Forage
Over the last 12 months, Wynnstay have invested in upskilling staff
knowledge with more qualified personnel as FACTS qualified advisors
(FQA’s). FQA’s promote farming methods that optimise crop nutrition
alongside protecting soil, water, and air quality.
We have been progressing with our seed offering, aligning mixtures
to current and future demands to integrate diversity into arable and
livestock cropping rotations. We have seen increases of over 50% in
sales of cover crops this year due to the greater focus on the positive
impacts cover crops can have as well as reducing inputs. The affinity
between good farming practice, the surrounding environment and soil
health whilst focusing on productivity remains at the forefront of many
conversations.
37
Health
As we work towards our mission to deliver a sustainable farming future,
ensuring livestock are healthy and productive is essential in building
profitable and environmentally sound farm businesses. Wynnstay
have continued to invest in skill sets to facilitate this. During 2022,
14 Wynnstay specialists qualified through a 2-day training course to
become qualified Cow Signals advisors. This focuses on removing
bottlenecks in health and performance of livestock to increase the
productive life of cows.
Nutrition
In 2021 we introduced a climate range of livestock feed focused on
raw materials with a range of soya-free and palm-free rations. In 2022
this range has been expanded to include a methane reducing additive.
This reduces methane emissions and increases livestock efficiency. We
are seeing good growth in this product category with a 30% increase
in sales over the last 12 months. We envision this climate ranges will
continue develop as a result of further supply chain requirements from
processors, retailers, and consumers and the need for farms to reduce
their environmental impact.
ANNUAL REPORT AND ACCOUNTS 2022 Streamlined Energy and Carbon Reporting (SECR) Statement 2021 / 22
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
31 October 2022. As this is the third year of reporting, we shall be comparing this year to the previous 2020/21 year, however the benchmark
2019/20 year is shown in the table.
Wynnstay Group used 12,832 (2021: 12,466) carbon dioxide equivalent tonnes (tCO2e) of energy during the year. 32% (2021: 31%) of energy
was used in producing compound and blended feeds in our production plants, which saw the addition of Humphreys from April 2022. A further
58% (2021: 56%) was used by our fleet of vehicles, this percentage increase being driven by an absolute rise in the litres of Derv used again
reflecting the addition of the Humphrey business. Both production and transport efficiency are key to our energy savings plans, as we continue
to seek efficiencies in factory throughput and miles achieved per litre for 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 2022 was 7.24tCO2e (2021: 7.62tCO2e) 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 2022. 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 2022 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 (tCO2e)
Scope 1 Emissions
Scope 2 Emissions
Scope 3 Emissions
Total Emissions
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2021/22
Previous
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2020/21
2019/20
9,682
9,197
9,086
3,127
3,249
3,582
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12,832
12,466
12,710
Traded tonnage of agricultural inputs and grain
1,772,821
1,635,788
1,560,895
Carbon intensity ratio (tCO2e/1000t traded)
7.24
7.62
8.14
Total UK energy usage (kWh)
57,910,122
54,499,274
53,320,243
38
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Values
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
39
ANNUAL REPORT AND ACCOUNTS 2022 Values
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.
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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.
40
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Social
EMPLOYEE ENGAGEMENT
Our Colleague Forum is a group of 21 individuals from across the
business who meet to operate as a mechanism to seek input into the
Group’s strategic decision-making process, encourage involvement
in business performance and increase awareness of the financial
and economic factors affecting the Group. The forum met twice
during the year, with each meeting also including a presentation
from a key business representative to provide insight to their specific
responsibilities and business offering to the Group.
Our Colleague Ideas Hub is a route for individuals from across the
Group to submit ideas and suggestions of ways in which to improve all
aspects of our business. Individuals are recognised for their own ideas
and rewarded for suggestions which are progressed and implemented.
We were pleased to have received 9 suggestions which have been
considered by Senior Management during the year.
Our Wynnstay Connect platform engages colleagues with company
strategy, initiatives, and developments, along with enabling efficient
interactive communications across the Group. The platform also
provides easy access links to career and development and benefits
hubs, including pension and Save as You Earn Share scheme portals,
which promote heightened engagement with and management of
individual’s personal long-term savings plans and needs.
PEOPLE MANAGEMENT AND DEVELOPMENT
FRAMEWORK
Our People Management and Development Framework works
to preserve our 1st Choice Employer brand while providing a set
of principles and guiding policies and processes to support the
management and progression of colleagues across the Group. The
core focus of the framework is to support the attraction, retention
and development of our people, providing management teams the
comprehensive tools they need for the career management and
development of individuals and their teams.
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ANNUAL REPORT AND ACCOUNTS 2022
TRAINING AND DEVELOPMENT
Our business is built on the foundation of offering customers the
highest standards of customer service and specialist advice. A key
part of delivering this service is the training and development of our
people, which not only ensures a high service level, but also offers
career progression for our colleagues.
We offer a range of training courses and professional qualifications
across our business which includes:
• Management and Leadership- 20Twenty Business Growth
• Sales and Personal Development- Wynnstay Sales Academy
• Specialist Expertise- BASIS (Pesticides and Fertiliser), FACTS
(Fertiliser), AMTRA (Animal Health), Wynnsan Training Academy
(Dairy hygiene), Cow Signals (Livestock health and welfare)
• People Management and Development- Chartered Institute of
Professional Development
• Marketing Management- Chartered Institute of Marketing
• Finance- Chartered Institute of Management Accountants
• Health and Safety- Institution of Occupational Safety and Health
DIVERSITY AND EQUAL OPPORTUNITIES
Wynnstay is proud to be an inclusive equal opportunities employer
within its geographical communities and promotes diversity at all levels
of the business. Wynnstay aims to provide a working environment
that respects the rights of each individual and where colleagues treat
each other with respect. Any behaviour that undermines this aim is
unacceptable.
Social continued
INDUSTRY INITIATIVES
During the year we supported a number of industry initiatives including our sponsorship of the NFU Cymru Wynnstay Sustainable Agriculture
Award, Harper Adams University Beef Award, NFU Cymru Poultry Conference, YFC Wales and the Nuffield Farming Scholarships Trust. We
also actively support industry campaigns such as Farm24, Back British Farming Day and Farm Safety Week. Our involvement in these initiatives
supports the agricultural industry, in particular the next generation, which is an important tool for us to engage with future customers and potential
colleagues.
Some of the industry initiatives and campaigns we have supported
NFU Cymru Wynnstay Sustainable Agriculture Award
Harper Adams University Beef Award
NFU Cymru Poultry Conference
YFC Wales
Nuffield Farming Scholarships Trust
Farm24
Back British Farming Day
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ANNUAL REPORT AND ACCOUNTS 2022 Social continued
COMMUNITIES
Making a positive difference to the communities in which we operate
is important to the Group. Over the course of the year, we supported
over 230 individual events or causes in the communities in which we
operate, this includes local agricultural shows, charitable initiatives,
community groups and educational settings. We directly donated
£4,355 to charitable causes during the year and £24,417 to initiatives
within the agricultural community and within the local communities.
CUSTOMER ENGAGEMENT
During the year we hosted our own specialist events, namely The
Arable Event and The Wynnstay Sheep & Beef Event, where we invited
our customers to browse tradestands, view demonstrations and
listen to keynote speakers from the agricultural industry. Our flagship
events alongside various other localised store open days, webinars
and workshops provide the opportunity to regularly engage with our
customers.
HEALTH, SAFETY & WELFARE
The health and safety of our colleagues and customers continues to be
our paramount priority. During the year there were five RIDDORS which
compared to four in the previous year. We ensure high levels of health
and safety compliance and awareness through:
Health and Safety Bulletins for colleagues
• Programme of site audits
• Dedicated Health and Safety Group for the business
• Continuous review of role design, working practices including
opportunities for remote working for eligible roles, policies and
risk assessments
• Culture of continuous improvement
• Independent professional occupational health and welfare
support options including mental health and financial advice
for colleagues and their families
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Corporate Governance Statement
For the year ended 31 October 2022
On behalf of the Board, I am pleased to present our Corporate Governance Statement for the year ending 31 October 2022.
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 5-6 and
the developments in the business are explained in the Chief Executive Review on page 19-24. The Board’s major decisions during the year are
highlighted within our S172 statement on page 34-35.
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 34-35.
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 Strategic Report. During the year, the Group’s Environmental and Sustainability Manager launched a number of important
initiatives including a renewable energy investment strategy and the establishment of a Sustainable Farming Advisory (“SFA”) team. 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, who operates an “open door” policy.
Principle 4: The Board’s risk appetite is explained within the Principal Risk and Uncertainties on page 31-33, 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 Committee would then make
any appropriate control improvement recommendations to the Board for implementation. 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.
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ANNUAL REPORT AND ACCOUNTS 2022 Corporate Governance Statement continued
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. Continuity is an important element in the effective functionality of the Board, but equally
succession planning is critical to the business to ensure smooth transition of Board composition changes to uphold the independence
requirements of the Code. I was appointed Chairman in 2021 having had five years experience with the business, and following a comprehensive
search process Catherine Bradshaw was appointed as a non-executive later that year. We are now planning the next phase of our Board
evolution and hope to be in a position to announce changes in 2023 ensuring a good balance of experience and fresh thinking is maintained.
The roles of Chairman and Chief Executive on the Board are separate, and the Chairman is elected by the whole Board on an annual basis. All
Directors retire by rotation on a two or three year cycle, and where eligible are able to offer themselves for re-election at the appropriate AGM.
All Board members are able to take independent professional advice on matters associated with the Company at the Company’s expense. I
am happy to 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.
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Details of membership and key
skills are on pages 53-54
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
ent Stakehold e r
agement
g
n
E
d
n
e
p
e
d
n
I
Senior
Independent
NED
O
p
e
r
a
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g
Chief
Executive
P
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a
n
c
e
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 2022 Wynnstay Group Plc
Corporate Governance Statement continued
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, 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. During the year, our
Company Secretary, Claire Williams, has been absent from work while she recuperates from a serious car accident, with the role being covered
by Paul Roberts in an “acting” capacity. A table of meetings and attendances during the financial year is given below:
Board
Main
Board
Additional
Audit Committee
Remuneration
Committee
Nominations
Committee
Number of Meetings
Steve Ellwood
Philip Kirkham
Howell Richards
Catherine Bradshaw
Gareth Davies
Paul Roberts
12
12
12
12
12
12
11
7
7
5
5
6
7
7
3
n/a
3
1
3
n/a
n/a
3
n/a
3
2
3
n/a
n/a
2
2
2
n/a
n/a
2
n/a
Principle 6: Biographical details of the Directors and their skills are included on pages 53-54. 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 is Audit Committee Chair and has considerable and relevant financial oversight and reporting experience in her executive role
as Director of Group Reporting and Control at Cranswick 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: As Chairman I am responsible for the periodic performance reviews of the Board, its sub-committees and non-executive directors.
Stakeholder feedback is sought and acted upon where necessary and myself and our Senior Non-Executive, Philip Kirkham, routinely make
ourselves available to meet shareholders. An appraisal of the performance of the Board and each Executive Director has been undertaken at the
year-end in the form of individual interviews with each Director 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 were of adequate results in each category with the improvements noted in the previous year being
maintained. During these discussions, any concerns over technical knowledge or sector understanding necessary to fulfil their role as a director of
the Company were considered with additional support arranged as necessary. Continuing professional development support was provided to the
Board during the year by specialist presentations from expert agricultural sector consultants.
The Board approves annual objectives for the Executive Directors and measures performance against these objectives when deciding whether to
award a performance related bonuses, details of which are reported in the Director’s Remuneration Report.
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Corporate Governance Statement continued
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 page 35. The Board are pleased with the financial
performance of the Group during the year, which has presented many
financial and commercial challenges. The performance demonstrates
the resilience of our focused “farmer first” 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 59-64, and as we seek to continuously improve the level of
information disclosure, a separate Audit Committee report has been
prepared this year on page 49-51. In our Directors’ Report last year
we noted that the Board had decided that it was appropriate to carry
out a competitive tender for the Group’s audit which resulted in the
appointment of RSM UK Audit LLP, and the Board consider that such a
periodic rotation of auditors is a matter of confidence for stakeholders
in the business.
Steve Ellwood
Chairman
31 January 2023
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Principle 8: The Group promotes its Wynnstay THRIVE corporate
values culture which is described on page 39-40. 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. The Board have appointed an Environmental and
Sustainability Manager to lead the implementation of our environmental
strategy and further details of initiatives from this plan is provided in our
ESG Framework report on page 36-44.
Principle 9: The Board is supported by Shore Capital and Corporate
Limited who act as Nominated Advisor and are consulted on matters
when appropriate so that the Board can take their advice into account
on relevant decision making requirements. Close relationships are
maintained with the Group’s corporate law advisors, DWF Law LLP.
The Board is responsible for the development and oversight of strategy,
with implementation of that strategy and day to day management of the
business delegated to the Executive Directors and Senior Management
team. Each trading entity has its own divisional executive board, on
which the two Executive Directors sit, and this structure ensures timely
and effective decision making is made and implemented and that there
is a direct link back to the Group Board. Senior Management from
across the Group are routinely invited to attend Board meetings for
relevant discussions.
The Board is supported by three sub-committees, membership of
which is shown on pages 53-54.
• 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.
• Remuneration
The committee meets to consider remuneration policy for executive
directors and senior managers and the supervision of employee benefit
structures throughout the Group.
• Nominations
Meets as required to consider senior appointments.
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.
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 48
Audit Committee Report
I am pleased to present the Audit Committee report for the year ended 31 October 2022, on behalf of the Board.
The Audit Committee provides effective oversight and governance over the financial integrity of the Group’s financial reporting to ensure that the
interests of the Company’s shareholders are protected at all times. It assesses the quality of the external audit processes and ensures that the
risks which our businesses face are being effectively managed.
A significant area of focus of the Committee this year has been on the Group’s internal control environment. Progress has been made this year
in strengthening the control environment and culture of the Group but improvements still need to continue and this will be a key focus in 2023.
In particular, the Committee during 2022 has worked to ensure that:
•
•
•
•
•
•
Controls in areas of particular weakness have been significantly strengthened.
Harmonisation of hedge accounting adoption where applicable and relevant within the Group.
Robust process is in place around acquisition purchase price allocations and intangible valuation approaches.
Investment in talent was made within the business to enable adequate focus to be placed on processes and controls.
The approach to audit planning has been revised and audits are getting aligned to risks identified on the Group risk register.
A tracking tool and reviews have been introduced to ensure that actions to address control weaknesses are completed.
Priorities for the Committee in 2023 will initially focus on system improvements. Priorities will also include further standardisation of financial
reporting system processes of the business, the provision of improved guidance around the reporting of accounting judgements and the
extension of controls improvement into smaller operating units.
Although going concern is a matter for the whole Board (see page 29), a review is made by the Audit Committee of the Group’s headroom under
its covenants and undrawn facilities in relation to the Group’s financial forecasts and sensitivity analyses.
Following the appointment of RSM UK Audit LLP as external auditor in July 2021 the Committee reported to the Board that they were satisfied
with the initial work and recommended their reappointment for the year under review in this annual report.
Purpose and aim
The purpose of the Committee is to make recommendations on the reporting, control, risk management and compliance aspects of the Directors’
and Group’s responsibilities, providing independent monitoring, guidance and challenge to executive management in these areas.
Through this process the Committee’s aim is to ensure high standards of corporate and regulatory reporting, an appropriate control environment,
a robust risk management framework and effective compliance monitoring. The Committee believes that excellence in these areas enhances the
effectiveness and reduces the risks of the business.
Key responsibilities
• The accounting principles, practices and policies applied in and the integrity of the Group’s Financial Statements.
• The adequacy and effectiveness of the internal control environment.
• The effectiveness of whistleblowing procedures.
• The effectiveness of the Group’s finance function.
• The appointment, independence, effectiveness and remuneration of the Group’s external auditor, including the policy on non-audit services.
• The supervision of any tender process for the Group’s external auditor.
• External financial reporting and associated announcements.
• The Group’s risk management processes and performance.
.
Audit Committee membership
As at 31 October 2022, the Committee comprised of:
Chair of the Committee
Members
Non-Executive Director
Ms C Bradshaw
Mr P.M. Kirkham
Mr H.J. Richards
<
<
The Board considers that each member of the Committee was throughout the year, and remains, independent within the terms of the QCA
Corporate Governance Code for Small and Mid-size companies (“the Code”). The knowledge and experience of the Committee members’
means that the Committee as a whole is competent in the sector in which the Company operates. The Company Secretary also attends each
Committee meeting and when appropriate the Finance Director is invited to attend the Committee’s meetings.
Audit Committee structure
The Committee operates under terms of reference which are reviewed annually by the Committee and changes are recommended to the Board
for approval.
The Committee has in its terms of reference the power to engage outside advisors and to obtain its own independent external advice at the
Company’s expense, should it be deemed necessary.
The Chairman of the Committee reports to the subsequent meeting of the Board on the key issues covered by the Committee, identifying any
matters on which it considers that action or improvement is needed and makes recommendations on the steps to be taken.
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ANNUAL REPORT AND ACCOUNTS 2022 Audit Committee Report continued
Meetings
The Committee meets regularly throughout the year, and four meetings relevant to the year under review were held along with the audit close
meeting in early 2023. Its agenda is linked to events in the Company’s financial calendar.
The Committee addressed the following key agenda items during its four meetings in the financial period:
24-Sep-21
●
●
●
Review of 2021 acquisition
and intangibles recognised
Review of the 2021
external auditor’s year end
audit plan
Group internal controls
review
●
Internal controls update
20-Jan-22
Review of 2021 going
concern basis of
accounting and viability
statement
2021 Goodwill and
intangible assets
impairment review
2021 Review of Audit
Committee report
Update on risk
management
Review of 2021 audit
process and results
Review of the 2021
external auditor report
Review of the 2021 Annual
Report and preliminary
results announcement
●
●
●
●
●
●
●
12-Jul-22
16-Sep-22
●
●
●
●
Review Audit Committee
report
Review of Finance Change
management
Risk management and
internal control review
Review of 2022 interim
results and preliminary
results announcement
●
●
●
Review of in year
acquisition and intangibles
recognised
Review of the external
auditor’s year end audit
plan
Group internal controls
review
● Risk register update
All members of the Committee attended all meetings with the exception of Mr H.J. Richards for the July 2022 and September 2022 meetings.
The Committee Chair regularly invites senior company executives to attend meetings of the Committee to discuss or present specific items and
the Finance Director, Mr B.P. Roberts, attended all four of the meetings. The external auditor also attended two meetings of the Committee and
has direct access to the Committee Chair. The Committee also meets with the external auditor without the Executive Directors being present. The
Committee Chairman also meets with the external auditor in advance of Committee meetings. During the year, the Committee held no additional
unscheduled meetings.
Financial reporting and significant accounting matters
The Committee considered the following financial reporting and key accounting issues with regard to the 2022 Financial Statements:
Carrying value of goodwill and intangible assets*
The carrying value of goodwill and intangible assets is systematically reviewed prior to year end. A consistent methodology is applied to the
individual cash generating units, taking account of market outlook, risk-adjusted discounted future cash flows, sensitivities, and other factors
which may have a bearing on impairment considerations. Specific focus has been given to Humphreys as a recent acquisition involving purchase
price allocation. The Committee considered the appropriateness of the assumptions including discount and growth rates.
* Items marked as such are areas where judgement is involved in arriving at the accounting conclusion.
Fair Value of Investment Property*
During the year the group instructed independent RICS qualified surveyors to assess the market value of the property resulting in a fair value
loss impairment based on an assessment that the likely market rent on any lease renewals would be lower than the current passing rent. The
Committee considered and accepted the conclusion that a charge should be taken to reduce the carrying value of the investment property.
Derivatives
Hedge accounting rules were reviewed to establish if it could be applied to other operating companies within the Group where derivatives are
used, including, taking due consideration of the commercial dynamics of the operations. The Committee concluded it was not possible to apply
hedge accounting rules to companies other than Glasson Grain Limited, where cash flow hedges are used.
Control improvements
Regular reports on internal control issues are presented to and discussed at the Audit Committee and a follow up process in place to assess
improvement recommendations. Ongoing progress on the internal control process has continued during the year. The Group’s external auditor
communicated, as part of their audit of the Financial Statements several improvement points. The Board, in reviewing key control observations,
can confirm that actions are being undertaken to remedy the weaknesses identified. This programme is aimed at reinforcing balance sheet
ownership and control to ensure the completeness and accuracy of reconciliations. During 2023, further work will be undertaken to implement
better system controls and processes in this area, establish enhanced levels of review and provide additional training where required. These
changes will be supported by the senior finance team to ensure improved awareness and greater accountability.
Going concern and longer-term viability
The Committee reviewed the Group’s cash flow, net debt and leverage forecasts and note that there is sufficient headroom projected against
the Group’s financial covenants throughout the viability period (ie 3 years). The assessment has placed additional focus on the covenant test
points (with particular reference to the working capital seasonality of the business which would ordinarily see leverage rise in second quarter. The
Committee has also reviewed the Group’s potential mitigating actions to reduce leverage in the short term and consider these to be achievable
and commercially viable. The Committee is satisfied that the assumptions taken are appropriate.
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Fair, balanced and understandable
The Committee has reviewed the contents of this year’s Annual Report
and Accounts and advised the Board that, in its view, the Annual Report
and Accounts, taken as a whole, is fair, balanced and understandable
and provides the necessary information to enable shareholders to
assess the position and performance, strategy and business model
of the Company.
In reaching this conclusion the Committee has considered the
following:
•
•
•
•
The preparation of the Annual Report is a collaborative process
between Finance,, Human Resources and Communications
functions within Wynnstay, ensuring the appropriate professional
input to each section. External guidance and advice is sought
where appropriate.
The coordination and project management is undertaken by a
central team to ensure consistency and completeness of the
document.
An extensive review process is undertaken, both internally and
through the use of external advisors.
A final draft is reviewed by the Audit Committee members prior to
consideration by the Board.
On behalf of the Board
Catherine Bradshaw
Chair of the Audit Committee
31 January 2023
Audit Committee Report continued
Corporate culture
The Committee considered measures undertaken to transform
the culture of the business in the year. The Committee noted two
changes in particular: firstly, significant strengthening of the technical
leadership team; and secondly, through careful management, greater
standardisation and embracing better ways of working. The Committee
is reassured by the positive changes that have been made to date but
is also mindful that transformational change will inevitably take time to
embed.
Oversight of external auditor
The Board is aware of the need to maintain an appropriate degree
of independence and objectivity on the part of the Group’s external
auditor. The external auditor reports to the Committee on the actions
taken to comply with both professional and regulatory requirements
and with best practice designed to ensure its independence.
The Group has an agreed policy regarding the provision of audit
and non-audit services by the external auditor, which was operated
throughout the period. The policy is based on the principles that
they should undertake non-audit services only where they are the
most appropriate and cost-effective provider of the service and
where the provision of non-audit services does not impair, or is
not perceived to impair, the external auditor’s independence and
objectivity. It categorises such services as auditor-permitted services,
auditor-excluded services and auditor-authorised services. The fees
permissible for non-audit services should not exceed the average audit
fees paid to the Group’s external auditor in the last two consecutive
financial years. The policy, which was reviewed at the September 2022
meeting defines the types of services falling under each category and
sets out the criteria to be met and the internal approvals required prior
to the commencement of any auditor-authorised services. In all cases,
any instruction must be pre-approved by the Finance Director and
the Audit Committee before the external auditors are engaged. The
external auditor cannot be engaged to perform any assignment where
the output is then subject to their review as external auditor.
The Committee regularly reviews an analysis of all services provided
by the external auditor. The policy and the external auditor’s fees are
reviewed and set annually by the Committee and are approved by the
Board.
The total fees payable by the Group to its external auditor for non-
audit services in the period were £nil. The total fees payable to them
for audit services in respect of the same period were £175,000 (2021:
£119,000).
A full breakdown of external auditor fees are disclosed in Note 6 to the
Financial Statements on page 81.
The external auditor reports to the Committee each year on the actions
taken to comply with professional and regulatory requirements and
best practice designed to ensure its independence, including the
rotation of key members of the external audit team. RSM UK Audit
LLP has formally confirmed its independence to the Board in respect
of the period covered by these Financial Statements.
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ANNUAL REPORT AND ACCOUNTS 2022
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 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
31 January 2023
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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 are required by the AIM Rules of the
London Stock Exchange to prepare the group financial statements in
accordance with UK-adopted International Accounting Standards and
have elected under company law to prepare the company financial
statements in accordance with UK-adopted International Accounting
Standards and applicable law.
The group and company financial statements are required by law
and UK-adopted International Accounting Standards 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 UK-
adopted International Accounting Standards;
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.
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 52
Board of Directors and Company Secretary
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.
Catherine Bradshaw
Independent Non-Executive Director
Stephen Ellwood
Chairman
Gareth Wynn Davies
Chief Executive Officer
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,
Greencore Plc, and currently as Director
of Reporting and Controls at Cranswick
Plc.
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 NIAB and is a Non-
Executive Director at Velcourt Group.
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 and Director of
AIC (Agricultural Industries Confederation)
AC
RC
NC
KEY SKILLS
AC
RC
KEY SKILLS
RC
NC
KEY SKILLS
NC
KEY SKILLS
Sector experience
Strategy and leadership
Sector experience
Sector experience
Strategy and leadership
Mergers and acquisitions
Strategy and leadership
Sales and marketing
£
Finance
Mergers and acquisitions
53
ANNUAL REPORT AND ACCOUNTS 2022 Bryan Paul Roberts
Finance Director
Howell John Richards
Independent Non-Executive Director
Claire Alexander Williams
Company Secretary
COMMITTEE MEMBERSHIP
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.
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.
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
AC
RC
KEY SKILLS
KEY SKILLS
Sector experience
Sector experience
Company secretarial
Company secretarial
Strategy and leadership
£
Finance
AC Audit Committee
NC Nominations Committee
RC
Remuneration Committee
Committee Chair
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
54
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
Operations
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
55
ANNUAL REPORT AND ACCOUNTS 2022
Senior Management continued
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.
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KEY SKILLS
Sector experience
Strategy and leadership
Sales and marketing
Neil Richardson
Managing Director, Humphrey Feeds & Pullets
Neil joined the Group in March 2023 when Wynnstay acquired Humphrey Feeds & Pullets Ltd. Neil
brings to the team a wealth of experience within the feed sector, along with a passion for delivering
continuous improvement, and excellent customer service.
KEY SKILLS
Operations and supply chain
Strategy and leadership
Compliance
Sector experience
56
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Directors’ Report
For the year ended 31 October 2022
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 2022.
RESULTS AND DIVIDENDS
Interim dividend per share paid
Final dividend per share proposed
Total dividend
Group revenue
Group profit after tax
2022
5.40p
11.60p
17.00p
2022
£000
713,034
17,142
2021
5.00p
10.50p
15.50p
2021
£000
500,386
8,934
Subject to approval at the Annual General meeting, the final dividend
will be paid on 28 April 2023 to shareholders on the register at the
close of business on 31 March 2023. The share price will be marked
ex dividend with effect 30 March 2023. 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 28
April 2023.
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 2022 had the following interests in the ordinary shares of the Company:
Gareth Davies
Steve Ellwood
Philip Kirkham
Catherine Bradshaw
Howell Richards
Paul Roberts
25p Ordinary Shares
SAYE Options
Discretionary Options
2022
40,113
4,700
11,203
-
2,810
98,998
2021
32,761
4,700
11,137
-
2,810
98,998
2022
1,309
-
-
-
-
2021
7,795
-
-
-
-
2022
45,715
2021
45,715
-
-
-
-
-
-
-
-
5,236
6,857
36,574
36,574
Further information on the Directors’ discretionary options, including the performance criteria, can be found in the Directors’ Remuneration
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 (2021: 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, Paul Roberts and Howell Richards retire from the Board by rotation at the Annual General Meeting on 21 March 2023 and being
eligible, offer themselves 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 2022, 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
11.4
Rock Nominees Limited
Discretionary managed funds of Charles Stanley & Co
Luna Nominees Limited
Discretionary managed funds of Cazanove Capital
Rulegale Nominees Limited
Discretionary managed funds of James Sharp & Co
2,218,499
889,350
670,436
9.9
4.0
3.0
The Directors are not aware that any other person, Company or Group of Companies held 3% or more of the issued share capital of the
Company, and no new notifications of substantial shareholdings have been received between 31 October 2022 and the date of this report.
57
ANNUAL REPORT AND ACCOUNTS 2022 Directors’ Report continued
SHAREHOLDER RESOLUTIONS
At the Annual General Meeting held on the 22 March 2022 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 Directors may allot in the period up to the next Annual General Meeting to be held on 21 March 2023 is limited to
£450,000. This authority will expire on 20 March 2023, 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 20 March 2023, 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 20 March 2023, 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, which include, bi-monthly newsletters,
annual roadshows, financial results presentations and an active
colleague forum.
The Group continues to encourage employee involvement in the
Group by operating a Savings Related Share Option Scheme open to
all employees.
The Group provides training and support for all employees where
appropriate and gives a full and fair consideration to disabled applicants
in respect of duties which may be effectively performed by a disabled
person. Where existing employees become disabled, the Group will
seek to continue employing them, bearing in mind their disability and
provided suitable duties are available. Failing this, all attempts will be
made to provide a continuing income.
Health and Safety matters are a high priority issue for the Board, who
consider a monthly report on developments and any incidents that
may have occurred, including accidents and near misses.
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 formal 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 54 days (2021: 56 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.
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 2022 as provided in note 16 to the financial statements by
approximately £9,578,000 (2021: £6,460,000). The director’s opinion
is supported by a valuation exercise carried out by BNP Paribas Real
Estate in July 2022.
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POLITICAL AND CHARITABLE DONATIONS
Details of support to the community is given in ESG report. There were
no political donations during the year (2021: none).
EVENTS AFTER THE PERIOD END
Details of the acquisition of Tamar Milling Limited on 17 November
2022 are provided in Note 36 of the financial statements.
CORPORATE GOVERNANCE
The Corporate governance report on pages 45-48 forms part of the
Directors’ Report and is incorporated by cross reference.
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 53-54.
Having made enquires of fellow Directors each of these Directors, at
the date of this report, confirms that:
•
to the best of each Director’s knowledge and belief, there is no
relevant audit information of which the Group’s auditor is unaware;
and
• each Director has taken all the steps a director might reasonably
be expected to have taken to be aware of relevant audit
information and to establish that the Group’s auditor is aware of
that information.
This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
INDEPENDENT AUDITORS
RSM UK Audit LLP 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. It has done so in respect of strategy and future
developments and principal risks and uncertainties, and carbon and
energy reporting.
By order of the Board
Paul Roberts
Acting Company Secretary
31 January 2023
58
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
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
For the year ended 31 October 2022
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 2022.
General approach to remuneration
The Committee’s approach to remuneration is to provide a competitive
but not excessive reward package for Executive Directors that aligns
their pay with the strategy of the Group, encouraging, incentivising and
motivating behaviours which we believe will deliver long-term success for
the Group. The interests of Executive Directors should align with those
of shareholders, and our Policy seeks to adopt practices to achieve
this while complying 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:
i.
ii.
iii.
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 carried out a benchmarking pay
review exercise in relation to the Executive Directors with adjustments
to basic pay implemented with effect from November 2021. A review
of Non-Executive Director’s fees was carried out towards the end
of the financial year with adjustments implemented with effect from
November 2022. The details of these individual changes are provided
later in this report within the respective remuneration sections.
The Committee have been conscious of the general inflationary
pressures evident in the wider economy and been particularly
concerned about the cost-of-living challenges faced by colleagues
across the business. In considering the budgeted pay review proposal
for the year commencing November 2022, the Committee were keen
to support colleagues and were pleased to announce the payment of
a one-off Income Supplement payment of £750 per person paid in
October 2022. Taking this in addition to a five per cent general increase
for the new financial year, the Committee believed that this represented
a sound targeted use of available resources offering the most support
to our lower paid colleagues.
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.
59
ANNUAL REPORT AND ACCOUNTS 2022 Directors’ Remuneration Report continued
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.
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.
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.
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Directors’ Remuneration Report continued
Travelling Expenses
Purpose: To reimburse legitimately incurred costs of attending
necessary Board and associated meetings.
Operation: Pre-set rates used
travel,
accommodation and other incurred expenses in line with those used
for other employees.
to reimburse mileage,
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.
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.
61
ANNUAL REPORT AND ACCOUNTS 2022 Directors’ Remuneration Report continued
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 2022, 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
Column A
Column B
Current Basic
Previous Basic
Salary
Salary
£000
278
186
£000
265
177
Column C
Actual Salary
as a Director
Nov 2021 – Oct 2022
£000
265
177
Annual Performance Bonuses and Profit Related Pay. The bonus payments made to executive directors in March 2022, and therefore
during the financial year under review, were in relation to the performance of the business for the financial year 2020/21. These payments were
made under the auspices of the 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 years ending October 2021 and October 2020, received in the following March, are shown in
the table below in columns A & B respectively.
The Executive Directors also participate in the Wynnstay Profit Related Pay Scheme, (“PRP”) which is a scheme for employees of Wynnstay
Group plc and Grainlink Limited, and which pays an annual bonus based on a formula which produces a percentile result which is then applied
to the relevant individual’s prior year earnings. The formula calculation is the aggregate of the pre-tax profit of Wynnstay (Agricultural Supplies)
Limited and Grainlink Limited divided by the aggregate of the combined revenues. 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 2021, paid in February 2022,
was 3.1% (2021: 2.7%), with the actual PRP paid to each individual executive shown in Column C below. The anticipated rate for 2022, to be
paid in February 2023 relating to the last financial year is 2.7% of relevant earnings.
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Bonuses £000
Executive Director
G W Davies
B P Roberts
Column A
Total 2021
206
158
Column B
Total 2020
103
77
Column C
Feb 22
10
8
PRP received
Feb 21
6
4
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Directors’ Remuneration Report continued
Pension and death in service life cover. Individual Company contributions to personal pension plans are based on the value of the Executive
Directors basic salary only. The annual 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 both of the
executive directors belong, had a total renewal cost at November 2021 of £108,575 (2020: £85,707), and there were 583 (2020: 599) members
covered, equating to an average cost of £186 per person (2020: £143).
Pension
Executive Director
G W Davies
B P Roberts
Column A
Pension %
11.2%
11.2%
Column B
Pension Contribution
£000
28
20
Benefits in kind. G W Davies was supplied with a company car during the financial year, primarily for the furtherance of his duties. However,
this vehicle was available for the executive’s private use and as such has a taxable benefit in kind value calculated in accordance with HMRC
rules. The value for the tax year ending April 2022 is shown in the table below in column A. The cost of fuel used for private motoring is refunded
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 2022 is shown below in column B. 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 2022 which is shown in Column C above.
Benefits in kind
Executive Director
G W Davies
B P Roberts
Column A
Column B
Column C
Company Car Value Private Medical Cover Cash Settled Car Allowance
£9,577
N/A
£1,152
£649
N/A
£7,200
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. No grants of options under this arrangement were made in the financial year
ending October 2022 with the last grant having been made in April 2021, details of which are shown in the option table below. which shows all
outstanding options open at the year end.
The performance criteria of the relevant options are tested at the end of the third financial year after the respective grant as follows :
-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 attached to the current PSP options are 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 2022 for directors who had served during the year.
Share Option Table
Executive Director
G W Davies
B P Roberts
PSP Scheme Maximum Award
SAYE
No. of Options Granted Jan 20 No. of Options Granted Apr 21 No. of Options
27,896
22,318
17,819
14,256
1,309
5,236
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/
Other Share Schemes. 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 2022 are shown in the table above which do not have
any performance criteria attached to them and are exercisable between September 2023 and February 2024, with further details provided in the
Director’s Report on pages 57-58 and in Note 9 to the accounts. During the year G W Davies exercised 6,486 SAYE options at a price of £3.70
each. Using the market price on the day of exercise, a gain of £15,631 was generated although Mr Davies retained the shares.
63
ANNUAL REPORT AND ACCOUNTS 2022 Directors’ Remuneration Report continued
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
Received Financial Year ending Oct 2022
S J Ellwood – Chairman
P M Kirkham
H J Richards
C Bradshaw
S J Ellwood – Chairman
P M Kirkham
H J Richards
C Bradshaw
Basic Fee
Supplemental Fee Benefits in kind
Travelling Expenses
£000
£000
£000
£000
71
40
40
40
0
1
0
2
0
1
1
0
1
1
1
1
Payable Financial Year ending Oct 2023
Basic Fee
Supplemental Fee Benefits in kind
Travelling Expenses
£000
£000
£000
£000
75
42
42
42
0
2
0
2
0
1
1
0
1
1
1
1
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Vice-Chairman and Chairman of Remuneration Committee
31 January 2023
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ANNUAL REPORT AND ACCOUNTS 2022 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 2022 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 UK-adopted
International Accounting Standards 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 2022
and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in
accordance with UK-adopted International Accounting Standards;
the parent company financial statements have been properly prepared
in accordance with UK-adopted International Accounting Standards
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.
BUSINESS COMBINATION
Key audit matter description
The relevant related disclosures are given in note 35 of the financial
statements.The relevant related disclosures are given in note 35 of the
financial statements.
A business combination was undertaken in the period with the acquisition
of Humphreys Poultry Holdings Limited
Judgement is applied by management in estimating the fair value of the
consideration transferred, and the assets and liabilities acquired, in the
business combination. The consideration transferred included contingent
consideration of £2.0m and significant fair value adjustments were made
in respect of a freehold property (valued at £1.83m) and to recognise
intangible assets; Brand (£3.76m) and Key and other customer accounts
(£1.1m).
Due to the level of estimation uncertainty, we determined this to be a key
audit matter.
How the matter was addressed in the audit
Our audit procedures included:
• Confirming that the acquisition met the definition of a business
combination in accordance with IFRS3 Business combinations;
• Reviewing management’s accounting paper, and the relevant aspects
of the SPA, to verify
• the nature and amount of the Purchase price, and
• that the Purchase price met the definition of consideration, in
accordance with IFRS 3;
• Challenging the assumptions underpinning the estimation of the
contingent consideration;
• Utilising a property valuation expert to review the valuation of the
freehold property;
• Utilising a valuation expert to review
• the valuation methodology applied by management,
• the models used to value the intangible assets, and
• the discount rates used in the models;
SUMMARY OF OUR AUDIT APPROACH
• Challenging the inputs and assumptions underlying the methodology
and models;
• Challenging the judgements made by management in respect of the
useful life attributed to each intangible asset; and
• Considering whether the disclosures in the financial statements
provide sufficient understanding of the business combination and are
in accordance with IFRS 3
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:
Key audit matters Group
•
Business combination
Prarent Company
•
None
Materiality
Group
•
Overall materiality: £820,000 (2021:
£549,000)
Performance materiality: £615,000 (2021:
£412,000)
Prarent Company
•
Overall materiality: £1,410,000 (2021:
£108,800)
Performance materiality: £1,050,000
(2021: £81,600)
•
•
Scope
Our audit procedures covered 98% of revenue,
96% of total assets and 88% of profit before
tax.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the group financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the group
financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
65
ANNUAL REPORT AND ACCOUNTS 2022 Independent auditor’s report to the members of Wynnstay Group Plc continued
Overall materiality
£820,000 (2021: £549,000)
£1,410,000 (2021: £108,800)
Basis for determining overall materiality
5% of average adjusted profit before tax
over a 2-year period.
1.7% of total assets.
Group
Parent Company
Rationale for benchmark applied
Profit before tax is considered to be the
key benchmark of the group. This has
been adjusted for non-recurring items .
A 2-year average has been applied given
the impact of current year inflation in the
industry and consequential volatility.
Total assets is considered to be
the key benchmark of the parent
company as the entity relies on its
primarily asset of investments as a
non-revenue generating entity.
Performance materiality
£615,000 (2021: £412,000)
£1,050,000 (2021: £81,600)
Basis for determining performance materiality
75% of overall materiality
75% of overall materiality
Reporting of misstatements to the Audit Committee
Misstatements in excess of £41,000 and
misstatements below that threshold that, in
our view, warranted reporting on qualitative
grounds.
Misstatements in excess of
£70,500 and misstatements below
that threshold that, in our view,
warranted reporting on qualitative
grounds.
Overall and performance materiality, in respect of the parent company, was significantly lower in the prior year. This was due to it being designated as a
significant component for the group audit, requiring the application of a component materiality.
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
3
2
5
95%
4%
99%
89%
4
93%
95%
-
95%
The specific audit procedures on revenue were limited to testing the
identified fraud risk of cut-off in relation to one component. In addition,
specific audit procedures were also performed on another component
in order to obtain sufficient and appropriate coverage over the group’s
property, plant and equipment, investment property and borrowings.
Analytical procedures at group level were performed for the remaining 8
components. None of the full scope audits were undertaken by component
auditors.
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:
• A review of the groups 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;
• 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 groups finance needs;
• 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.
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
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Independent auditor’s report to the members of Wynnstay Group Plc continued
•
the parent company financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out
on page 52, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
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.
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
ISAs limit the required audit procedures to identify non-compliance with these laws and regulations to
inquiry of management and where appropriate, those charged with governance (as noted above) and
inspection of legal and regulatory correspondence, if any.
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
Testing a sample of revenue transactions either side of the balance sheet date to determine whether the
transaction has been appropriately recognised in the correct accounting period.
Management override of
controls
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
31 January 2023
67
ANNUAL REPORT AND ACCOUNTS 2022
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2022
2022
2021
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 (expense) / 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
- recycle cashflow hedge to income statement
Other comprehensive (expense) / 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
18
7
10
12
12
166
(656)
808
(132)
713,034
(622,228)
90,806
(59,386)
(9,307)
335
22,448
(416)
(1,094)
20,938
(490)
676
21,124
(3,982)
17,142
(2,462)
2,336
(126)
17,016
82.72p
80.65p
193
(383)
677
(105)
The notes on pages 73-109 form part of these financial statements.
1Adjusted results are after adding back amortisation of acquired intangible assets, goodwill impairment, share-based payment expense and non-recurring items.
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
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Consolidated and Company Balance Sheet
For the year ended 31 October 2022
Registered Number 2704051
ASSETS
NON-CURRENT ASSETS
Goodwill
Intangible assets
Investment property
Property, plant and equipment
Right-of-use assets
Investment in subsidiaries
Investments accounted for using equity method
Derivative financial instruments
CURRENT ASSETS
Inventories
Trade and other receivables
Amounts owed by subsidiary undertakings
Loans to joint venture
Cash and cash equivalents
Derivative financial instruments
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
Group
2022
£000
Note
13
14
15
16
16
17
17
25
19
20
20
18
23
25
23
24
25
21
21
22
23
24
21
25
26
27
16,133
4,936
1,850
20,840
8,202
-
4,101
1
56,063
71,095
96,575
-
1,067
31,177
598
200,512
256,575
(3,043)
(3,344)
(53)
(105,015)
-
(1,639)
(345)
(113,439)
87,073
(6,640)
(3,999)
(36)
(80)
(1,680)
(12,435)
(125,874)
130,701
5,585
42,130
4,267
78,719
130,701
2021
£000
14,322
236
2,372
16,746
11,043
-
3,433
5
48,157
50,550
72,511
-
3,319
19,641
320
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
Company
2022
£000
-
-
1,850
9,333
-
55,108
191
-
66,482
-
111
13,023
1,067
5
-
14,206
80,688
(3,043)
-
-
(2,722)
(59)
-
-
(5,824)
8,382
(6,640)
-
-
-
-
(6,640)
(12,464)
68,224
5,585
42,130
3,961
16,548
68,224
2021
£000
-
-
2,372
8,919
-
41,961
191
-
53,443
-
-
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
Steve Ellwood – Director
Paul Roberts - Director
The Company generated profit after tax of £3,415,000 (2021: profit of £3,670,000). The financial statements were approved by the Board of Directors on 31 January 2023 and
signed on its behalf. The notes on pages 73-109 form part of these financial statements.
69
ANNUAL REPORT AND ACCOUNTS 2022 Consolidated Statement of Changes in Equity
As at 31 October 2022
Group
At 31 October 2020
Share
capital
£000
5,013
Share
premium
account
£000
30,637
Other
reserves
£000
3,525
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
-
-
-
62
-
-
62
-
-
-
963
-
-
963
-
-
-
-
-
343
343
At 31 October 2021
5,075
31,600
3,868
Profit for the year
Net change in the fair value of cashflow hedges
taken to equity, net of tax
Recycle cashflow hedge to Income Statement
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
-
-
-
-
-
-
-
-
510
10,530
-
-
-
-
510
10,530
-
-
-
-
-
-
262
262
Cash Flow
Hedge
Reserve
£000
-
-
263
263
-
-
-
-
263
-
(2,462)
2,336
(126)
Retained
earnings
Total
£000
£000
59,003
98,178
8,934
-
8,934
8,934
263
9,197
-
(3,021)
-
1,025
(3,021)
343
(3,021)
(1,653)
64,916
105,722
17,142
17,142
-
-
(2,462)
2,336
17,142
17,016
-
-
-
-
-
(3,339)
-
11,040
(3,339)
262
(3,339)
7,963
At 31 October 2022
5,585
42,130
4,130
137
78,719
130,701
All amounts are derived from continuing operations.
The notes on pages 73-109 form part of these financial statements.
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Company Statement of Changes in Equity
As at 31 October 2022
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
5,013
Share
premium
account
£000
30,637
Other
reserves
Retained
earnings
Total
£000
3,356
£000
£000
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
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
-
-
-
-
510
10,530
-
-
-
-
Total contributions by and distributions to owners of the Company
510
10,530
-
-
-
-
262
262
3,415
3,415
3,415
3,415
-
(3,339)
-
(3,339)
11,040
(3,339)
262
7,963
At 31 October 2022
5,585
42,130
3,961
16,548
68,224
The notes on pages 73-109 form part of these financial statements.
There was no other comprehensive income during the current and prior years.
71
ANNUAL REPORT AND ACCOUNTS 2022 Consolidated and Company Cash Flow Statement
As at 31 October 2022
Group
Company
Note
2022
£000
2021
£000
2022
£000
2021
£000
Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Net movement in provisions
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
Disposal of investments
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
Proceeds from new loans
Lease payments
Repayment of borrowings
Dividends paid to shareholders
Net cash generated from / (used in) financing activities
33
3
3
22
16
35
35
27
23
24
34
11
Net (decrease) / increase in cash and cash equivalents
Effects of exchange rate changes
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
23
The notes on pages 73-109 form part of these financial statements.
13,839
10,577
(12,185)
(1,098)
166
(399)
-
(3,342)
10,264
264
(3,560)
(98)
(10,136)
2,252
7
4
-
193
(102)
(96)
(1,462)
9,110
340
(1,563)
(2,156)
(82)
570
-
753
-
(11,267)
(2,138)
11,040
9,485
(4,229)
(474)
(3,339)
12,483
11,480
56
19,641
31,177
1,025
-
(4,392)
(900)
(3,021)
(7,288)
(316)
(23)
19,980
19,641
-
(171)
-
-
(12,356)
-
(905)
-
(11,147)
2,252
-
4
5,438
(4,358)
11,040
9,485
-
(474)
(3,339)
(16,712)
(2)
-
7
5
55
(4)
-
(103)
(1,150)
-
(427)
-
-
570
-
753
3,150
4,046
1,025
-
-
(900)
(3,021)
(2,896)
-
-
7
7
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ANNUAL REPORT AND ACCOUNTS 2022 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
BASIS OF CONSOLIDATION
The Group’s financial statements have been prepared in accordance
with UK adopted International Accounting Standards. 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 UK
adopted International Accounting Standards requires the use of
certain critical accounting estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on
management’s best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
The Group has taken advantage of the audit exemption available under
section 479(c) of the Companies Act 2006 for five of its subsidiaries,
Glasson Group (Lancaster) Limited (company number 03230345),
Youngs Animal Feeds Limited (company number 04128486), Humphrey
Poultry (Holdings) Limited (company number 13882065), Humphrey
Feeds Limited (company number 00884405) and Humphrey Pullets
Limited (company number 06780228). The Company has provided
parent guarantees to these subsidiaries which have taken advantage
of the exemption from audit.
GOING CONCERN
The Directors have prepared the financial information presented for
the 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 Group and Company 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 5-35. 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. More detail on outlook is contained within the
Strategic Report on page 5-35.
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
73
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 con-
tingent liabilities are initially recognised at their fair values at the ac-
quisition date. The fair value of contingent consideration is assessed
using management judgement to reflect the likelihood of the pertinent
matters being achieved. The results of acquired operations are includ-
ed in the consolidated statement of comprehensive income from the
date on which control is obtained. They are deconsolidated from the
date on which control ceases.
Associates are entities over which the Group has significant influence
but not control, generally accompanied by a share of between 20%
and 50% of the voting rights. Joint ventures are entities over which the
Group has joint control. Investments in joint ventures and associates
are accounted for using the equity method. 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 nutritional 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 to how our customers
purchase products, as described below:
ANNUAL REPORT AND ACCOUNTS 2022 Agriculture
For feed, seed, fertiliser and other agricultural products sold in bulk to
farmer customers, revenue is recognised on collection by, or delivery
to, the customer and the Group had evidence that all criteria for ac-
ceptance 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 historical experience has
shown that the value of these returns is immaterial.
Additionally the Group recognises an “Others” segment for any
minor peripheral activities not readily attributable to either of the main
segments.
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 a non-financial 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.
GRANT INCOME
INVESTMENT PROPERTY
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 relating to an 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.
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.
FINANCE INCOME
PROPERTY, PLANT AND EQUIPMENT
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.
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;
AMORTISATION OF INTANGIBLE ASSETS, SHARE-BASED
PAYMENTS AND NON-RECURRING EXPENSE ITEMS
•
leasehold land and building and right of use assets is over the
period of the lease;
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 as discussed in the non-IFRS alternative performance
measure ‘Underlying pre-tax profit’ in the Finance Review on page 27-
29.
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
• 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
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.
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Principal Accounting Policies continued
The cost of an intangible asset acquired in a business combination with
a definite useful life (three to eight years) is amortised on a straight-line
basis, with the carrying value being its fair value at the acquisition date.
Where intangibles (including brands) have an indefinite life, they are not
amortised, but assessed for impairment during the year. See Note 13
for details on intangibles movement during the period.
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
•
the contract cash flow characteristics of the financial asset.
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)
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
requirements apply, (see below) and will be charged through cost of
sales in the income statement.
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 included loans and other debt-type financial assets meas-
ured 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 meas-
ured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first
75
ANNUAL REPORT AND ACCOUNTS 2022
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.
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.
Trade and other receivables and loans to joint ventures
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.
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
IFRS 9 are applied.
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
Composite financial guarantees (not within the definition of IFRS 9)
over the general bank obligations of subsidiaries for debt instruments
held at amortised cost.
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
At inception of the hedge relationship, the group documents the
economic relationship between hedging instruments and hedged
items, including whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows of
hedged items. The group documents its risk management objective
and strategy for undertaking its hedge transactions.
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.
Both the ineffective portions and recycled amounts from OCI are put
through cost of sales, as management consider these to be integral to
commercial operations, rather than finance related.
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 (covering raw materials, consumables, finished goods and
goods for resale) are stated at the lower of cost and net realisable
value. Biological inventories are measured at fair value less estimated
cost to sell at the point of harvest. Cost comprises direct materials
and, where applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their present location
and condition. Where appropriate, cost is calculated on a specific
identification basis. Otherwise, inventories are valued using the first-in-
first-out method. Net realisable value represents the estimated selling
price less all estimated costs to completion and costs to be incurred in
marketing, selling and distribution.
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 and Company statement of cash flows,
cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
LEASES
The 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 on an annual basis.
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
economic environment.
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
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
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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.
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 Group’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 judgements and assumptions about the
measurement of certain assets, liabilities, revenues and expenses.
These assessments are continually evaluated based on historic
experience and expectations of future events that are believed to be
reasonable under the circumstances. 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.
Business combinations = Valuation techniques are used to determine
the fair value of certain assets and liabilities acquired in a business
combination, including the fair value of contingent consideration
which is dependent on the outcome of variables such as future
profitability.
Useful lives and residual values = A review of useful lives and residual
values of tangible and intangible assets is made at each reporting date
based on the expected utility of those assets. Uncertainties may exist
in relation to indefinite life, technological obsolescence and climate
related issues that may change the utility of the relevant asset.
Climate change
The Group has considered climate change as part of the cashflow
projections within going concern, impairment assessments and
viability, and the impact of climate change is not deemed to have a
significant impact on these assessments currently and therefore they
are not deemed to be a key source of estimation uncertainty. The
Group will continue to monitor the impacts of climate change over the
coming years.
Principal Accounting Policies continued
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.
CURRENT AND DEFERRED INCOME TAX
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% (2021: 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 2022.
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 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 Group.
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
77
ANNUAL REPORT AND ACCOUNTS 2022 Notes to the Financial Statements
For the year ended 31 October 2022
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 31 October 2021
New standards impacting the Group adopted in the annual financial statements for the year ended 31 October 2022, 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 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
1 January 2021
(issued on 27 August 2020)
• Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 30 June 2021
1 April 2021
(issued on 31 March 2021)
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 2023
• Amendments to IFRS 17 Insurance Contracts (issued on 18 May 2 017 and including amendments
issued on 25 June 2020)
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (issued on 27 August 2020)
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies (issued on 12 February 2021)
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (issued 7 May 2021)
• Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 Comparative
Information (issued 9 December 2021)
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
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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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
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.
All revenue during the current and prior financial years have arisen from revenue recognised at a point in time.
The segment results for the year ended 31 October 2022 are as follows:
Year ended 31 October 2022
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
Non-current asset additions including acquisitions
Segment assets
Segment liabilities
Add corporate net cash (note 23)
Less corporate and deferred tax liabilities
Net Assets
Included in segment assets above are the following investments in
joint ventures and associates
Specialist
Agricultural
Merchanting
Agriculture
£000
£000
564,263
148,771
14,108
553
14,661
7,939
8
7,947
3,772
13,490
146,008
(80,906)
2,591
1,260
75,099
(24,544)
Other
£000
-
(15)
247
232
12
-
4,212
-
Total
£000
713,034
22,032
808
22,840
(1,094)
166
(656)
21,256
(4,114)
17,142
6,375
14,750
225,319
(105,450)
119,869
14,151
(3,319)
130,701
2,746
117
1,150
4,013
There were no revenues from transactions in the year with individual customers which amount to 10% or more of Group revenues.
79
ANNUAL REPORT AND ACCOUNTS 2022 2. SEGMENTAL REPORTING continued
The segment results for the year ended 31 October 2021 are as follows:
Year ended 31 October 2021
£000
£000
Specialist
Agricultural
Merchanting
Agriculture
Other
£000
Total
£000
358,961
141,425
-
500,386
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
Non-current asset additions including acquisitions
Segment assets
Segment liabilities
Add corporate net cash (note 23)
Less corporate and deferred tax liabilitie
Net Assets
Included in segment assets above are the following investments in
joint ventures and associates
3,697
524
4,221
7,120
33
7,153
(208)
120
(88)
3,463
3,860
101,812
(56,547)
2,676
2,094
66,237
(20,139)
-
-
6,808
-
2,386
115
840
There were no revenues from transactions in the year with individual customers which amount to 10% or more of Group revenues.
3. FINANCE COSTS
Interest expense:
Interest payable on borrowings
Interest payable on leases
Interest receivable:
Interest received from bank deposits
Interest received from customers
Net finance costs
4. OTHER OPERATING INCOME
Rental income
Investment income
2022
£000
(399)
(257)
(656)
66
100
166
(490)
2022
£000
333
2
335
10,609
677
11,286
-
193
(383)
11,096
(2,162)
8,934
6,139
5,954
174,857
(76,686)
98,171
9,243
(1,692)
105,722
3,341
2021
£000
(102)
(281)
(383)
57
136
193
(190)
2021
£000
361
-
361
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Notes to the Financial Statements continued
5. AMORTISATION OF INTANGIBLE 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 combination expenses
Fair value change in Investment property
2022
£000
154
-
262
416
572
522
1,094
Non-recurring items in 2022 consisted of:
• Business combination expenses in relation to the acquisition of Humphreys Poultry (Holdings) Limited in March 2022.
• The fair value change in investment property followed a professional valuation carried out by BNP Paribas Real Estate in July 2022.
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:
Depreciation of right-of-use assets
Amortisation of intangibles
Fair value (gains) / losses on derivative financial instruments
Hedge ineffectiveness for the period
(Profit) on disposal of fixed assets
(Profit) 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
2022
£000
37,724
617,170
2,290
4,085
154
(627)
104
(132)
(86)
349
2022
£000
175
2021
£000
39
95
343
477
-
-
-
2021
£000
31,085
431,424
2,165
3,974
39
23
46
(86)
(14)
205
2021
£000
119
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
81
2022
£000
676
676
2021
£000
572
572
ANNUAL REPORT AND ACCOUNTS 2022 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
2022
£000
32,688
3,318
1,456
262
37,724
The average number of employees, including Directors, employed by the Group during the year was as follows:
Administration
Production
Sales, distribution and depots
2022
No.
120
139
684
943
2021
£000
27,053
2,672
1,017
343
31,085
2021
No.
106
143
661
910
The parent company did not have any employees in the current or prior year other than executive directors who are remunerated by other Group
Companies, and four non-executive directors with a gross cost categorised as fees of £220,000 (2021: £210,000) not included in the above sums.
9. DIRECTORS’ REMUNERATION
Directors’ emoluments
Social security costs
Company contributions to money purchase pension schemes
Aggregate gains made on the exercise of Approved options
2022
£000
1,039
142
48
16
1,245
2021
£000
854
97
37
18
1,006
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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)
2022
£000
492
352
n/a
n/a
71
42
40
42
1,039
2021
£000
327
254
86
35
56
41
40
15
854
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ANNUAL REPORT AND ACCOUNTS 2022 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
2022
£000
3,627
136
3,763
(76)
295
219
3,982
2022
No.
2
£000
28
20
n/a
48
2022
£000
16
-
16
2021
No.
3
£000
20
16
1
37
2021
£000
9
9
18
2021
£000
1,901
(4)
1,897
57
103
160
2,057
Factors affecting tax charge for the year
The tax assessed for the year is lower (2021: lower) than the standard rate of Corporation Tax in the UK applicable to the Group 19% (2021: 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% (2021: 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
Short term timing differences
Accelerated capital allowances
Movement on unrecognised deferred tax
Other items
Total tax charge for year
Factors that may affect future tax charges
2022
£000
21,124
4,014
(132)
273
136
3
(76)
(366)
130
3,982
2021
£000
10,991
2,088
(105)
3
(4)
-
57
22
(4)
2,057
In the Budget in November 2022, the new Chancellor confirmed that the main rate of Corporation Tax will rise from 19% to 25% with effect from
April 2023 as had been substantively enacted in May 2021. This will increase the Group’s future tax charge accordingly.
83
ANNUAL REPORT AND ACCOUNTS 2022 11. DIVIDENDS
Final dividend paid for prior year
Interim dividend paid for current year
2022
£000
2,134
1,205
3,339
2021
£000
2,007
1,014
3,021
Subsequent to the year end it has been recommended that a final dividend of 11.60p per ordinary share (2021: 10.50p) be paid on 28 April 2023.
Together with the interim dividend already paid on 29 October 2022 of 5.40p net per ordinary share (2021: 5.00p) this will result in a total dividend
for the financial year of 17.00p net per ordinary share (2021: 15.50p).
12. EARNINGS PER SHARE
Earnings attributable to shareholders (£000)
Basic earnings per share
Diluted earnings per share
2022
17,142
2021
8,934
2022
17,142
2021
8,934
Weighted average number of shares in issue during the year (number ‘000)
20,722
20,120
21,254
20,524
Earnings per ordinary 25p share (pence)
82.72
44.40
80.65
43.53
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.
2022
2021
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)
17,142
-
17,142
20,722
532
21,254
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Earnings per
Earnings
Weighted average
number of shares
(number ‘000)
Earnings
per share
share
82.72
(2.07)
8,934
-
20,120
44.40
404
(0.87)
80.65
8,934
20,524
43.53
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ANNUAL REPORT AND ACCOUNTS 2022 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 2020
Additions – Business Combinations
Impairment Charged
At 31 October 2021
Additions- Business Combination
At 31 October 2022
£000’s
Cost
16,276
50
-
16,326
1,811
18,137
£000’s
Impairment
£000’s
Net book value
(1,909)
-
(95)
(2,004)
-
(2,004)
14,367
50
(95)
14,322
1,811
16,133
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.
Goodwill is allocated to specific cash generating units (“CGU’s”) as it
arises, and 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 the only change from the prior year has
been the addition of a Humphrey CGU within the Agriculture segment
for the acquisition of Humphrey Poultry (Holdings) Limited.
The carrying amount of goodwill allocated to each CGUs is Glasson
£786,000 (2021: £786,000), Agricultural Supplies £9,930,000 (2021:
£9,930,000), Grainlink £3,606,000 (2021: £3,606,000) and Humphrey
£1,811,000 (2021: Nil).
Annual impairment reviews were performed by comparing the carrying
value of the cash generating unit with its recoverable amount.
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.
A pre-tax discount rate of 7.13% was applied for all
CGUs (2021: 7.35%) except Humphrey where a rate of 7.69% was
used, with these rates being derived from the Group’s weighted average
cost of capital of 7.17% (2021: 7.35%) taking into account any specific
risks relating to each CGU.
The forecasted cash flows are extrapolated based on a 2 to 5 year
average growth rate of 1% (2021:2%) and perpetuity growth rate of
1.5% (2021: 2.0%) for both Agriculture and Specialist Agricultural
Merchanting segmental CGU’s, both of which are considered prudent
under current uncertain economic conditions.
All calculations indicated adequate headroom in these results for the
value in use compared to the carrying value.
Sensitivity analysis has been considered for the key assumptions
by applying a 100 basis point reduction to both the perpetuity growth
rate and the 2 to 5 year growth rate, and by applying 100 basis point
increase to the pre-tax discount rate. This had no impact on the result
of the impairment tests for the continuing Agriculture and Specialist
Agricultural Merchanting CGU’s. However, for the in-year acquisition,
Humphrey, where the pre-tax discount and the growth rates were
increased and decreased respectively by 100 basis points, an
impairment of £1.35m was identified where all other variables remained
constant, with the recoverable amount being £11.00m and the carrying
value being £12.35m. The pre-tax discount rate would need to increase
to 7.78% before headroom was extinguished in the Humphrey CGU.
Current general inflationary conditions are not considered an added risk
factor for the impairment calculations, as the Group’s business model
ensures input cost increases are passed on as appropriate.
The impairment within the Agricultural segment during the previous year
of £95,000 relates to the carrying goodwill held within Glasson Grain Ltd
relating to Horti Stores, which was acquired in 2015 and which ceased
trading during that year
85
ANNUAL REPORT AND ACCOUNTS 2022 14. INTANGIBLE ASSETS
Group
Cost
Balance as at 1 November 2020
Additions
At 31 October 2021
Additions- Business Combination
(see note 35)
At 31 October 2022
Aggregate amortisation
Balance at 1 November 2020
Charge for the year
At 31 October 2021
Charge for the year
At 31 October 2022
Brand
£000
Key and other
customer
accounts
£000
Customer order books
£000
Trademarks
£000
-
-
-
3,759
3,759
-
-
-
-
-
-
-
-
1,095
1,095
-
-
-
113
113
982
-
345
50
395
-
395
126
37
163
39
202
193
232
10
-
10
-
10
4
2
6
2
8
2
4
Net book value At 31 October 2022
Net book value At 31 October 2021
3,759
-
The additions in the year relate to the acquisition of Humphrey Poultry (Holdings) Limited with the intangible items identified
following a purchase price analysis review which included Brands valued using the relief from royalty method and key and other
accounts identified using the multiple excess earnings method.
Total
£000
355
50
405
4,854
5,259
130
39
169
154
323
4,936
236
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ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc
Notes to the Financial Statements continued
15. INVESTMENT PROPERTY
Investment property relates to a redeveloped retail property in Pwllheli. The amount of rent receivable from the Investment property in the year was
£211,000 (2021: £205,000). Direct operating expenses associated with this investment property amounted to £17,082 in the year (2021: £18,206).
Group and Company
Balance as at 1 November 2021
Fair value movement
Balance as at 31 October 2022
2022
£000
2,372
(522)
1,850
An Investment property valuation was carried out by BNP Paribas Real Estate on 24 June 2022 which concluded the property had an open market
valuation of £1,850,000. The market valuation of the investment property was based on a level 2 category valuation where use has been made
of: sale prices per square metre of similar properties in similar locations, observable current market rents per square metre for similar properties in
similar locations, and property yields derived from recent transactions.
Consequentially, the Group and Company have recognised a fair value movement charge of £521,941 in the period which has been charged to
non-recurring items in the Income Statement, refer to Note 5.
87
ANNUAL REPORT AND ACCOUNTS 2022 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 2020
Additions
Acquisitions
Disposals
At 31 October 2021
Additions
Acquisitions (see note 35)
Reclassifications
Disposals
Obsolete asset disposals
At 31 October 2022
Depreciation
At 1 November 2020
Charge for the year
On disposals
At 31 October 2021
Charge for the year
Reclassification
Disposals
Obsolete asset disposals
At 31 October 2022
Net book value at 31 October 2022
Net book value at 1 November 2021
1,298
153
-
(149)
1,302
172
-
219
-
-
1,693
414
102
(52)
464
113
219
-
-
796
897
838
15,507
333
-
-
15,840
755
1,895
-
-
(446)
18,044
6,032
388
-
6,420
424
-
-
(446)
6,398
11,646
9,420
23,068
3,862
989
-
(333)
23,724
2,552
386
27
(830)
(6,234)
19,625
16,396
1,441
(287)
17,550
1,516
-
(790)
(6,234)
12,042
7,584
6,174
88
-
(816)
3,134
81
285
284
(204)
(2,292)
1,288
3,348
234
(762)
2,820
237
-
(191)
(2,292)
574
714
314
17,067
4,050
241
(588)
20,770
1,749
210
(2760)
(873)
(994)
18,102
5,827
3,974
(74)
9,727
4,085
(2,449)
(469)
(994)
9,900
8,202
11,043
Total
£000
60,802
5,613
241
(1,886)
64,770
5,309
2,776
(2,230)
(1,907)
(9,966)
58,752
32,017
6,139
(1,175)
36,981
6,375
(2,230)
(1,450)
(9,966)
29,710
29,042
27,789
During the period a detailed review of historic records contained in the Group’s fixed asset registers were conducted which identified all obsolete
items which have been removed from the accounting records and treated as obsolete asset disposals, and reclassification of certain assets. As the
net book value of these items were zero, there has been no impact on the carrying fair value of the Group’s property, plant and equipment assets.
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Notes to the Financial Statements continued
16. PROPERTY, PLANT AND EQUIPMENT continued
Company
Cost
At 1 November 2020
Additions
At 31 October 2021
Additions
At 31 October 2022
Depreciation
At 1 November 2020
Charge for the year
At 31 October 2021
Charge for the year
At 31 October 2022
Net book value at 31 October 2022
Net book value at 31 October 2021
Leasehold land and
buildings
£000
Freehold land and
buildings
£000
664
99
763
150
913
285
78
363
89
452
461
399
13,967
327
14,294
755
15,049
5,409
366
5,775
402
6,177
8,872
8,520
Total
£000
14,631
426
15,057
905
15,962
5,694
444
6,138
491
6,629
9,333
8,919
The Company has no right of use assets in either the year ended 31 October 2022 or 31 October 2021.
89
ANNUAL REPORT AND ACCOUNTS 2022 17. FIXED ASSET INVESTMENTS
Group
Cost
At 1 November 2020
Share of profit or investment income
Dividend distribution
At 31 October 2021
Share of profit or investment income
Dividend distribution
Disposal
At 31 October 2022
Provision for impairment
At November 2021 and 31 October 2022
Net book value at 31 October 2022
Net book value at 31 October 2021
Company
Cost
At 1 November 2021
Additions – Business combination (see note 35)
At 31 October 2022
Provision for impairment
At 1 November 2021
At 31 October 2022
Net book value at 31 October 2022
Net book value at 31 October 2021
Joint Ventures
& Associates
£000
Other unlisted
investments
£000
3,522
572
(753)
3,341
676
(4)
-
4,013
-
4,013
3,341
90
2
-
92
2
-
(6)
88
-
88
92
Share in group
undertakings
Joint Ventures &
Associates
£000
£000
42,562
13,147
55,709
(601)
(601)
55,108
41,961
191
-
191
-
-
191
191
Total
£000
3,612
574
(753)
3,433
678
(4)
(6)
4,101
-
4,101
3,433
Total
£000
42,753
13,147
55,900
(601)
(601)
55,299
42,152
90
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ANNUAL REPORT AND ACCOUNTS 2022 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
Humphrey Poultry (Holdings) Limited
Humphrey Feeds Limited
Humphrey Pullets Limited
Eifionydd Farmers Limited
Wrekin Grain 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
100
100
100
Feed and Fertiliser merchant
Agricultural merchant
Dormant company
Equine and pet products distributor
Grain merchant
Holding company
Agricultural merchant
Pullet supplier
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:
WynnstayAgricultural (Supplies)
Limited
Stanton Farm Supplies Limited
Youngs Animal Feeds Limited
Eifionydd Farmers Limited
Glasson Group (Lancaster)
Limited
Glasson Grain Limited
Humphrey Poultry (Holdings)
Limited
Humphrey Feeds Limited
Humphrey Pullets 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
Distribution of animal feeds
Montgomery Way, Carlisle, CA1 2UY
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 the joint ventures listed above are all 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
Cash and cash equivalents
Current liabilities
Financial liabilities
Non-current liabilities
Net Assets
91
2022
£000
710
6,032
177
(2,247)
(700)
-
3,972
2021
£000
713
6,379
78
(1,987)
(1,862)
(21)
3,300
ANNUAL REPORT AND ACCOUNTS 2022 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
Net finance costs
2022
£000
24,198
(23,350)
(40)
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
2022
£000
808
2021
£000
20,147
(19,427)
(43)
2021
£000
677
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
2022
£000
297
(174)
123
41
-
-
-
2021
£000
285
(162)
123
41
-
-
-
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 2022
31 August 2022
31 October 2022
31 January 2022
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ANNUAL REPORT AND ACCOUNTS 2022 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
2022
£000
13,023
13,023
-
-
492
134
Group
Company
2022
£000
555
1,067
1,622
(70)
(70)
8,526
(280)
2021
£000
1,268
3,319
4,587
(2)
(2)
6,254
(139)
2022
£000
-
1,067
1,067
-
-
-
-
2021
£000
1,127
1,127
-
-
444
159
2021
£000
-
3,319
3,319
-
-
-
-
93
ANNUAL REPORT AND ACCOUNTS 2022 19. INVENTORIES
Raw materials and consumables
Finished goods and goods for resale
Biological Assets
Group
2022
£000
20,416
49,971
708
71,095
2021
£000
13,837
36,713
-
50,550
Company
2022
£000
-
-
-
-
Inventories are stated after a provision for impairment of £846,000 (2021: £400,000) (Company £nil (2021: £nil)). During the period, the sum
of £406,000 (2021: £4,000) was charged to the provision for impairment.
£1,824,000 of inventories relates to the acquisition during the year which is included in 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
2022
£000
-
94,823
1,084
668
96,575
2021
£000
-
70,320
1,161
1,030
72,511
Company
2022
£000
13,023
-
-
111
13,134
2021
£000
-
-
-
-
2021
£000
1,127
-
-
-
1,127
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 £Nil (2021: £627,000) included within
Other Receivables. Amounts owed by subsidiary undertakings are repayable in line with standard company credit terms.
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 25 basis points across each category the impact on the income statement would be
£240,000 loss or gain, respectively.
The lifetime expected loss provision for trade receivables is as follows:
31 October 2022
Expected loss rate
Gross carrying amount
Loss provision
Trade receivables, net of loss allowance
31 October 2021
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
0.14%
68,482
(99)
68,383
Current
£000
0.22%
45,643
(100)
45,543
0.17%
16,242
(27)
16,215
0.42%
5,681
(24)
5,657
17.83%
5,559
(991)
4,568
More than 30
More than 60
More than 120
days past due
days past due
days past due
£000
£000
£000
0.62%
12,977
(80)
12,897
1.32%
8,879
(117)
8,762
19.60%
3,878
(760)
3,118
Total
£000
1.19%
95,964
(1,141)
94,823
Total
£000
1.48%
71,377
(1,057)
70,320
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ANNUAL REPORT AND ACCOUNTS 2022 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
At 31 October 2022
21. TRADE AND OTHER PAYABLES
Current
Trade payables
Amounts owed to subsidiary undertakings
Other payables
Accruals and deferred income
Other taxes and social security
Contingent consideration
Non-current
Contingent consideration
Government grants
Group
2022
£000
1,057
495
(411)
1,141
Group
2022
£000
85,694
-
5,922
10,242
1,083
2,074
105,015
25
11
36
2021
£000
693
609
(245)
1,057
2021
£000
68,923
-
945
5,518
654
172
76,212
25
13
38
Company
2022
£000
-
-
-
-
Company
2022
£000
-
59
319
403
-
2,000
2,781
-
-
-
2021
£000
-
-
-
-
2021
£000
-
-
294
-
-
-
294
-
-
-
Total trade and other payables
105,051
76,250
2,781
294
The carrying value of trade and other payables classified as financial liabilities is measured at amortised cost which approximates to fair value.
Contingent consideration is measured at fair value, refer to business combinations note 35.
22. PROVISIONS
Balance as at 1 November 2021
Charge for the year
Utilised
At 31 October 2022
2022
£000
243
282
(180)
345
2021
£000
146
193
(96)
243
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, and for the outstanding rental costs on a vacated property and site closures. The closing
provisions are expected to be realised in the next 12 months.
Legal Provision
Onerous rent
Site closure
At 31 October
2022
£000
193
108
44
345
2021
£000
193
-
50
243
The legal provision of £193,000 (2021: £193,000) relates to disputes over the classification of certain types of grain where the achieved out-turn
prices have been lower than initially expected. The provision for onerous rent relates to the reclassification of a prior year charge from accruals in
relation to the vacation of a leased property. The site closure provision relates to the closure of the Selby seed plant during 2020 where certain
relocation costs remain outstanding. All provisions are deemed to be current.
95
ANNUAL REPORT AND ACCOUNTS 2022 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/(borrowings) and lease liabilities
Non-current
Bank loans
Borrowings
Non-property leases
Property leases
Lease liabilities
Total non-current net (borrowings) and lease liabilities
Total net cash/(borrowings) and lease liabilities
Group
2022
£000
31,177
31,177
(2,371)
(672)
(3,043)
(1,647)
(1,697)
(3,344)
24,790
(6,640)
(6,640)
(1,645)
(2,354)
(3,999)
(10,639)
14,151
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
Company
2022
£000
5
5
(2,371)
(672)
(3,043)
-
-
-
2021
£000
7
7
-
(672)
(672)
-
-
-
(3,038)
(665)
(6,640)
(6,640)
-
-
-
(6,640)
(9,678)
-
-
-
-
-
-
(665)
Total net cash/(borrowings) and lease liabilities, excluding property
leases
18,202
15,462
(9,678)
(665)
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 £1,652,000
(2021: £585,000) which is held at International FC Stones for wheat futures hedging purposes. HSBC UK Bank Plc’s credit rating per
Moody’s for long-term deposits is Aa3 (2021: Aa3).
£3,623,000 of the cash and cash equivalent balances are denominated in foreign currencies, EUR (99%) and USD (1%) (2021: £412,000, in EUR
(99%) and USD (1%)). 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. During the year, a new bank
loan of £9,485,000 was drawn, structured as a term facility with quarterly repayments of 5% of the original loan repayable. Interest on this loan is
1.75% over the daily SONIA rate up to the point of repayment.
Loan stock is redeemable at par at the option of the Company or the holder. Interest of 1.5% (2021: 0.5%) per annum is payable to the holders.
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ANNUAL REPORT AND ACCOUNTS 2022 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 2022.
Number of lease
contracts at
November 2021
Additions
Additions
Business
Combinations
Expired or
Disposed
Number of lease
contracts at October
2022
Fixed payments
%
48
21
121
190
-
3
52
55
-
-
17
17
(9)
(6)
(36)
(51)
39
18
154
211
Land and buildings
£000
Plant, machinery and
motor vehicles
£000
Group
Property leases
Plant and equipment
leases
Vehicle leases
Total
Group
Right-of-use assets
At November 2021
Additions
Additions - Business combination (see note 35)
Reclassification to PPE
Amortisation
Disposal
At 31 October 2022
Group
Lease liabilities
At 1 November 2021
Additions
Additions - Business combination (sese note 35)
Interest expense
Lease payments
Disposal
At 31 October 2022
Group
Short-term lease expense
Low value lease expense
2022
Group
Lease aging
2021
Group
Lease liabilities
97
18%
10%
72%
100%
Total
£000
11,043
1,749
210
(311)
(4,085)
(404)
8,202
Total
£000
9,726
1,749
210
257
(4,229)
(370)
7,343
6,113
-
-
-
(2,194)
-
3,919
4,930
1,749
210
(311)
(1,891)
(404)
4,283
Land and buildings
£000
Plant, machinery and
motor vehicles
£000
6,220
-
-
113
(2,281)
-
4,052
2022
£000
341
8
349
3,506
1,749
210
144
(1,948)
(370)
3,291
2021
£000
180
25
205
Within one
year
£000
One to two
years
£000
Two to five
years
£000
Over five
years
£000
Total
£000
3,344
1,824
2,175
-
7,343
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
ANNUAL REPORT AND ACCOUNTS 2022 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
Contingent consideration
Derivative financial instruments
Group
Company
2022
£000
31,177
-
94,823
1,067
599
127,666
2021
£000
19,641
-
70,320
3,319
325
93,605
2022
£000
5
13,023
-
1,067
-
14,095
Group
Company
2022
£000
9,683
7,343
-
91,616
10,242
2,099
133
121,116
2021
£000
672
9,726
-
69,868
5,518
197
193
86,174
2022
£000
9,683
-
59
319
403
2,000
-
12,464
2021
£000
7
1,127
-
3,319
-
4,453
2021
£000
672
-
-
294
-
-
-
966
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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
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 to subsidiary undertakings
Trade payables and other payables
Accruals
Contingent consideration
Fair Value
Amortised cost
2022
£000
-
-
599
599
Fair Value
2022
£000
-
-
-
-
2,099
133
2,232
2021
£000
-
-
325
325
2021
£000
-
-
-
-
197
193
390
2022
£000
94,823
1,067
-
95,890
Amortised cost
2022
£000
9,683
7,343
91,616
10,242
-
-
2021
£000
70,320
3,319
-
73,639
2021
£000
672
9,726
69,868
5,518
-
-
118,884
85,784
Fair Value
Amortised cost
2022
£000
-
-
-
Fair Value
2022
£000
-
-
-
-
2,000
2,000
2021
£000
-
-
-
2021
£000
-
-
-
-
-
-
2022
£000
13,023
1,067
14,090
Amortised cost
2022
£000
9,683
59
319
403
-
10,464
2021
£000
1,127
3,319
4,446
2021
£000
672
-
294
-
-
966
(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.
Fair Value
Current Non-Current
Current Non-Current
Asset derivative financial instruments:
Forward FX contracts- designated cash flow hedge instruments
Wheat futures contracts- designated cash flow hedge instruments
Wheat futures contracts- fair value through profit or loss
2022
£000
46
39
514
599
2021
£000
206
119
-
325
2022
£000
46
38
514
598
2022
£000
-
1
-
1
2021
£000
206
114
-
320
Liability derivative financial instruments:
£000
£000
£000
£000
£000
Forward FX contracts- designated cash flow hedge instruments
Wheat futures contracts- fair value through profit or loss
53
80
133
-
193
193
53
-
53
-
80
80
-
53
53
2021
£000
-
5
-
5
£000
-
140
140
99
ANNUAL REPORT AND ACCOUNTS 2022 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
Contingent
consideration
Realisation of net assets on
Management accounts
completion and target earnings
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
(designated hedging instruments)
Derivative financial liabilities (fair value
through profit or loss)
Contingent consideration
Level 1
2022
£000
85
514
599
Level 1
2022
£000
53
80
-
133
2021
£000
325
-
325
2021
£000
-
193
-
193
Level 2
2022
£000
-
-
-
Level 2
2022
£000
-
-
-
-
2021
£000
-
-
-
2021
£000
-
-
-
-
Level 3
2022
£000
-
-
-
Level 3
2022
£000
-
-
2, 099
2, 099
2021
£000
-
-
-
2021
£000
-
-
197
197
The reconciliation of the opening and closing fair value balance of level 3 financial instruments is provided below:
Contingent consideration
As at 31 October 2020
Payments contingent consideration in year
New contingent consideration in year
As at 31 October 2021
Payments out of contingent consideration in year
Contingent consideration recognised in year
As at 31 October 2022
Group
£000
229
(82)
50
197
(98)
2,000
2,099
Company
£000
-
-
-
-
-
2,000
2,000
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.
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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 2022, 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 £104,000 (2021: £46,000) at the balance
sheet date.
Hedge Type
Hedging Instrument
Hedged Item
Nominal
Value
Average contracted
Derivatives prices
Maturing
Cash flow hedge Forward FX GBP/EUR Physical Wheat Grain & Fertiliser
16,107
GBP/EUR 1.1587
Group Qrt 1 to Group Qrt
2, 2023
£000
Cash flow hedge Forward FX GBP/USD Physical Wheat Grain & Fertiliser
4,420
GBP/USD 1.1491
Group Qrt 1, 2023
Cash flow hedge
Cash flow hedge
UK Feed Wheat
futures contract- IFLX
UK Feed Wheat
futures contract- IFLX
Physical Wheat Grain
Physical Wheat Grain
£271.32
Group Qrt 3, 2023
£269.43
Group Qrt 1, 2024
570
189
21,286
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 £40,000 (2021: £108,000)
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:
2022
£000
639
2022
£000
(40)
2022
£000
599
2021
£000
433
2021
£000
(108)
2021
£000
325
173
(40)
133
301
(108)
193
101
ANNUAL REPORT AND ACCOUNTS 2022
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 £46,000 as an asset and £53,000 as a liability with a net liability of £7,000 (2021: £206,000)
with the principal nominal amounts of the forward purchased currency, based in sterling of £20,527,000 (2021: £25,104,000).
The Group is primarily exposed to foreign exchange risk in relation to Sterling against movements in US Dollar and Euro. 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 2022 and 31 October 2021, the
exposure is minimal.
iii) Commodity market risk
Whilst the Group does not speculatate 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 £145
gain or loss (2021: £4,000), 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 £474,000 (2021; £900,000). The Group has
been largely unaffected by phase 1 and 2 of the Interest rate benchmark reform, under IFRS9.
At 31 October 2022, if interest rates had been 150 basis points higher or lower with all variables held constant, profit after tax and net assets
would have been £135,000 (2021: £34,000) lower or higher, respectively mainly as a result of higher/ lower interest expense on sterling floating rate
borrowings. The directors consider that 150 basis points increase 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 (2021: £10.5m and £7.5m) to manage liquidity needs. The overdraft facility is renewable in April
2023, 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. Interest projections for both
bank loans and other borrowings and lease liabilities, have been calculated using the future effective rate of interest applicable to each instrument
type and then discounted using the appropriate UK gilt rate to derive the present value of interest.
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 102
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Notes to the Financial Statements continued
25. FINANCIAL INSTRUMENTS continued
RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES continued
Group
Bank loans and other borrowings
Bank loans and other borrowings -
interest projections
Finance lease liabilities
Finance lease liabilities – interest projections
Derivatives
Trade payables and other payables
Accruals
Contingent consideration
Company
Bank loans and other borrowings
Bank loans and other borrowings -
interest projections
Amounts due from subsidiary
undertakings
Trade payables and other payables
Accruals
Contingent consideration
vi) Capital management risk
2022
Within
one
year
£000
One to
two
years
£000
Two to
five
years
£000
Total
£000
9,683
3,043
3,794
2,846
991
345
303
343
Total
£000
672
53
2021
Within
one
year
£000
One to
two
years
£000
Two to
five
years
£000
672
6
-
9
-
38
7,343
3,344
1,824
2,175
9,726
3,995
2,821
2,910
602
133
213
53
91,616
91,616
10,242
10,242
2,099
2,074
178
80
-
-
25
211
-
-
-
-
882
193
249
53
69,868
69,868
5,518
5,518
197
172
223
140
-
-
25
410
-
-
-
-
122,709
110,930
6,204
5,575
87,109
80,533
3,218
3,358
2022
Within
one
year
£000
One to
two
years
£000
Two to
five
years
£000
Total
£000
9,683
3,043
3,794
2,846
991
59
319
403
345
59
319
403
2,000
13,455
2,000
6,169
303
343
-
-
-
-
-
-
-
-
2021
Within
one
year
£000
672
6
-
Total
£000
672
53
-
294
294
-
-
-
-
One to
two
years
£000
Two to
five
years
£000
-
9
-
-
-
-
9
-
38
-
-
-
-
38
4,097
3,189
1,019
972
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.
The 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 (%)
2022
£000
31,177
(9,683)
(7,343)
14,151
130,701
10.83%
2021
£000
19,641
(672)
(9,726)
9,243
105,722
8.74%
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.
103
ANNUAL REPORT AND ACCOUNTS 2022 26. DEFERRED TAXATION
At 1 November 2021
Tax equalisation
Business combination (see note 35)
Charge for the year in Statement of Income
Charge for the year in Statement of Changes in Equity
At 31 October 2022
The provision for deferred taxation is made up as follows:
Accelerated capital allowances
Other temporary and deductible differences
Group
2022
£000
474
2
1,000
219
(15)
1,680
Group
2022
£000
373
1,307
1,680
2021
£000
276
(24)
-
160
62
474
2021
£000
449
25
474
Company
2022
£000
-
-
-
-
-
-
Company
2022
£000
-
-
-
2021
£000
-
-
-
-
-
-
2021
£000
-
-
-
A deferred tax asset has not been recognised at Group or Company level in respect of the movement in fair value on investment property
(see Note 15) as there is uncertainty as to whether an expected future capital gain will crystallise to offset the capital loss.
27. SHARE CAPITAL
Authorised
Ordinary shares of 25p each
Allotted, called up and fully paid
Ordinary shares of 25p each
2022
No. of shares
000
2022
Nominal Value
£000
2021
No. of shares
000
2021
Nominal Value
£000
40,000
22,340
10,000
5,585
40,000
10,000
20,299
5,075
During the year 75,891 shares (2021: 89,687) were issued with an aggregate nominal value of £19,000 (2021: £22,000) and were fully paid up
for equivalent cash of £459,000 (2021: £439,000) to shareholders exercising their right to receive dividends under the Company’s dividend scrip
scheme. A further 1,965,689 (2021: 158,138) shares with a nominal value of £491,000 (2021: £40,000) were issued for a cash value of £10,581,000
(2021: £586,000), with 65,689 shares being to satisfy the exercise of employee options and 1,900,000 shares issued in a private placing to
institutional shareholders.
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Notes to the Financial Statements continued
28. SHARE-BASED PAYMENTS
The Group has three share-based payment schemes in operation at 31 October 2022. 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.
Certain senior 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
2021
(Exercised)/
Issued in
year
Lapsed
in year
As at
31 October
2022
Discretionary Share Option Schemes
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
Granted August 2022
2.7500 Sep 2023 - Feb 2024
5.5000 Sep 2025 - Feb 2026
151,000
146,647
84,728
174,000
556,375
25,613
128,520
433,187
-
587,320
1,143,695
(30,575)
-
-
-
(30,575)
(23,182)
(562)
(11,370)
(142,710)
107,596
77,021
-
(4,882)
(3,119)
(20,000)
(28,001)
(2,431)
(15,788)
(31,324)
(1,568)
(51,111)
(79,112)
120,425
141,765
81,609
154,000
497,799
-
112,170
390,493
141,142
643,805
1,143,604
During the year 30,575 (2021: 24,000) Discretionary Share Options and 35,114 (2021: 134,138) Savings Related Options were exercised and
satisfied by the allotment of 65,689 (2021: 158,138) new shares by the Company. The other changes in the number of 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 142,710 new options were granted following a new SAYE invitation to all eligible employees (2021:
258,728 options granted to certain executives under the terms of the Group’s Performance Share Plan and approved CSOP scheme).
The weighted average market share price at the time of exercise of options exercised during the year was £6.08 (2021: £5.48).
Fair Value of Options
During the year, the Group charged £262,000 (2021: £343,000) 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
Weighted average exercise price
Expected volatility
Weighted average remaining contractual life
Number of options
Risk free interest rate at inception
Number of options exercisable - CSOP options
2022
£6.11
£5.84
£3.32
24.40%
1.09 years
1,021,179
0.10% - 3.07%
120,425
2021
£4.90
£4.58
£2.60
33.20%
1.83 years
963,977
0.10% - 0.75%
151,000
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.
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ANNUAL REPORT AND ACCOUNTS 2022
29. CAPITAL COMMITMENTS
At 31 October 2022 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
2022
£000
1,590
2021
£000
263
Company
2022
£000
-
2021
£000
-
Following the acquisition of Humphrey Poultry (Holdings) Limited, the Group operates three defined contribution pension schemes which are
administered on separate bases. The pension and other associated costs charge for the year £1,456,000 (2021: £1,017,000). The liability owed to
the pension schemes at 31 October 2022 was £169,000 (2021: £147,000).
31. EMPLOYEE SHARE OWNERSHIP TRUST
The Company operates an employee share ownership trust (ESOP). As at 31 October 2022, 16,834 ordinary 25p shares (2021: 16,834 ordinary
25p shares) were held by the trust with an aggregate market value at the year end of £102,855 (2021: £82,486). 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
2022
£000
3
-
n/a
542
-
4,268
2
-
4,815
2021
£000
5
-
21
383
-
3,248
1
-
3,658
2022
£000
-
-
n/a
90
-
1,277
-
-
1,367
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 of which S J Ellwood is a
director
Total sales
Balance outstanding
2022
£000
70
2021
£000
62
2022
£000
10
2021
£000
-
-
n/a
114
-
1,124
-
-
1,238
2021
£000
-
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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
Amortisation of right-of-use assets
Investment and goodwill impairment
Fair value movement in investment property
Equity investment revaluation
Amortisation of other intangible fixed assets
(Profit) on disposal of property, plant and equipment
(Profit) on disposal of right of use asset
Loss on relinquishment of property lease
Derivative held as FVPL
Hedge ineffectiveness
Government grant
Movement in provisions made
Interest on right-of-use liabilities
Net Interest expense / (income)
Share of post-tax results of joint ventures
Share-based payments
Changes in working capital (excluding effects of
acquisitions and disposals of subsidiaries):
(Increase) in inventories
(Increase) in trade and other receivables
Increase in payables
Cash generated from / (used in) operations
Group
2022
£000
17,142
3,982
-
-
2,289
4,086
-
522
-
154
(132)
(86)
-
(627)
104
(2)
(6)
257
233
(676)
262
2021
£000
8,934
2,057
-
-
2,165
3,974
95
-
2
39
(86)
(14)
26
23
46
(2)
193
281
(91)
(572)
343
(18,401)
(18,467)
23,205
13,839
(14,583)
(16,730)
24,477
10,577
Company
2022
£000
3,415
(187)
(5,438)
(4)
492
-
-
522
-
-
-
-
-
-
-
-
-
-
171
-
262
-
(11,905)
487
(12,185)
34. RECONCILIATION OF LIABILITIES FROM FINANCING
As at 1 November 2020
Cash-flows -Repayments of borrowings
-Payments of IFRS 16 lease liabilities
Non-Current
£000
6,509
-
-
Group
Current
£000
5,055
(900)
(4,392)
Total
£000
11,564
Non-Current
£000
-
(900)
(4,392)
Company
Current
£000
1,572
(900)
-
2021
£000
3,670
69
(3,150)
(753)
444
-
-
-
-
-
-
-
-
-
-
-
-
-
(51)
-
343
-
(1,127)
(543)
(1,098)
Total
£000
1,572
(900)
-
Non-cash flows
- Lease movements: additions, disposals and interest, net
(778)
4,904
4,126
As at 31 October 2021
Cash flows
-Receipt of borrowings 1
-Repayments of borrowings
-Business combination (see note 35)
-Payments of lease liabilities
Non-cash flows
- Lease movements: additions, disposals and interest, net
- Loans and borrowings reclassified
As at 31 October 2022
5,731
4,667
10,398
7,588
-
148
-
1,413
(4,241)
10,639
1,897
(474)
62
(4,229)
223
4,241
6,387
9,485
(474)
210
(4,229)
1,636
-
17,026
1 – Used for Business Combination funding, see Note 35.
107
ANNUAL REPORT AND ACCOUNTS 2022
-
-
-
-
7,588
-
-
-
-
-
-
672
672
1,897
(474)
9,485
(474)
-
-
-
-
-
-
-
9,683
(948)
6,640
948
3,034
2022
Lease Liabilities
Loan stocks
Borrowings
2021
Lease Liabilities
Loan stocks
Borrowings
Group
Company
Non-Current
£000
3,999
-
6,640
10,639
Current
£000
3,344
672
2,371
6,387
Total
£000
7,343
Non-Current
£000
-
672
9,011
17,026
-
6,640
6,640
Current
£000
-
672
2,371
3,043
5,731
3,995
9,726
-
-
672
-
672
-
5,731
4,667
10,398
-
-
-
-
-
672
-
672
Total
£000
-
672
9,011
9,683
-
672
-
672
35. BUSINESS COMBINATIONS
HUMPHREY POULTRY (HOLDINGS) LIMITED
On 18 March 2022, Wynnstay plc entered a business combination and acquired 100% of the shares of Humphreys Poultry Holdings Limited, which
in turn owns 100% of the shares in two commercial and operational entities Humphreys Feeds Limited and Humphreys Pullets Limited. The purpose
of the business combination is to strengthen the Group’s presence in the poultry feed market and expand its geographical coverage.
The consideration is £13.147m inclusive of cash and cash equivalents of £1.011m.
Trade Debtors
Other Debtors
Inventories
Cash and cash equivalents
Trade Creditors
Other Creditors
Leases
Deferred tax
Net Current Assets and Non-Current Liabilities
Tangible fixed assets
Net Assets
Current
£000
Non-Current
£000
5,003
595
2,144
1,011
(3,469)
(368)
(146)
-
4,770
-
4,770
-
-
-
-
-
-
(64)
(104)
(168)
1,545
1,377
Total
000
5,003
595
2,144
1,011
(3,469)
(368)
(210)
(104)
4,602
1,545
6,147
The provisional consideration payable is dependent on future product volumes of the commercial business acquired. The fair value of the contingent
consideration has been based on management’s expectation of the future performance of the business and that could range from £nil to £2.000m.
A full analysis of the provisional consideration is provided in the table below which includes the break-down of the tangible fixed assets which
incorporates freehold land and buildings for the amount of £1.830m, which reflects the current fair value assessment carried out by an independent
third-party valuation, which has not impacted the consideration, but only the analysis. The goodwill balance represents the assembled workforce
and future sales opportunities and is not expected to be deductible for tax purposes.
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 108
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Notes to the Financial Statements continued
Fair value of net assets acquired
Goodwill
Intangible - Brands
Intangible – Key and other accounts
Property, plant and equipment
Right of use assets
Trade Debtors
Other Debtors
Inventories
Cash and cash equivalents
Trade payables
Other payables
Lease liabilites
Deferred tax
Acquisition date – fair value of total net assets acquired
Represented by:
Cash settled to vendor during the period
Contingent consideration as at 31 October 2022
Provisional Consideration
Cashflow Statement:
Cash settled to vendor during the period
less cash and cash equivalents acquired
plus, cash settled to vendors during the period for prior acquisition
Acquisition date – fair value of total net assets acquired
Fair Value of
Net Assets
£’000
1,811
3,759
1,095
2,566
210
5,003
595
2,144
1,011
(3,469)
(368)
(210)
(1,000)
13,147
£’000
11,147
2,000
13,147
£’000
11,147
(1,011)
98
10,234
Directly attributable acquisition costs of £0.563m were incurred with the transaction, and these have been recognised as non-recurring expenses in
the income statement for the period and included in operating activities in the cash flow statement. During the last available audited accounts of the
acquired entities, for the period to February 2021, the annual aggregate revenues on a non-consolidated basis amounted to £41.446m and profit
before tax was £1.634m. Business combination accounting is expected to be finalised within 12 months from the completion date of the acquisition.
Amounts included in the Consolidated Statement of Comprehensive Income in the period to 31 October 2022 in relation to the acquired business
are revenues of £31.567m and profit before tax of £0.643m.
Contingent consideration of £0.098m was paid during the period to 31 October 2022 relating to other prior period acquisitions, resulting in a total
gross cash outflow of £11.245m or £10.234m net of cash acquired with the Humphrey transaction.
36. POST BALANCE SHEET EVENT
ACQUISITION OF TAMAR MILLING LIMITED
On 17 November 2022, Wynnstay Group PLC announced that Wynnstay (Agricultural Supplies) Ltd had acquired the entire share capital of Tamar
Milling Ltd, a manufacturer and supplier of blended feed products (“Tamar”), for an initial consideration of up to £1.5m (inclusive of up to £0.1m of
contingent consideration based on future product volumes).
Based in Whitstone, Cornwall, Tamar is a highly complementary acquisition to the Group, which strengthens the Company’s presence in the south-
west of England, adds a new farming customer base and provides good cross selling opportunities for other Group activities. The acquisition
establishes the Group’s first south-western feed manufacturing facility which enables the provision of its own bulk feed offering for the first time.
In the year ended 30 September 2021, Tamar generated revenues of £6.40m, and a profit before tax of £0.42m. Net assets at 30 September 2021
were £0.92m. The transaction initially appears to satisfy the IFRS 3 requirements of a business combination, and the Group intends to account for
the acquisition in the year ended 31 October 2023 where IFRS 3 criteria have been satisfied. As of the date of this report, insufficient information is
available to complete the business combination accounting as transaction completion accounts have not been completed by the vendors.
109
ANNUAL REPORT AND ACCOUNTS 2022 Notice of Annual General Meeting
Notice is hereby given that the thirty-first Annual General Meeting (the “Meeting”) of Wynnstay Group plc (the “Company”) will be held in the
Sovereign Suite, Shrewsbury Town Football Club, Oteley Road, Shrewsbury, Shropshire, SY2 6ST on Tuesday 21 March 2023 at 11.45 am to
transact the following business:
ORDINARY BUSINESS
1.
2.
3.
To receive and adopt the Company’s annual accounts for the financial year ended 31st October 2022 together with the Directors’ Report
and Auditors’ Report on those accounts.
To declare a final dividend for the year ended 31 October 2022.
To re-appoint the following Director who retires by rotation under Article 91:
Bryan Paul Roberts
4.
To re-appoint the following Director who retires by rotation under Article 91:
Howell John Richards
5.
6.
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.
That, the Rules of the Wynnstay Group Plc Approved Company Share Option Plan (CSOP) submitted to this meeting, marked for the
purposes of identification “Document A”, and signed by the Chairman of the Company, and the Rules of the Wynnstay Group Plc Save As
You Earn Share Option Plan (SAYE) submitted to this meeting, and marked for the purposes of identification “Document B” and signed by
the Chairman of the Company, be adopted and implemented by the Company with immediate effect and to remain in place until the expiry
of their registration with HMRC in January 2033.
SPECIAL BUSINESS
To consider and, if thought fit, pass the following Resolutions which will be proposed as Special Resolutions:
7.
8.
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 7 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:-
i. 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
ii. 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.
9.
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:-
i. 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);
ii. the minimum price which may be paid for such shares is £0.25 per share;
iii. 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;
iv. 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
v. 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
Dated: 31 January 2023
ANNUAL REPORT AND ACCOUNTS 2022 Wynnstay Group Plc 110
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Notes To The Notice Of Annual General Meeting
1. Meeting format
As at the date of this Notice, the Board intend to hold the 2023 AGM as a physical meeting and shareholders are therefore invited to attend
a traditional meeting in person. However, Government guidance around public gatherings can be changed at short notice and it may be
necessary to change arrangements 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. Adoption of share option schemes
Ordinary resolution 6 is put forward because the rules of both the existing CSOP and SAYE share option schemes are due to lapse in March
2023. The Directors consider it appropriate for these schemes to be renewed on the same terms as the previous schemes and they are
intended to take effect from the end of the existing schemes by which time approval of their registration with HMRC is anticipated. Copies
of both schemes are available for inspection without charge at the Registered Office of the Company during normal business hours and will
be available at the Meeting.
4. Authority to allot shares
Special resolutions 7 & 8 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 9 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)
111
ANNUAL REPORT AND ACCOUNTS 2022
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
01 February 2023 Announcement of 2022 Results
21 March 2023 Annual General Meeting
31 March 2023
Dividend Record Date
28 April 2023 Payment of Final 2022 Dividends
June 2023 Announcement of 2023 Interim Results
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Wynnstay Group PLC
Eagle House
Llansantffraid
Powys
SY22 6AQ
01691 828512
wynnstayplc.co.uk
Registered in Wales and England