NWF Group, the Nantwich-based food, feed, and fuel distributor, announced that its trading in the first quarter, traditionally its quietest period, has met expectations. Meanwhile, Flowtech Fluidpower reported a decline in revenue and profit for the first half of the year.
Philip Acton, Chair of NWF Group, informed shareholders that the first quarter’s trading, commencing on 1 June 2024, has aligned with the board’s expectations. Despite the typically low activity during this period, the Fuels segment experienced slightly lower volumes than the previous year. However, margins improved due to effective cost management, with Brent crude oil prices fluctuating between $69 to $87 per barrel.
The Food business completed the fit-out of a new warehouse at Lymedale in June, beginning to increase storage levels as part of its investment plan. In the Feeds segment, volumes rose slightly due to wet weather in spring and early summer, with stable margins. The milk price remained steady during this period, further supporting the group’s performance.
Acton emphasised that with the busier winter months ahead, which significantly impact the group’s overall performance, the board’s outlook for the financial year remains positive. The group continues to target development opportunities, backed by a strong balance sheet, and plans to provide a further trading update in December 2024 after the half-year ends on 30 November.
Additionally, Acton expressed gratitude to stakeholders for their support during his tenure as Chair and extended his best wishes to Amanda Burton, who will be taking over leadership.
Flowtech Fluidpower, based in Skelmersdale, faced a challenging first half of the year with revenues dipping by 5.7% to £55.7 million compared to £59.1 million in H1 2023. Persistent market headwinds resulted in reduced revenue across all three geographical segments.
Despite these conditions, Flowtech Fluidpower was pleased with the acquisition of Thorite, expecting it to enhance revenues and margins by 2025. However, 2024 will see a negative impact on operating profits due to necessary cost base adjustments, margin improvements, and investments aimed at operational stability and future revenue growth.
Mike England, Chief Executive Officer of Flowtech Fluidpower, noted that despite difficult market conditions, the company has implemented cost control measures and improved service levels, leading to better gross margins. Yet, the further deterioration of the market has led to a significant reduction in expectations for the full-year results.
Analysts at Panmure Liberum endorsed Flowtech’s performance, recommending a BUY on shares, stating that while forecasts remain cautious, they believe the management’s EBITDA target is achievable in the medium term and view any share price weakness as a buying opportunity.
Both NWF Group and Flowtech Fluidpower are navigating their respective market challenges with strategic measures and a focus on future growth. NWF Group maintains a steady outlook, supported by its diversified business segments and a strong balance sheet, while Flowtech Fluidpower takes steps to stabilise and strengthen its operations despite short-term hurdles.