Interim Results

NWF Group PLC
02 February 2006



Embargoed until 07.01, Thursday 2 February 2006



                         NWF GROUP PLC INTERIM RESULTS

                   FOR THE SIX MONTHS ENDED 30 NOVEMBER 2005


NWF Group plc ('NWF'), the diversified sales and distribution business, today
announces interim results for the six months ended 30 November 2005.

Commenting on the results, Roy Willis, Chairman said: 'Both turnover and profit
before taxation have shown significant improvement compared to the previous half
year and the Group has traded in line with management's expectation during the
period with all four businesses ahead of the same period last year.'

Financial highlights (comparative figures for six months to 30 November 2004*):

   • Turnover increased by 23% to £134m (2004: £109m)
   • Profit on ordinary activities before taxation increased by 87% to £1.8m
     (2004: £1.0m)
   • Basic earnings per share increased by 117% to 15.2p (2004: 7.0p)
   • Interim dividend increased by 7% to 4.6p (2004: 4.3p)
   • Raised £5.7m through equity share placing in December
     *Comparatives above restated to reflect the adoption of FRS 17 and FRS 21


Divisional highlights:

   • Distribution: all three warehousing sites fully and profitably occupied
     throughout the six months; appointed a Primary Consolidation Centre for
     Somerfield in August; preparation for the £15m building programme at Wardle
     well in hand and expected to be completed by early 2007

   • Feeds: 45% volume increase in a competitive market, of which 30% came
     from expansion into the South West; established new blend plants at Ayr,
     Penrith and Exeter during the period

   • Fuels: turnover increased by 21% to £83 million on volumes up 9% to 145
     million litres; Broadland Fuels acquired in August

   • Garden Centres: benefits of new focus and contribution from 2004
     Victoria acquisition; operating result improved by 81%; acquisition of
     Woodford Park Garden Centre announced today

On the outlook for the coming months Roy Willis added: 'The Board joins me in
expressing confidence that the improvement in the Group's trading performance
achieved in the first six months will continue in the second half of the year
and beyond.'



For further information please visit www.nwf.co.uk or contact:

Graham Scott, Chief Executive                  John West
Paul Grundy, Finance Director                  Claire Melly
NWF Group plc                                  Tavistock Communications
Tel: [phone]                              Tel: [phone]



                              Chairman's Statement


I am delighted to report the interim results for NWF Group for the six months
ended 30 November 2005. Both turnover and profit before taxation have shown
significant improvement compared to the previous half year and the Group has
traded in line with management's expectation during the period with all four
businesses ahead of the same period last year.

Where applicable, comparatives referred to below have been restated to reflect
the two financial reporting standards which the Group has adopted for the first
time during this period, relating to pensions (FRS17) and dividends unapproved
at the balance sheet date (FRS21).

Profit before taxation of £1.8 million is a significant uplift from last year's
level of £1.0 million which was depressed by a number of non-recurring
restructuring items. The steps taken last year (notably the move into the
Deeside warehouse, the Country Stores disposal and the acquisitions of Victoria
Garden Centre and of JGW Thomas & Son Ltd) have laid the foundations for further
growth in the Group.

During the reporting period, we have strengthened the Group again in a number of
areas. The acquisitions of Broadland Fuels Ltd and Nutrition Express Ltd both
took place in August. Boughey Distribution was appointed as a Primary
Consolidation Centre by Somerfield Stores Ltd and new feed blending plants were
established at Ayr, Penrith and Exeter. We have also separately announced today
the acquisition of Woodford Park Garden Centre in south Manchester. In addition,
after the period end, shareholders approved the placing of 1,071,843 new shares
with a number of institutions to raise £5.7 million net of expenses in
conjunction with the funding of new warehouses at Wardle in 2006/07.


Results

Group turnover for the six months to 30 November 2005 increased by 23% from £109
million to £134 million. Operating profit increased to £2.4 million (2004: £1.7
million). Before goodwill amortisation of £0.2 million (2004: £0.1 million),
pre-tax profit was £2.1 million (2004: £1.1 million).

Basic earnings per share before goodwill amortisation were 17.9 pence (2004: 8.1
pence), basic earnings per share were 15.2 pence (2004: 7.0 pence) and diluted
earnings per share were 14.9 pence (2004: 6.8 pence).

The adoption of FRS17 and FRS21 has not had a material impact on the above
results, the divisional operating performances referred to below or the restated
comparative figures.


Dividend

The Board has maintained its progressive dividend policy by approving an interim
dividend per share of 4.6 pence (2004: 4.3 pence) which will be paid on 2 May
2006 to shareholders on the register on 31 March 2006. The shares will trade
ex-dividend on 29 March 2006.


Operations

The Distribution business saw operating profit increase by 32% from £708,000 to
£934,000 on turnover up by 24% to £14 million (2004: £11 million). All three
warehousing sites (Wardle, Deeside and Winsford) were fully and profitably
occupied throughout the six months. The division was appointed a Primary
Consolidation Centre for Somerfield Stores Ltd in August 2005. Preparation for
the £15 million building programme at Wardle, due to start in early summer 2006,
is well in hand and expected to be completed by early 2007.

Feeds saw a 45% volume increase in a competitive market, of which 30% came from
our expansion into the South West. Turnover rose by 40% from £22 million to £31
million while operating profit improved slightly from £691,000 to £716,000.
Firmer raw material prices by the end of the period dampened earlier progress on
margins and thus profits. The division established new blend plants at Ayr
(Scotland), Penrith (Cumbria) and Exeter (Devon) during the period.

Fuels operated against a backdrop of continuing high product prices, with
turnover increasing by 21% from £68 million to £83 million on a volume increase
of 9% to 145 million litres. Operating profit was £823,000 compared to £782,000
last time. All depots performed well with Broadland Fuels in East Anglia,
acquired in August 2005, having an immaterial effect on results during the
period.

Garden Centres benefited from a new focus on this activity and from the
contribution of Victoria Garden Centre, acquired in November 2004. Turnover was
£6 million (2004: £7 million, which included £2 million from the now
discontinued Country Stores operations). The operating loss of £83,000 showed a
significant turnround of 81% from a loss of £448,000 last year. Garden centres
are normally expected to make the majority of their profits in our second half
year. The Group has also separately announced the acquisition of Woodford Park
Garden Centre for an estimated total consideration of £1.95 million, including
stock of approximately £700,000, and has entered into a new 35 year property
lease with an initial annual rent of £600,000, reviewable every five years.
Woodford Park has been developed over the past decade and has grown to be one of
the UK's largest destination garden centres with unaudited turnover of £6.4
million for the year ending 31 January 2005. The total site measures 9.5 acres
and the garden centre has won a number of industry awards over the years. The
centre lies on the A5102, the major road running between Wilmslow and Stockport.


Board and prospects

I would like to restate my AGM announcements that I will be retiring after this
year's AGM to be succeeded by Mark Hudson, currently Deputy Chairman, and that
Graham Scott has agreed to extend his period of office as Chief Executive until
at least the end of 2007.

The Board joins me in expressing confidence that the improvement in the Group's
trading performance achieved in the first six months will continue in the second
half of the year and beyond.


Roy Willis
Chairman
2 February 2006



Group profit and loss account          Half year to  Half year to      Year to
Half year ended 30 November 2005        30 Nov 2005   30 Nov 2004  31 May 2005
                                       ---------------------------------------
                                              £'000         £'000        £'000
                                                         Restated     Restated

Turnover                                    133,616       108,565      235,648

                                          ------------------------------------
Operating costs before provisions release  (131,226)     (106,832)    (231,313)
Release of provisions no longer required          -             -        1,066
                                          ------------------------------------

Operating costs                            (131,226)     (106,832)    (230,247)
                                          ------------------------------------

Operating profit                              2,390         1,733        5,401

Exceptional item - loss on disposal of 
business:                                 ------------------------------------
Surplus over net tangible assets                  -           450          595
Less: goodwill previously written off             -          (780)        (780)
                                          ------------------------------------

                                                  -          (330)        (185)

Interest payable                               (485)         (326)        (850)

Other finance costs - FRS17                     (64)          (91)        (181)
                                          ------------------------------------

Profit on ordinary activities before 
taxation                                      1,841           986        4,185

Taxation                                       (625)         (429)      (1,312)
                                          ------------------------------------

Profit after taxation                         1,216           557        2,873

Dividends paid (note 5)                      (1,000)         (963)      (1,305)

                                          ------------------------------------
Profit/(loss) transferred to/(from) reserves    216          (406)       1,568
                                          ====================================


Earnings per share (note 1)
  Basic before goodwill amortisation           17.9p          8.1p        39.9p
  Basic                                        15.2p          7.0p        36.1p
  Diluted                                      14.9p          6.8p        35.0p

Proposed dividend per share                     4.6p          4.3p        16.7p


Summarised group balance sheet
At 30 November 2005                     30 Nov 2005   30 Nov 2004  31 May 2005
                                       ---------------------------------------
                                              £'000         £'000        £'000
                                                         Restated     Restated

Intangible assets                             8,199         5,187        7,300
Tangible assets                              23,858        22,483       23,591
Stocks                                        6,332         5,708        5,372
Debtors                                      37,979        28,745       29,843
Cash and bank balances                           54            36           36
Creditors: amounts falling due within 
one year                                    (38,587)      (31,295)     (27,537)
                                          ------------------------------------
Total assets less current liabilities         37,835       30,864       38,605
Creditors: amounts falling due after more 
than one year                                (13,821)      (9,157)     (15,012)
Provision for liabilities and charges           (813)        (902)        (837)
                                          ------------------------------------
Net assets excluding pension liability        23,201       20,805       22,756
Pension liability (note 5)                    (4,399)      (3,516)      (4,403)
                                          ------------------------------------
Net assets including pension liability        18,802       17,289       18,353
                                          ====================================
Total equity shareholders' funds              18,802       17,289       18,353



Reconciliation of movements in equity shareholders' funds
Half year ended 30 November 2005
                                        Half year to  Half year to     Year to
                                         30 Nov 2005   30 Nov 2004 31 May 2005
                                       ---------------------------------------
                                               £'000         £'000       £'000
                                                          Restated    Restated

Opening equity shareholders' funds as 
previously stated                             21,648        19,443      19,443
Prior year adjustment - FRS17 (note 5)        (4,283)       (3,469)     (3,469)
Prior year adjustment - FRS21 (note 5)           988           963         963
                                          ------------------------------------
Opening equity shareholders' funds as 
restated                                      18,353        16,937      16,937

Profit after taxation                          1,216           557       2,873
Dividends paid                                (1,000)         (963)     (1,305)
Share capital issued including premium           236             -           6
Goodwill resurrected on disposal of 
business                                           -           780         780
Actuarial loss on group pension scheme (note 5)    -             -      (1,341)
Taxation associated with group pension scheme     (3)          (22)        403

                                          ------------------------------------
Closing equity shareholders' funds            18,802        17,289      18,353
                                          ====================================



Summarised group cash flow statement
Half year ended 30 November 2005

                                        Half year to  Half year to     Year to
                                         30 Nov 2005   30 Nov 2004 31 May 2005
                                       ---------------------------------------
                                               £'000         £'000       £'000
                                                          Restated    Restated

Operating profit before provision releases     2,390         1,733       4,335
Release of provisions no longer required           -             -       1,066
Goodwill amortisation                            217            91         300
Depreciation charge                            1,447         1,210       2,515
Increase in working capital                   (2,104)       (3,033)     (5,160)
Other                                            (68)         (162)       (350)

                                          ------------------------------------
Operating cash inflow/(outflow)                1,882          (161)      2,706
Interest                                        (457)         (357)       (863)
Taxation                                        (752)         (834)     (1,519)
Dividends                                     (1,000)         (963)     (1,305)
Purchase of tangible fixed assets             (1,241)       (2,012)     (2,790)
Sale of tangible fixed assets                     32            72          98
Acquisitions including (cash)/bank 
overdraft acquired                              (916)       (3,061)     (5,272)
Disposal of business                               -         1,258       1,561
Deferred acquisition payments                 (1,030)         (400)       (400)

                                          ------------------------------------
Net cash outflow before financing             (3,482)       (6,458)     (7,784)
Term loan and HP finance movements              (311)         (529)     (2,361)
Medium term loan received                          -         3,000       9,000
Issue of ordinary share capital                  236             -           6

                                          ------------------------------------
Decrease in cash in the period                (3,557)       (3,987)     (1,139)
                                          ====================================

Reconciliation of net cash flow to movement in net debt
Half year ended 30 November 2005

                                        Half year to  Half year to     Year to
                                         30 Nov 2005   30 Nov 2004 31 May 2005
                                       ---------------------------------------
                                               £'000         £'000       £'000

Decrease in cash per cash flow statement      (3,557)       (3,987)     (1,139)
Cash outflow/(inflow) from decrease/
(increase) in HP and debt financing              311        (2,471)     (6,639)

                                          ------------------------------------
Change in net debt resulting from cash flows  (3,246)       (6,458)     (7,778)
HP and lease finance acquired with 
acquisition                                        -             -           -

Net debt brought forward                     (15,897)       (8,119)     (8,119)

                                          ------------------------------------
Net debt carried forward                     (19,143)      (14,577)    (15,897)
                                          ====================================


Analysis of net debt:

Cash and bank balances                            54            36          36
Overdrafts                                    (7,406)       (6,679)     (3,831)
HP and lease finance due within one year         (45)          (45)        (45)
Debt due within one year                        (600)         (787)       (600)
HP and lease finance due after one year          (46)         (102)        (57)
Debt due after one year                      (11,100)       (7,000)    (11,400)

                                          ------------------------------------
                                             (19,143)      (14,577)    (15,897)
                                          ====================================



Segmental analysis
Half year ended 30 November 2005
                                        Half year to  Half year to     Year to
                                         30 Nov 2005   30 Nov 2004 31 May 2005
                                       ---------------------------------------
                                               £'000         £'000       £'000
                                                          Restated    Restated

Turnover
Distribution                                  13,632        10,998      22,000
Feeds                                         30,809        22,036      53,090
Fuels                                         82,734        68,179     145,486
Garden centres                                 6,441         7,352      15,072
                                          ------------------------------------
                                             133,616       108,565     235,648
                                          ====================================

Operating profit
Distribution                                     934           708       1,197
Feeds                                            716           691       1,851
Fuels                                            823           782       2,633
Garden centres                                   (83)         (448)       (280)

                                          ------------------------------------
                                               2,390         1,733       5,401
                                          ====================================

Net operating assets
Distribution                                  11,806        11,336      12,150
Feeds                                         17,121         9,113      12,795
Fuels                                          5,761         6,876       8,391
Garden centres                                12,678        11,367      11,420

                                          ------------------------------------
                                              47,366        38,692      44,756
                                          ====================================



Notes:

1.  The calculation of basic earnings per share before goodwill amortisation
for the half year is based on profit after taxation and before goodwill
amortisation of £1,433,000 (2004: £648,000, as restated - see note 4) and on
8,025,568 (2004: 7,961,123) ordinary shares representing the weighted average
number of shares in issue during the period.

The calculation of basic earnings per share for the half year is based on profit
after taxation of £1,216,000 (2004: £557,000, as restated - see note 4) and on
8,025,568 (2004: 7,961,123) ordinary shares representing the weighted average
number of shares in issue during the period.

The calculation of diluted earnings per share for the half year is based on the
figures shown above amended for the weighted average dilutive effect (162,396
shares) of share options outstanding through the period (2004: 241,322 shares).


2.  The Group acquired Broadland Fuels Limited on 17 August 2005 for a
consideration of £0.7 million. The book value of net assets acquired amounted to
£0.2 million, resulting in provisional goodwill of £0.5 million. The results for
the period since acquisition are not material.


3.  The Group acquired Nutrition Express Limited on 19 August 2005 for a
consideration of £0.5 million, of which £0.2 million is deferred depending on
certain financial targets being met. The book value of net assets acquired
amounted to £nil, resulting in provisional goodwill of £0.5 million. The results
for the period since acquisition are not material.


4.  The figures for the half year ended 30 November 2005 and the comparative
figures for the half year ended 30 November 2004 are unaudited. The comparative
figures for the year ended 31 May 2005 are based on an abridged version of the
accounts for that year filed with the Registrar of Companies, on which an
unqualified audit opinion has been given, and then adjusted for certain changes
in accounting policies. Details of the changes in accounting policies are given
in notes 5 to 7 below.


5.  The above financial statements have been prepared on the basis of
accounting policies set out in the 2005 Annual Report and Accounts with the
following exceptions. For the financial year beginning on 1 June 2005, the Group
has adopted the new Financial Reporting Standard FRS21 ('Events after the
balance sheet date') and also implemented in full the requirements of FRS17
('Retirement benefits') where previously the Group had only adopted the required
transitional disclosure requirements. The comparative figures for the year ended
31 May 2005 and for the half year ended 30 November 2004 have been restated to
reflect the impact of these two standards (see notes 6 and 7).


6.  The adoption of FRS 21 has meant that the Group is no longer able to
recognise dividends approved after the balance sheet date as a liability within
the financial period to which they relate. As a consequence, the opening
reserves at 1 June 2005 have been increased by £988,000 (2004: £963,000) and the
profit transferred to reserves for the half years ended 30 November 2005 and 30
November 2004 have been reduced by £617,000 and £621,000 respectively. The
retained profit for the year ended 31 May 2005 has increased by £25,000.


7.  The full implementation of FRS 17 requires the deficit within the
Group's defined benefit pension scheme to be recognised on the balance sheet net
of the related deferred tax asset. As a result, the opening reserves at 1 June
2005 have been reduced by £4,283,000 (2004: £3,469,000). The impacts of full
implementation on the profit and loss accounts and on the total recognised gains
and losses for the half years ended 30 November 2005 and 30 November 2004 are
not material. The profit and loss effect for the year ended 31 May 2005 is a
decrease in operating costs of £349,000, an increase in other finance costs of
£181,000, an increase in taxation of £44,000 and therefore an increase in profit
after taxation of £124,000. The total recognised gains and losses for the year
ended 31 May 2005 have reduced by £938,000.


8.  Copies of the Interim Report will be sent to shareholders on 6 February
2006. Further copies may be obtained from the Company Secretary at NWF Group
plc, Wardle, Nantwich, Cheshire, CW5 6BP.



2006 Financial calendar

Interim dividend paid                                       2 May 2006
Financial year end                                         31 May 2006
Preliminary announcement of full year results              August 2006
Publication of Annual Report and Accounts               September 2006
Annual General Meeting                               26 September 2006
Final dividend paid                                    1 November 2006







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