Half Year Results

RNS Number : 0982G

Wynnstay Group PLC

26 June 2012

 



AIM: WYN

WYNNSTAY GROUP PLC

("Wynnstay" or "the Group")

Half Year Results

For the six months to 30 April 2012

Key Points

·      Encouraging H1 results - in line with management's expectations

·      Revenues up 18% to £193.67m (2011: £164.57m)

·      Operating profit up 14% to £4.75m (2011: £4.15m)

·      Profit before tax up 14% to £4.52m (2011: £3.97m)

·      Earnings per share up 14% to 20.34p (2011: 17.91p) 

·      Net assets up 9% to £54.64m (2011: £49.96m)

·      Interim dividend up 10% to 2.85p (2011: 2.60p) 

·      Agricultural division: revenues up 19% to £154.97m, reflecting

-       the benefits of expansion of arable activities, especially with addition of Wrekin Grain, May 2011

·      Specialist retailing: revenues up 12% to £38.68m

-       Wynnstay Stores: sales continue to be underpinned by high level of non-discretionary spend

-       Just for Pets: roll-out continues, with new store opened in February, bringing total to 20

·      Board believes Wynnstay is on track for further growth this financial year

-       long-term outlook for UK agricultural industry remains positive

Ken Greetham, Chief Executive, commented,

"After record annual results, Wynnstay has achieved encouraging half year figures, with agriculture and specialist retail activities both in line with the management's expectations. The Group's growth reflects the benefits of past acquisitions, most recently Wrekin Grain in May 2011 as well as continuing organic expansion. The pleasing performance from Wynnstay Stores is driven by ongoing high levels of non-discretionary spend by farmers, while our total number of Just for Pets stores has been increased to twenty in the period.

The diverse range of Wynnstay's activities continues to be a key strength and, coupled with a positive outlook for the UK agricultural sector, we remain positive that Wynnstay is well-placed for further growth this financial year with favourable prospects ahead."

Enquiries:

Wynnstay Group plc	Ken Greetham, Chief Executive Paul Roberts, Finance Director	T: 01691 828512
Biddicks	Katie Tzouliadis / Sophie McNulty	T: 020 3178 6378
WH Ireland Limited (Nomad)	Robin Gwyn	T: 0161 832 2174
Shore Capital (Joint Broker)	Stephane Auton / Edward Mansfield	T: 020 7408 4090

CHAIRMAN'S STATEMENT

INTRODUCTION

I am very pleased to report on Wynnstay's continuing progress in my first statement as Chairman since my election to the role in April this year.

After record annual results, the Group has delivered an encouraging trading performance for the first half of the new financial year.  Results from both our agricultural and specialist retail divisions were in line with management expectations although, as we previously commented, the expected deflation in agricultural commodity prices did not materialise and revenues are therefore higher than we originally anticipated. The expansion of our arable activities in the second half of 2011, particularly the acquisition of Wrekin Grain in May 2011 and subsequent launch of 'GrainLink', which included our existing grain marketing operations, helped to enhance Group revenue and profitability. Within the feed division, the increase in sales of poultry feed partly offset lower demand for ruminant feeds, due to the unseasonably mild winter. Nonetheless, while ruminant feed sales were below last year's peak, overall feed sales were higher than in 2010. Glasson, our raw materials trading operation, continues to perform well and made a good contribution to results. Sales at our Country Stores operation remain robust, supported by high levels of non-discretionary spend by our core farming customer base, and we opened our 20^th Just for Pets store in February, continuing our roll-out programme of this chain. 

As we have commented previously, the broad base of the Group's activities and our ongoing strategy to ensure that we build on our activities in a balanced way helps to smooth any volatility across particular markets.  This major strength has once again enabled us to deliver pleasing results. 

FINANCIAL RESULTS

Revenue for the six months to 30 April 2012 increased by 18% to £193.67m (2011: £164.57m) with approximately £23.8m of the increase being attributable to higher sales in the new GrainLink business following the acquisition of Wrekin Grain in May 2011. Our agricultural supplies division contributed sales of £154.97m (2011: £129.76m) while our specialist retailing operations contributed £38.68m (2011: £34.65m).   

Group operating profit improved by 14% to £4.75m (2011: £4.15m). Agricultural supplies contributed operating profits of £2.92m (2011: £2.23m), including a strong contribution from the new activities. Our specialist retail operations produced £2.00m (2011: £2.06m), with a good performance from Wynnstay Stores, which helped offset tougher conditions in the consumer-orientated Just for Pets business.

Net finance costs were £0.23m (2011: £0.18m), as a result of higher overall net debt levels due to the funding of last year's acquisition and the higher working capital utilisation resulting from the revenue increase.  Profit before tax increased to £4.52m (2011: £3.97m), a rise of 14%. Earnings per share grew by 14% to 20.34p (2011: 17.91p).

Net assets at 30 April 2012 increased by 9% to £54.64m (2011: £49.96m).  This represents approximately £3.29 per share (2011: £3.03 per share), based on the weighted average number of shares in issue during the period.

DIVIDEND

The Board is pleased to declare an interim dividend of 2.85p per share, which represents a rise of 9.6% on last year (2011: 2.60p).  The interim dividend will be paid on 31 October 2012 to shareholders on the register at the close of business on 28 September 2012.  As in previous years, a Scrip Dividend alternative will also be available. The last date for election for the scrip dividend will be 17 October 2012.

BOARD CHANGES

In April, we announced that John Davies who has chaired Wynnstay for the last 23 years had decided to relinquish his role to become a Non-executive Director ahead of his retirement from the Company at the AGM in March 2013. I was subsequently elected as Chairman and, at the same time, Non-executive Director, Jim McCarthy, took up the position of Vice Chairman.  

On behalf of the entire Board, I would like to reiterate our thanks to John for his considerable contribution to the business during his tenure.  He has played a significant part in Wynnstay's growth and has seen the Company establish itself as a major presence in UK agriculture.

REVIEW OF OPERATIONS

AGRICULTURE

Feed Products

The weather played a major role in setting demand for ruminant feed over the first half and the mild autumn we experienced in the period was in stark contrast to the harsh weather conditions we saw in the previous year.  As a result, there was an extended grazing period and lower levels of demand for ruminant feed. We also supply the monogastric feed market and here poultry feed volumes continued their steady increase, which helped to offset reduced ruminant feed volumes.  Overall, while there was a like-for-like decrease of 3% in feed sales compared to the same period in the prior year, which was in any case a strong year, sales still outperformed 2010 volumes. Importantly, overall margins were more acceptable across the division which resulted in an on-budget performance.

Glasson Grain

Results from Glasson Grain, our raw materials trading operation, were in line with our expectations and the business continues to make a very healthy contribution to the Group's performance.  Demand for raw materials came down from the buoyant levels of the prior year, with the feed industry utilising home-produced cereals at higher levels in feed rations. However the business benefited from strong demand for fertiliser following our steps to build wholesale customers beyond Glasson Grain's traditional core trading area.

Arable products

The arable market benefited from an increase in grain prices during the season and demand for seed, fertiliser and agrochemicals in the period has been encouraging.  Fertiliser volumes recovered during the spring, despite the higher prices, and volumes are in line with last year.  Cereal and herbage seed sales have increased and our seed operations are well placed for the forthcoming autumn season.  GrainLink, the enlarged grain trading business we established in May 2011 following the acquisition of Wrekin Grain, has performed very well.  It is now readily recognised as a major regional grain merchanting business with national presence which provides farmers with an efficient marketing channel for their grain.

SPECIALIST RETAIL

Wynnstay Stores

Wynnstay Stores have performed well, with like-for-like sales increasing by 3.7% (adjusted for commodity volatility) and sales growing by 8.8% overall.  Average margins were slightly reduced, partly as a result of inflation but also reflecting a change in product mix. In March 2012, we acquired a small fertiliser merchant at Llanfair Caereinion in Mid Wales. We will relocate our existing Wynnstay store to these premises during the next six months as part of the refurbishment programme. Post the period end, in May, we acquired PSB Country Supplies Limited, an independent agricultural merchant, based in Tetbury, Gloucestershire.  The move into Gloucestershire extends our geographic reach and, as part of our development plans, we will relocate the business to a larger store and extend the current offering.  We continue to search for new products to offer our core farming customer base and have had particular success in our solar energy projects, which have also proved attractive to retail customers.

Just for Pets

We continue to proceed with our store roll-out programme, opening a further outlet at Yardley, in the West Midlands, in February.  This takes the total number of Just for Pet stores to 20.  Total sales increased by 8.4% as a result of the store opening programme. However, as a result of increased promotion initiatives, which maintained sales, margins were affected and the overall result for the chain in the first half was lower than the comparative period last year. We expect an improved performance in the second half and remain focused on tight cost control. Our store roll-out plans remain in place and we plan to add a further new store this calendar year as the business continues to develop.

JOINT VENTURES

Trading at our associate and joint venture businesses during the first half was good overall.  As usual, the Group's share of results of audited accounts for the companies will be consolidated within the full year results.

OUTLOOK

The outlook for the UK agricultural industry is positive, with an increasing world population just one driving factor and Wynnstay is well placed to progress as a significant supplier of inputs to the industry. In the near term, as we commented in our annual report, dairy and livestock farmers are seeing pricing pressures mainly as a result of supermarkets' desire to supply customers with the basic essentials, including milk, at "value" levels.  Combined with the weak euro, this has seen farmgate prices for milk and meat reduce. However, by contrast, the arable sector remains buoyant and forward grain prices continue to be firm. Since we supply a wide range of agricultural inputs to both arable and livestock farmers, there is a natural hedging to our business and, with our strong balance sheet, we are well-placed to continue our growth strategy.  Looking over the remainder of the financial year, the Board believes that the Group is positioned to achieve its growth targets and views prospects positively.

Gareth Owen

Chairman

WYNNSTAY GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 April 2012

		Unaudited six months ended 30 April 2012	Unaudited six months ended 30 April 2011	Audited year ended 31 October 2011
	Note	£'000	£'000	£'000
Continuing operations
Revenue		193,666	164,570	346,176
Cost of sales		(169,526)	(142,516)	(303,672)
Gross profit		24,140	22,054	42,504
Distribution costs		(16,699)	(15,413)	(30,957)
Administrative expenses		(2,534)	(2,336)	(4,038)
Group operating profit before goodwill impairment and share based payment costs		4,907	4,305	7,509
Goodwill impairment and share based payments		(153)	(158)	(422)
Group operating profit		4,754	4,147	7,087
Interest income		38	31	72
Interest expense		(268)	(211)	(468)
Share of profits in associate and joint ventures	2	-	-	246
Share of tax incurred in associate and joint ventures		-	-	(85)
Profit before taxation		4,524	3,967	6,852
Taxation	4	(1,142)	(1,010)	(1,851)
Profit for the period		3,382	2,957	5,001
Earnings per 25p share	5	20.34p	17.91p	30.23p
Diluted earnings per 25p share	5	19.82p	17.49p	29.47p

WYNNSTAY GROUP PLC

CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 April 2012

		Unaudited as at 30 April 2012	Unaudited as at 30 April 2011	Audited as at 31 October 2011
	Note	£'000	£'000	£'000
Assets
Non-current assets
Goodwill		15,044	11,744	15,089
Property, plant and equipment		17,319	17,024	17,384
Investments		3,134	3,073	3,134
		35,497	31,841	35,607
Current assets
Inventories		28,378	19,966	23,687
Trade and other receivables		52,331	44,637	45,584
Assets held for resale	6	1,838	338	682
Financial assets - loans to joint ventures		3,252	3,493	3,493
Cash and cash equivalents		314	1,342	1,351
		86,113	69,776	74,797
Liabilities
Current liabilities
Financial liabilities - borrowings		(13,465)	(12,316)	(4,826)
Trade and other payables		(48,977)	(36,025)	(48,162)
Current tax liabilities		(1,573)	(1,404)	(2,002)
		(64,015)	(49,745)	(54,990)
Net current assets		22,098	20,031	19,807
Non-current liabilities
Financial liabilities - borrowings		(2,562)	(1,381)	(3,196)
Trade and other payables		-	-	(92)
Deferred tax liabilities		(343)	(461)	(372)
Government grants		(53)	(63)	(58)
		(2,958)	(1,905)	(3,718)
Net assets		54,637	49,967	51,696
Equity
Ordinary shares	7	4,177	4,145	4,154
Share premium		17,567	17,168	17,274
Other reserves		2,420	2,311	2,312
Retained earnings		30,473	26,343	27,956
Total equity		54,637	49,967	51,696

WYNNSTAY GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

		Share capital	Share premium	Other reserves	Retained earnings	Total equity
	Note	£'000	£'000	£'000	£'000	£'000
Balance at 1 November 2010		4,127	16,932	2,153	24,162	47,374
Net profit					2,957	2,957
Equity dividend paid					(776)	(776)
Shares issued		18	236			254
Adjustment in respect of share based payments				158		158
Total shareholders' equity at 30 April 2011		4,145	17,168	2,311	26,343	49,967
Net profit					2,044	2,044
Equity dividend paid					(431)	(431)
Shares issued		9	106			115
Adjustment in respect of share based payments				1		1
Balance at 31 October 2011		4,154	17,274	2,312	27,956	51,696
Net profit					3,382	3,382
Equity dividend paid	8				(865)	(865)
Shares issued	7	23	293			316
Adjustment in respect of share based payments	12			108		108
Total shareholders' equity at 30 April 2012		4,177	17,567	2,420	30,473	54,637

WYNNSTAY GROUP PLC

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 April 2012

		Unaudited six months ended 30 April 2012	Unaudited six months ended 30 April 2011	Audited year ended 31 October 2011
	Note	£'000	£'000	£'000
Cash flow from operating activities
Cash (used in) / generated from operations	11	(4,419)	(5,812)	5,452
Interest received		38	31	72
Interest paid		(268)	(211)	(468)
Tax paid		(1,600)	(620)	(1,339)
Net cash (used in) / generated from operating activities		(6,249)	(6,612)	3,717
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)		-	-	(2,599)
Proceeds on sale of property, plant and equipment		93	24	520
Reclassification of assets		-	229	0
Purchase of property, plant and equipment	11	(985)	(824)	(2,714)
Purchase of intangible assets		-	(289)	(288)
Investment in assets held for resale		(1,156)	(338)	(453)
Dividends from joint ventures		-	-	100
Net cash used by investing activities		(2,048)	(1,198)	(5,434)
Cash flows from financing activities
Net proceeds from the issue of ordinary share capital		316	254	369
Net proceeds from drawdown of new loans		1,000	-	4,030
Finance lease principal repayments		(345)	(379)	(689)
Repayments of borrowings		(860)	(860)	(1,808)
Dividends paid to shareholders		(865)	(776)	(1,207)
Net cash generated from financing activities		(754)	(1,761)	695
Net (decrease) in cash and cash equivalents		(9,051)	(9,571)	(1,022)
Cash and cash equivalents at beginning of period		(7)	1,015	1,015
Cash and cash equivalents at end of period		(9,058)	(8,556)	(7)

WYNNSTAY GROUP PLC

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.     Basis of preparation

The Interim Report was approved by the Board of Directors on 25 June 2012.

The condensed financial statements for the six months to the 30 April 2012 have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting except as disclosed in note 2.

The financial information for the Group for the year ended 31 October 2011 set out above is an extract from the published financial statements for that year which have been delivered to the Registrar of Companies. The auditors' report on those financial statements was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. The information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The financial information for the six months ended 30 April 2012 and for the six months ended 30 April 2011 is unaudited.

The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for year ended 31 October 2011, which have been prepared in accordance with IFRS.

The Directors have prepared the condensed consolidated interim financial statements on a going concern basis, having satisfied themselves from a review of internal budgets and forecasts and current banking facilities that the Group has adequate resources to continue in operational existence for the foreseeable future.

2.   Consolidation of share of results in joint ventures and associate

As the Group has a policy of using audited accounts for the consolidation of its share of the results of joint venture and associate activities, no such consolidation has occurred during the six months to 30 April 2012. Although this is not in accordance with IFRS the impact on the financial statements is not material.

Relevant results will be accounted for during the second half of the financial year.

3.     Significant accounting policies

The condensed financial statements have been prepared on an historical cost basis or fair value basis as appropriate.

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the preparing of the Group's financial statements for the year ended 31 October 2011. A copy of these financial statements is available from the Company's Registered Office at Eagle House, Llansantffraid, Powys SY22 6AQ.

The following accounting standards, amendments and interpretations are not yet effective and have not been adopted early by the Group:

International  Financial Reporting Standards ("IFRS")		Effective for accounting periods commencing on or after
IFRS 9: 'Financial instruments'		1 January 2015
IFRS 10: 'Consolidated financial statements		1 January 2013
IFRS 11: 'Joint arrangements'		1 January 2013
IFRS 12: 'Disclosure of interests in Other Entities'		1 January 2013
IFRS 13: 'Fair Value Measurement'		1 January 2013
IAS 27 (revised 2011): 'Separate financial statements'		1 January 2013
IAS 28 (revised 2011): 'Associates and joint ventures'		1 January 2013

Amendments to existing standards
Amendment to IFRS 1: 'First time adoption' on government grants		1 July 2013
Amendment to IFRS 7 on Financial instruments asset and liability offsetting		1 July 2013
Amendment to IAS 1: 'Presentation of financial statements' on OCI		1 July 2012
Amendment to IAS 12: 'Income taxes' on deferred tax		1 January 2012
Amendment to IAS 19 (revised 2011): 'Employee benefits'		1 January 2013
Amendment to IAS 32 on Financial instruments asset and liability offsetting		1 July 2014

From the 1 November 2011 the following standards, amendments and interpretations became effective and were adopted by the Group:

International Financial Reporting Standards ("IFRS")
IAS 24 (revised), 'Related party disclosure'		1 January 2011

Amendments to existing standards
Amendment to IFRS 1: 'Hyperinflation and fixed dates'		1 January 2011
Amendment to IFRS 7: 'Financial instruments: disclosures'		1 July 2011
Amendment to IFRIC 14: 'Pre-payments of a Minimum Funding Requirement'		1 July 2011
Annual improvement to IFRSs 2010		1 January 2011

The adoption of these standards, amendments and interpretations has not had a material effect on the net assets, results and disclosures of the Group.

4.     Taxation

The tax charge for the six months ended 30 April 2012 and 30 April 2011 is based on an apportionment of the estimated tax charge for the full year.

5.     Earnings per share

Earnings per share have been calculated based on the profit attributable to ordinary shareholders of £3,382,000 (six months ended 30 April 2011: profit of £2,957,000) and the weighted average number of shares in issue of 16,624,057 (2011: 16,508,502). Diluted earnings per share are based on the aggregate weighted average number of shares and all potential shares adjusted for their proposed issue price, of 17,067,913 (2011:  16,909,489).

6.     Assets held for resale

Assets held for resale relates to a freehold property currently undergoing redevelopment with a view to being sold within the next twelve months. Expenditure on the property during the period amounted to £1,156,000.

7.     Share capital

During the current period a total of 93,076 (2011: 72,717) shares were issued with an aggregate nominal value of £23,269 (2011: £18,179) fully paid up for equivalent cash of £316,332 (2011: £254,033). Included in these issues were 66,190 (2011: 72,717) shares allotted to shareholders exercising their rights to receive dividends under the Company's scrip dividend scheme and 19,453 shares (2011: £nil) allotted to relevant holders exercising options in the Company. A further 7,429 (2011: nil) shares with an equivalent cash value of £25,000 (2011: £nil) were allocated in lieu of a cash payment owed to certain parties. As at 30 April 2012 a total of 16,707,435 shares are in issue (2011: 16,580,817).

8.     Dividends

During the period ended 30 April 2012 an amount of £864,925 (2011: £775,866) was charged to reserves in respect of equity dividend paid. An interim dividend of 2.85p per share (2011: 2.60p) will be paid on 31 October 2012 to shareholders on the register on 28 September 2012. New elections to receive Scrip Dividends should be made in writing to the Company's Registrars before 17 October 2012.

9.     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 access 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 Agricultural Supply, Retail 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 segments, namely the United Kingdom.

The Board has assessed the movement in net assets within each operating segment and notes that there has been no material differences compared to the previous year.

Continuing operations

Agricultural Supply - Manufacturing and supply of animal feeds, fertiliser, seeds and associated agricultural products

Retail - Supplies of a wide range of specialist products to farmers, smallholders and pet owners

Other - Miscellaneous operations not classified as agriculture or retail

The Board assesses the performance of the operating segments based on a measure of operating profit. Finance income and costs are not included in the segmental 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. Inter-segmental transactions are entered into under the normal commercial terms and conditions that would be available to unrelated third parties.

The segment results for the period ended 30 April 2012 are as follows:

		Agricultural Supply	Retail	Other	Total
		£'000s	£'000s	£'000s	£'000s
Unaudited for the six months ended 30 April 2012:
Revenue		154,968	38,676	22	193,666
Segment result		2,923	2,002	(171)	4,754
Share of result of associate & joint ventures		-	-	-	-
		2,923	2,002	(171)	4,754
Interest income					38
Interest expense					(268)
Profit before tax					4,524
Taxation					(1,142)
Profit for the period attributable to shareholders					3,382
Unaudited for the six months ended 30 April 2011 :
Revenue		129,764	34,653	153	164,570
Segment result		2,232	2,061	(146)	4,147
Share of result of associate & joint ventures		-	-	-	-
		2,232	2,061	(146)	4,147
Interest income					31
Interest expense					(211)
Profit before tax					3,967
Taxation					(1,010)
Profit for the period attributable to shareholders					2,957
Audited for the year ended 31 October 2011 :
Revenue		274,571	71,318	287	346,176
Segment result		3,631	3,697	(241)	7,087
Share of result of associate & joint ventures		193	-	53	246
		3,824	3,697	(188)	7,333
Interest income					72
Interest expense					(468)
Profit before tax					6,937
Taxation					(1,936)
Profit for the year attributable to shareholders					5,001

10.  Business Combinations

On 16 March 2012, the Group completed the acquisition of C & M Transport Limited for a consideration of £150,000. The trading activities and assets of the acquired company have immediately been transferred to the parent company and as the assets are no longer distinguishable, the goodwill arising on the acquisition has been expensed in the period.

11.  Cash (used in) / generated from operations

		Unaudited six months  ended 30 April 2012	Unaudited  six months ended 30 April 2011	Audited  year ended 31 October 2011
		£'000s	£'000s	£'000s
Profit for the period		3,382	2,957	5,001
Adjustments for:
Taxation		1,142	1,010	1,851
Depreciation of tangible fixed assets		1,158	1,154	2,543
Impairment of other intangible fixed assets		45	-	263
Profit on disposal of property, plant and equipment		-	(19)	(228)
Interest expense		268	211	468
Interest income		(38)	(31)	(72)
Share of results of joint ventures and associate		-	-	(161)
Repayment of loans and (loans made) to joint ventures		241	(32)	(32)
Share based payment expenses		108	158	159
Changes in working capital (excluding effects of acquisitions and disposals of subsidiaries)
(Increase) in inventories		(4,691)	(1,972)	(5,693)
(Increase) in trade and other receivables		(6,747)	(8,636)	(4,834)
Increase / (decrease) in payables		713	(612)	6,187
Cash (used in) / generated from operations		(4,419)	(5,812)	5,452

During the six months to 30 April 2012, the Group purchased Property, plant and equipment of £1,175,171 (2011: £1,372,343) of which £190,202 (2011: £547,523) relates to assets acquired under finance leases.

12. Other reserves

Included in Other reserves are share-based payments: the group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of the grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.

The Group operates a number of share option and Save As You Earn schemes and fair value is measured by use of a recognised valuation model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

13. Group financial commitments

As at 30 April 2012, the Group's contingent liabilities in respect of bank guarantees for one of its joint ventures amount to £125,000 (2011: £125,000).

14. Capital commitments

As at the 30 April 2012 the Group had capital commitments as follows:

	Unaudited as at 30 April 2012	Unaudited as at 30 April 2011	Audited as at 31 October 2011
	£'000s	£'000s	£'000s
Contracts placed for future capital expenditure not provided in the financial statements	510	118	1,700

15. Related parties

Transactions between the Company and its subsidiaries, which are related parties have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures and associate are described below:

	Transaction value			Balance outstanding
	Six months ended 30 April 2012	Six months ended 30 April 2011	Year ended 31 October 2011	As at   30 April 2012	As at  30 April 2011	As at 31 October 2011
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Sales of goods to Joint ventures and associate	4,593	3,880	7,813	1,481	1,362	1,291
Purchases of goods from Joint ventures and associate	538	389	731	1,467	1,442	1,374
Interest receivable from Joint ventures and associate	-	-	72	-	-	-

Sales of goods to related parties were made at the Group's usual list prices, less average discounts. Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationship between parties.

16. Post Balance sheet events

Acquisition - On 31 May 2012 the Group completed the acquisition of the entire share capital of PSB (Country Supplies) Ltd, an independent agricultural inputs supplier based in Tetbury, Gloucestershire. Details of the trade, estimated asset values acquired and the provisional price paid are given below, together with the previous trading performance of the Company as reported in the latest available unaudited accounts of the business:

PSB (Country Supplies) Limited		Fair Value
Initial Fair value of acquisition		£'000s
Plant & equipment		35
Trade receivables		430
Inventories		215
Other current assets		5
Other current liabilities		(540)
Acquired debt		(95)
		50
Anticipated Goodwill		450
Total Consideration		500
Consideration transferred to gain control:
Cash paid on completion		350
Fair value of Contingent Consideration		150
		500

The final consideration to be paid is subject to confirmation of Net Assets and the financial performance of the acquired business in the period from acquisition to October 2014.

100% of the trade receivables are expected to be collected.
		£'000s
Revenue in year to 30 April 2011		2,896
Profit on ordinary activities before tax in year to 30 April 2011		95

Financial performance information for the extended period ending May 2012 for the acquired business is unavailable.

The acquisition of the business extends the Group's geographic trading area and farmer's customer base, as well as adding an additional outlet to the Group's Country Store chain.

In line with the sale and purchase agreement the maximum contingent consideration will be £150,000.

 

END

 

 

IR EELFLLQFFBBV