Specialist agricultural and distribution business NWF Group plc (LON:NWF) said trading in the financial year just ended was in line with expectations.
In the Feeds division, profitability improved over the prior year in spite of continued challenging conditions in the dairy market, with further reductions in milk prices and volatility in key commodities, the company said.
The Food division remained at capacity throughout the year and delivered further improvements in operating efficiency and profitability.
The warm winter weather reduced demand for heating oil but the Fuels division nonetheless saw an increased in volumes.
The group's cash generation has remained strong during the year. Net debt is significantly lower than anticipated, in spite of completing three acquisitions and investing development capital during the year, the company revealed.
Shore Capital, which is predicting net debt of £14mln when the prelims are released, said it was a solid statement from NWF.
With the group trading on 11 times forecast earnings per share for the year just ended, the broker believes the shares are fairly valued at present until such time as there is further evidence of the cycle of deflation in output prices in the agriculture sector taking another spin.
“We note there are some preliminary signs of this at present in oil seeds, corn, barley and sugar for example. We also note dairy production in the UK also looks to be contracting at last too,” Shore’s Phil Carroll said.