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Food, feed and fuel specialist distributor NWF Group is on target to hit full year expectations despite a “more challenging” first half as pricing eased.

The listed logistics group said its overall profitability for the six months to 30 November was, as expected, down on last year year as conditions in the fuels and feeds markets continue to normalise following an extended period of volatile underlying commodity prices which had contributed to elevated returns.

However, its food disbutrion business is in part offsetting the less supportive market conditions in feeds and fuels, delivering a strong performance in the period and trading ahead of the prior year and continued growth momentum providing opportunity for further expansion.

It said its fuel volumes were ahead of the prior year, but margins reflect the expected normalisation from the abnormally elevated level experienced in the prior year.

The price of Brent crude oil started the Period at $74 per barrel, peaked at $97 per barrel and finished the Period at $82 per barrel as the business enters its busier winter months.

Its food business trading strongly, with storage volumes reached a peak of just over 141,000 pallet spaces (capacity 135,000 pallet spaces) which required the business to continue utilising overflow storage facilities.

Outload and associated backhaul activity were higher than the prior year reflecting the high storage levels, the group said.

To support the continued high level of customer demand for its services in food and drive further growth in the division, the group is well advanced with plans to establish a new warehouse, aimed at replicating the success of its Crewe warehouse which was opened in 2020.

On feeds, volumes were behind the prior year, reflecting a reduction in the overall market with high levels of forage available to farmers following warm and wet weather throughout the summer and autumn.

A lower milk price than the prior year and reduced volatility in raw material prices has resulted in the expected normalisation of margins following the significant outperformance in the prior year.

The overall results for the first half are anticipated to be in line with the board’s expectations.

With the winter months to come, which are typically more material to the group’s performance, the board’s expectations for headline profit before tax of £14.4m (down from £19.6m last year) for the full year are unchanged, with a more significant second half weighting than last year.

Chris Belsham, chief executive designate of NWF Group said: “It has been a more challenging first half than in recent years as market pricing normalised following a lengthy period of beneficial volatile conditions for Fuels and Feeds. In contrast, the strong performance of Food is encouraging us to advance our plans for a third warehouse to meet the growing customer demand for our first class services and drive further growth in the division.

“With the winter months to come, which are more material to the group’s performance, our expectations1 for the full year are unchanged.”

Morning update

Treatt, the manufacturer of ingredients for the beverage, flavour and fragrance industries, has announced the appointment of Alison Sleight as interim chief financial officer effective 1 January 2024.

She will report into the board although will not be appointed as a director of the Company.

This appointment follows the announcement on 20 October 2023 that Ryan Govender, the current CFO, will become Interim CEO from 1 January 2024, following Daemmon Reeves’s retirement as CEO from 31 December 2023.

The board is making “good progress” in its process to appoint a permanent CEO and an announcement will be made in due course.

Sleight joined Treatt at the beginning of 2019, as group financial controller, and is currently the group finance and IT director. A qualified Chartered Accountant, she started her career at KPMG and held a variety of senior finance roles within DS Smith group and music publishing prior to joining Treatt.

Vijay Thakrar, chair of Treatt, commented: “The Board is delighted that Alison is taking the role of Interim CFO to support the business when Ryan becomes interim CEO in January. With a proven track record in her current role and a detailed understanding of the operations at Treatt, Alison is well placed to be an effective and successful Interim CFO.”

On the markets this morning, the FTSE 100 is up 0.2% to 7,560.8pts.

Early risers include Ocado, up 1.3% to 649.4p, THG, up 1.5% to 83.7p and PZ Cussons, up 2.1% to 144p.

Fallers include Virgin Wines, down 6.5% to 36p, B&M European Value Retail, down 5.5% to 567.6p and Naked Wines, down 2.4% to 40p.

Yesterday in the City

The FTSE 100 closed yesterday flat at 7,542.8pts.

Fallers included THG, down 4.5% to 82.5p, Deliveroo, down 2.8% to 138.4p, Domino’s Pizza Group, down 2.8% to 382.8p, DS Smith, down 2.5% to 295.4p and FeverTree, down 2.4% to 1,045p.

The day’s risers included Glanbia, up 3.9% to €16.00, Naked Wines, up 3.4% to 41p, PayPoint, up 2.5% to 481p, Ocado, up 1.4% to 641.2p, Nichols, up 0.9% to 1,095p, WH Smith, up 0.8% to 1,322p and Just Eat, up 0.6% to 1,287p.