Wynnstay maintains profit despite revenue plunge

Agricultural supply group Wynnstay has reported only a slight drop in pre-tax profit despite plummeting revenues in a year dogged by the Covid-19 pandemic and a poor harvest.

Difficulties in trading through the pandemic were compounded by 2020’s historically low harvest, the Powys-based company said.

The combined effect meant total revenues for the year ending 31 October 2020 fell by almost £60m to £431.4m from £490.6m a year earlier.

See also: Covid-19 Q&A: Practical farming queries answered

Despite the fall, profits before tax for the 12 months were £6.98m compared with £7.55m for the same period in 2019.

Much of the revenue loss was in the firm’s agriculture division.

Revenues from agricultural activities fell to £302.6m in 2020 from £358.7m in the previous 12 months. Pre-tax profits in the division finished at £2.88m for the year against £2.95m in 2019.

Wynnstay suggested the decline was due to lower demand for arable inputs and reduced volumes of grain available for trading.

The wet autumn in 2019, followed by a dry spring, had reduced areas and yields from grain crops, which led to a 37.5% drop in the total grain crop – the lowest since 1981.

The lower crop area farmed also saw a 10% decline in demand for fertiliser, further reducing returns.

Mixed picture

Other goods bought by farmers and contractors through the company’s agricultural merchanting division were also down, contributing to a decline in revenues from £131.84m in 2019 to £128.81m.

However, store and office closures saw costs drop, with staff working remotely and sales via click-and-collect services only.

The reduced operating costs helped increase profits by 10% to £5.78m in 2020. 

Wynnstay chief executive Gareth Davies said the company had shown resilience in a turbulent year for agriculture and the wider public.

Looking ahead, Mr Davies said despite uncertainty over the Covid-19 pandemic, the new financial year had started well, with a Brexit deal in place that had buoyed sentiment across the farming sector.