NWF : Final results for the year ended 31 May 2017

1 August 2017

NWF Group plc ('NWF' or 'the Group'), the specialist agricultural and distribution business delivering feed, food and fuel across the UK, today announces its audited final results for the year ended 31 May 2017.

* Headline operating profit excludes exceptional items. Headline profit before taxation excludes exceptional items and the net finance cost in respect of the

Group's defined benefit pension and the taxation effect thereon where relevant. Statutory profit before taxation was £6.7 million (2016: £6.0 million).

• Revenue growth in all three divisions - reflecting acquisition contribution, higher activity levels and increased commodity prices in Feeds and Fuels

• Profit improvement - benefit of diversified operations and strong performances by Food and Fuels

• Record headline earnings per share

• Investment in strategic development:

  • £9.4 million capital expenditure, including £5.2 million invested in feed mill developments in the North and Cheshire

  • funded by strong cash generation and increased net debt

  • significant headroom for investment with net debt to EBITDA ratio of 1.0x

• Increased dividend - reflecting Board's confidence in the business

  Divisional highlights:
• Feeds - headline operating profit of £1.5 million (2016: £2.1 million). Good second half recovery, having been impacted by margin pressure due to increased commodity costs, particularly through the winter months. Volumes were robust and the mill developments in the North and Cheshire, completed during the year, have strengthened the operating platform.
• Food - headline operating profit of £3.0 million (2016: £2.7 million). A strong result built on efficiently delivering increased activity levels with the business operating at capacity throughout the year.
• Fuels - headline operating profit of £4.5 million (2016: £3.9 million). Strong volume growth across the depot network and the new depots in the South East exceeded expectations in their first full year.

"NWF delivered a solid performance last year with increased activity in all three divisions and the benefits of the diversified business model resulted in record earnings per share. The increase in profitability and strong cash generation also enabled the Group to continue its investment strategy, with major feed mill expansions completed in the year. We continue to see opportunity for further strategic and operational progress and our performance in the current financial year to date has been in line with our expectations."

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

Overview

In my last year as Chairman, I am pleased to report another robust performance for NWF and continued investment in the strategic development of the Group. Over the last ten years we have seen solid progress from the Group with revenue up from £361 million to £556 million, headline profit before tax from £4.0 million to £8.5 million, headline earnings per share up from 5.8p to a record 14.0p this year and dividend per share increased from 3.9p per share to 6.0p per share. Over the same period net debt has fallen from £52 million to

£13 million.

During the year, strong performances from Food and Fuels more than offset the challenging conditions experienced in the Feeds market. Food remained at full capacity, operated efficiently and delivered more loads whilst maintaining service levels at 99.7%. Fuels increased volumes significantly, more than offsetting the impact of the mild weather in the first half with growth across the depot network and the successful development of our cold starts in the South East. Feeds volumes were stable, with growth in line with the market but, with increasing commodity costs, margins were under pressure and the business was not able to fully pass on these increases during the year.

The capability of the Group to deliver sustainable growth whilst experiencing tough trading conditions due to its diversified operations has again been demonstrated. The continued ambition of the Group has been shown by the significant investment in the feed mills in the North and in Cheshire. Strong cash generation has allowed this investment in the year whilst maintaining a satisfactorily low level of net debt and a robust balance sheet position.

As a consequence of the good progress achieved and the Group's strong cash generation, the Board is recommending a final dividend of 5.0p per share (record date: 3 November 2017, payment date: 4 December 2017) (2016: 4.7p) giving a total dividend of 6.0p per share (2016: 5.7p), a 5.3% increase on the prior year.

Our business

NWF Group is a specialist agricultural and distribution business delivering feed, food and fuel across the UK. Each of our trading divisions has scale, good market position, are profitable and cash generative. Each division trades under different brands with their own brand architecture as follows:

• Feeds: NWF Agriculture, SC Feeds, New Breed and Jim Peet

• Food: Boughey

• Fuels: NWF Fuels (including a number of local sub-brands) Key areas of focus for the Board in 2017 were:

The Group has invested in significantly increasing the capacity and improving efficiency of the mill at Longtown in Cumbria, which was acquired with the Jim Peet business in 2016. In parallel the blending facility at Wardle has been automated which improves the production capacity for this growing segment of the market and increases efficiency. Both were completed during the year, albeit the Longtown facility was delayed by a few months and so incurred some additional exceptional costs in the year.

The Group has responded effectively to some challenging market conditions in the year. In Feeds the year started with low milk prices and whilst feed volumes recovered with milk price increases, the volatility in the commodity and foreign exchange markets led to significant cost increases, which the business endeavoured to pass on to the market. In Food, further efficiencies have been gained from ensuring loads are ready for dispatch ahead of time and improved backload revenue was delivered. In Fuels, in spite of a mild first half, the business has delivered increased volumes and improved margins on key product lines to offset the impact of lower demand for heating oil.

Cash generation remains a priority for the Group and a further sustainable improvement in working capital has been achieved in Feeds that has been managed sensitively at a time of recovery in the dairy market.

The consistent focus on excellence in customer service across the Group has been critical to our continued development. It has enabled volume gains to be achieved in each of the three divisions in the year.

Volatility in the commodity markets impacted the Group's performance in 2017. In Fuels, oil (which is purchased on the spot market) moved between $42 per barrel and $57 per barrel for Brent Crude with further volatility resulting from exchange rates. In line with market practice, Feeds buys its raw materials under forward purchase contracts. Significant increases in feed input commodities in the year impacted margins as price increases were implemented after cost inflation was experienced.

My thanks go to all who have supported NWF throughout the year both inside and outside the Group.

I am delighted that Philip Acton, Non-Executive Director, will be taking over from me as the Chairman of NWF Group, with effect from the AGM in September. Philip has extremely valuable experience in listed agricultural businesses and has gained a good understanding of NWF since joining the Board almost four years ago. In addition, as previously announced, Lorraine Clinton will join the Board in September and brings a strong operational and commercial background which adds complementary skills to the Board. Chris Belsham, Finance Director, joined the Board in April 2017 and this completes the transition process for the Board to whom I wish the best for the future.

Finally, I wish to pay tribute to the Executive team, many of whom have worked with me during the entire 11 years that I have chaired the Board. As a group, they have displayed that combination of commitment, hard work, vision, humanity and humour that has made my job rewarding and NWF successful.

I look forward to updating shareholders on the Group's continuing progress at the time of the Annual General Meeting on 28 September 2017.

Sir Mark Hudson KCVO Chairman

1 August 2017