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Chief Executive's Review



Wynnstay’s strengths have been clearly demonstrated in what was an exceptionally difficult year for both the agricultural sector and wider society. Farmer confidence at the start of the financial year was low because of weaker farmgate prices and ongoing Brexit-related uncertainties. The highly disrupted autumn planting season in 2019 and the dry, late spring created further difficulties for arable farmers while, from March 2020, the coronavirus pandemic and government sanctions to control virus spread affected farmers across all sectors. Farmgate prices for red meat and milk were especially hit by the initial national lockdown, although they recovered during the year.

Wynnstay’s results for the full year are significantly better than our expectations at the time of the interim results following a stronger than anticipated second half of the year. Reduced revenue of £431.40m (2019: £490.60m) principally reflected commodity deflation and decreased volumes of traded commodities, especially grain, feed raw materials and fertiliser. Underlying pre-tax profit at £8.37m was 4% ahead of last year (2019: £8.01m), itself a difficult year for the sector, and we are pleased with this outcome given the circumstances.

The results were underpinned by our robust balance sheet and balanced business model, with its broad spread of products and services, which ensure that we are not unduly exposed to any particular sector. While a weaker performance from arable activities materialised as expected, feed sales performed very well, benefiting both our Divisions. The second half was especially strong for manufactured feed (bulk and bagged) in terms of both volume and gross margins, and we secured new business particularly in the dairy and free range egg sectors. Glasson Grain generated a solid performance, although below last year’s record level.

The Specialist Agricultural Merchanting Division delivered a 10% improvement in profit contribution, although sales of some product lines were adversely affected by initial lockdown restrictions. This was helped by the efficiency programme introduced during the last financial year, and which remains under way.

We continued to invest across the Group, and have now started a major three year investment programme at our Carmarthen feed mill. This will significantly increase our manufacturing capacity and improve productivity. We are also considering options for a new seed processing facility. This would replace our former plant at Selby, and in the meantime, we will be investing in our seed processing plant at Astley, in Shropshire to increase capacity and productivity.

Increasingly we are focusing on accelerating our environmental and sustainability agenda, addressing raw materials and products sourcing and carbon impact. We have made progress with utilising bio-diesel for our commercial delivery fleet, and will make further improvements across the business to reduce carbon emissions. In addition, we envisage playing a significant role in supporting our customers with environmental initiatives, which are a key focus of the new UK Agriculture Bill.

In the second half of the year, we substantially completed a significant reorganisation of our operational management, further information on which is provided below.


We completed a review of the Group’s core organisational structure and implemented a number of changes that will better support the Board’s plans for the Group’s future growth and development, including our investment programmes.

At the heart of the changes has been a reorganisation of the management of Wynnstay (Agricultural Supplies) Limited, where we have created new senior management roles. These cover Group Operations and Feeds, Arable including GrainLink, and Sales and Marketing. Reporting lines have been reorganised accordingly. We believe this new structure provides for enhanced effectiveness and sales agility. It also supports our multi-channel and environmental and sustainability strategies. I would like to thank Andrew Evans, who is now heading Group Operations and Feeds, for leading this important reorganisation.


Agriculture Division

The Agriculture Division manufactures and processes a wide range of agricultural inputs, including feeds, fertiliser and seeds, as well as providing grain-marketing services. Over recent years, the Division has focused on enhancing its offering through specialist advisory teams and this remains a focus.

Divisional revenue was 16% lower at £302.58m (2019: £358.69m), mainly reflecting lower commodity prices and the very poor winter planting season and dry spring, which reduced activity across certain product categories, especially grain, feed raw materials and merchanted fertiliser. The Division’s profit contribution reduced by 2% year-on-year to £2.88m (2019: £2.95m).

Feed Products

We manufacture both ruminant and monogastric products in compounded, blended and meal form. This wide range provides protection against fluctuations in demand. All our manufactured feed is sold under the Wynnstay brand, and in addition to bulk deliveries to farm, a growing percentage of our feed is sold in 20kg or 500kg bagged form, predominantly via our depot network.

Total feed volumes were in line with last year, and gross margins improved, helped by our strong positions in raw materials and production efficiencies.

Compound dairy feed volumes strengthened in the second half of the financial year after a weaker first half and matched last year’s level. This reflected the recovery in milk prices after lower demand in the early part of the financial year as a result of good on-farm forage stocks, the mild winter and a drop in demand for liquid milk from the hospitality sector during the coronavirus lockdown. We have also gained new customers following a successful campaign led by our dairy technical team.

Poultry feed sales for the free range egg market continued to grow, and we have further strengthened our specialist poultry team of advisors to drive expansion. Demand from the sheep feed market recovered from the previous year both for breeding sheep feed and lamb finishing rations as farmers chose to market their lambs earlier, in order both to take advantage of higher market prices and before a potential “no deal” Brexit.

We have continued to focus on the technical knowledge within our teams, and as well as strengthening our poultry team, we have strengthened our specialist teams in dairy, youngstock, beef and sheep. This will support our growth plans in these areas.

We started a significant expansion programme at our Carmarthen feed mill, although its commencement was delayed by the coronavirus pandemic. This major investment will be completed over the next three years. It will significantly increase our feed manufacturing capacity, improve efficiency and support better environmental practices.

Glasson Grain Limited

The Glasson Grain business, which is based at Glasson Dock near Lancaster, comprises three core activities, the supply of feed raw materials, the production and distribution of fertilisers, and the manufacture of added value animal feed products.

Glasson generated a solid performance, in line with management expectations although below last year’s outstanding performance.

The fertiliser blending operation manufactured record volumes, with all three sites contributing to this result. Margins came under some pressure as competitors reacted to lower demand, reflected in the 10% reduction in national usage. However, prices recovered in the second half and Glasson remains the second largest blended-fertiliser manufacturer in the UK. Feed raw material volumes were lower than last year, because of both the mild winter and an abundance of grass in the summer period. Our added value animal feed products performed well and although the coronavirus impacted sales to the wild bird market, we secured some additional markets.

The business is well placed for the current financial year.


Feed processing sites in Powys and Carmarthenshire, blending plant in Gwynedd, arable and seed processing site in Shropshire, raw materials and feed processing site in Lancashire, fertiliser processing sites at Lancashire, Angus and Yorkshire.


Arable Products

It has been a challenging year for our arable activities. This was caused by the exceptionally wet autumn of 2019, which drastically reduced farmers’ ability to sow winter cereal crops, and the dry spring that followed, which had a detrimental impact on yields. As a result, demand for fertiliser and other inputs reduced, traded grain volumes contracted, and there was decreased demand for seed in autumn 2020, given the significant carry-over of unsown seed from the prior year. Margins were also squeezed as suppliers chased reduced volumes.

The UK wheat harvest in 2020 was 37.5% lower than the 2019 harvest, the lowest production seen since 1981. While this, together with the reduced oilseed rape crop, dramatically impacted trading volumes for GrainLink, our specialist combinable crop marketing business, the business still made a profitable contribution to the Division’s performance. GrainLink is currently considering alternative protein crops to contract with growers. We have also moved grain traders to remote working and closed the Grantham trading office, so reducing costs. With a more normal autumn planting season in 2020, we expect a significantly improved performance from GrainLink in 2021.

Spring cereal seed sales were boosted by farmers turning to spring sowing after the exceptionally poor winter cereals seed planting season, and sales were up 40% on the previous year. With an estimated carryover of 30% of the 2019 purchased winter cereal seed, as expected, winter 2020 sales were down year-on-year. Margins were also affected by the necessity to purchase seed from third parties because yields of contracted seed were low. Grass seed sales performed above the previous year.

We decommissioned our seed plant in Selby when its lease came up for renewal in December 2020, and are now in the process of identifying a suitable site for a modern, new plant. We will continue to invest at our Astley seed processing plant and will be utilising facilities with collaborative partners in 2021.

National fertiliser usage contracted by approximately 10%, and our own merchanted sales was similarly affected. We have continued to focus on improving our market position, with our suitably qualified FACTS advisors offering expert advice covering all aspects of fertiliser usage. We have also launched a sales trading desk that will offer an additional route to market, complementing our specialist team at Astley.

Looking forward, strong market prices and the large acreage of autumn plantings give us confidence for a significantly improved arable performance in 2021.



The Specialist Agricultural Merchanting Division trades predominantly through a network of 54 depots but also via additional channels-to-market, including specialist catalogues for the dairy, poultry, beef and sheep sectors, and online. Youngs Animal Feeds is accounted for within this Division. It manufactures and distributes a wide range of equine products, which are sold in Wales and the Midlands through three dedicated outlets and a number of Wynnstay depots.

Divisional revenue was 2% lower at £128.81m (2019: £131.84m), although like-for-like revenue was just 1% down, with the year-on-year reductions mainly reflected the constrictions to trading at the onset of the first national coronavirus-related lockdown. The Division’s profit contribution increased by 10% to £5.78m (2019 £5.24m), helped by stronger sales in the second half and previous efficiency initiatives.

Wynnstay Depots and Youngs Animal Feeds

We are pleased with the performance of the depots during a year in which the challenges to normal operations were severe, and included temporary depot closures to the public, a switch over to an “order and collect” only service, and the establishment of a coronavirus-secure environment following Government guidelines to ensure the safety to our employees and customers. Many customers have continued to operate on an “order and collect” basis.

While the wet and mild winter period in the first half impacted sales of certain product categories, such as hardware materials and feed blocks, sales in the second half of the financial year closed strongly. Wynnstay-branded bagged feed sales were very good, helped by a vigorous marketing campaign in our trading area, as were sales of animal health products, milk replacers and fencing products.

Sales and profits at Youngs Animal Feeds were lower year-on-year, affected by the cancellation of horse events due to the coronavirus. However the popularity of our feed range remains high and the business retains a loyal customer base.

We continued with our network optimisation and efficiency programmes. In July, we closed the Wynnstay depot at Salisbury in Wiltshire, taking depot numbers to 54, and, in October, closed the Youngs Animal Feed outlet in Huyton in Merseyside, when its lease came up for renewal. Nonetheless, we were able to retain the majority of both customer bases.

Environmental Initiatives

We continue to push forward with sustainable sourcing and to evaluate the origin of all of our feed raw materials. We are pleased to report that soya within Wynnstay feed rations has moved entirely to sustainable sources.

As part of our strategy to reduce carbon emissions, the majority of our commercial delivery fleet now utilises fuel product with bio-diesel, and we are looking at adaptations to decrease fuel usage. We have also continued with the conversion of the composition of Wynnstay feed bags, which now include a minimum of 30% recyclable plastic. Our feed formulation specialists have introduced lower protein rations and are trialling methane inhibitors to reduce carbon emissions.

Llansantffraid Feed Mill has recently undergone its third annual ‘Green Dragon’ audit, after first gaining this accreditation in November 2018. We completed the audit and maintained our Level 3 accreditation, with no non-conformances. The accreditation is awarded to organisations that are taking action to understand, monitor and control their impacts on the environment.



Wynnstay has three joint venture companies, Bibby Agriculture Limited, Wyro Developments Limited and Total Angling Ltd and one associate company, Celtic Pride Limited. The three JVs performed well during the year and the combined profit contribution from the four businesses was higher year-on-year.


The past year has been exceptionally challenging for all our colleagues and I am extremely proud of their outstanding response during this time, and their commitment to the business. It has meant that we were able to maintain all our operations and provide customers with a continued high level of service. Colleagues have also shown great care regarding the health and welfare of fellow colleagues, customers and suppliers. I look forward to a successful year ahead.


The UK’s trade deal with the EU has introduced clarity and stability for UK farming and removed an obstacle that has been inhibiting farmer confidence and investment spending. The new UK Agricultural Bill maps out the support that the Government will provide to farmers post-Brexit, and 2021 marks the start of a seven year transition period that will see direct payments reduce and farmers incentivised for efficiency and environmental projects. The continued social and economic impacts of the coronavirus pandemic mean that uncertainties remain. However, we anticipate that farmers will adjust to the new world and invest in their businesses to improve efficiency and productivity while also addressing environmental issues.

Our commitment to the environment and sustainability, both through carbon footprint reduction and steps to source sustainable products and promote precision farming, will help support our customers. It will also ensure that we are playing our part to benefit both the local communities in which we live and work, and society more widely.

A major investment programme in our manufacturing facilities is now under way and will help advance our environmental goals as well as enhancing productivity and efficiency.

The operational reorganisation that we are in the process of completing supports our growth ambitions and in particular has created more focused sales channels. Progress with the development of our digital offering continues.

The new financial year has started well. Stronger farmgate prices towards the end of 2020, along with the EU settlement and UK Agricultural Bill, have helped to buoy sentiment across the farming sector. Wynnstay’s performance to date is in line with management expectations, and we believe that our strong financial position and balanced business model puts us in an excellent position to make good progress over the coming year and beyond.

We look to the future with confidence.

Gareth Davies
Chief Executive Officer
26 January 2021