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Highlights

  • NWF expects FY25 headline profit before tax to be slightly ahead of market expectations.
  • The outperformance is partly attributed to reduced IFRS16 interest costs.
  • NWF completed the acquisition of Pinnock Brothers, adding 13 million litres to annual fuel volumes.

NWF Group plc (LSE:NWF), a UK-based specialist distributor operating in the fuels, food, and feeds sectors, has issued a trading update for the financial year ended 31 May 2025 and announced the acquisition of fuel distributor Pinnock Brothers. The Group anticipates headline operating profit and headline profit before tax to be marginally ahead of prior market forecasts, with contributions differing across its three divisions.

The outperformance was partly attributed to reduced IFRS16 interest costs, which arose from delays in planned fleet renewals caused by vehicle supplier constraints. These savings, however, are not expected to continue into FY26 as most new vehicles are now being delivered.

Fuels volumes for FY25 remained consistent with the previous year. While commercial fuel demand decreased, domestic heating oil volumes increased, particularly in the latter half of the year. Margin levels improved during this period, contributing positively to operating profit. Early benefits from a sales and logistics optimisation model piloted in North-West England are now being extended across the entire fuels network, with full implementation expected in the second quarter of FY26.

In line with its growth strategy, NWF acquired Pinnock Brothers (Thatcham and Kintbury) Limited in May 2025. The 13 million litre per annum domestic fuel distributor strengthens the company’s footprint in the South-East of England, enhancing coverage alongside existing operations in Oxfordshire and Hampshire. This follows the March 2025 acquisition of Northern Energy Oil, which expanded NWF’s presence in the North-East. Combined, the acquisitions contribute 55 million litres to the Group’s annual fuel volumes, representing an approximate 8% increase.

The food business underperformed expectations for the year, delivering reduced profitability due to lower-than-expected storage volumes and slower pallet throughput. Average storage volumes reached 156,000 pallet spaces (FY24: 137,000), but this fell short of internal targets. The 52,000-pallet Lymedale warehouse, operational since Q1, is currently underutilised due to slower-than-planned customer conversion.

In response, management implemented several corrective actions, including leadership changes and a restructuring programme designed to align the cost base with existing volume levels. The Group anticipates a return to previous run-rate profitability levels in the second half of FY26. Additionally, an internal investigation into a previously disclosed conflict of interest in the Food division has concluded. However, tax advisory work regarding IR35 payroll treatment remains ongoing.

Feed volumes were up on the prior year, supported by higher milk prices that encouraged producers to optimise yields. Margin management and participation in a government subsidy programme for energy-intensive industries further contributed to the improved performance. The company also reported stronger-than-expected demand for new moist feed product lines.

NWF ended FY25 with net cash of approximately GBP 6 million, down from GBP 10 million in FY24, following acquisition-related payments. The Group highlighted its effective working capital management and reiterated its ongoing acquisition strategy in core UK markets. Exceptional costs for the year are expected to range between GBP 2.5 million and GBP 3.0 million. These include transaction expenses related to acquisitions, restructuring charges, and costs associated with the Food division’s internal investigation.

NWF Group shares were trading 0.57% higher at GBX 174.99 as of 12 June 2025.