TIDMNWF
RNS Number : 1669Z
NWF Group PLC
10 January 2024
For release 7.00am 10 January 2024
NWF Group plc
NWF Group plc: Acquisition of lease and Notice of Half Year
Results
Third warehouse marks further significant expansion of Food
division
NWF Group plc ('NWF' the 'Company' or the 'Group'), the
specialist distributor, is pleased to announce the signing of a
lease (the "Lease") between its subsidiary Boughey Distribution
Limited ("Food"), Aver Property General Partner Limited and Aver
Property Nominee Limited for a 332,000ft(2) warehouse at Lymedale
Business Park in Newcastle-under-Lyme ('Lymedale' or the
'Warehouse').
The investment follows on from the success of the Group's Crewe
240,000ft(2) warehouse, which opened in 2020, and is in line with
the Group's strategy for its Food business to target warehouse
expansion backed by customer and retailer demand . The Lease is for
a period of 15 years with a tenant only break clause after 12 years
and will be supported by a parental guarantee from the Group.
Highlights:
The newly constructed warehouse is conveniently located close to
the M6 and the Group's existing sites in Crewe and Wardle, allowing
the business to utilise its in-house expertise to bring the
Warehouse into operation.
The capacity of the Food division will increase by 52,000
pallets to a total of 187,000 pallets spaces, supporting strategic
growth and ongoing demand from its customers for ambient grocery
consolidation and distribution. The Group's capacity was 100,000
pallet spaces prior to the opening of the Crewe warehouse.
The fit out of the Warehouse will commence immediately and the
site is expected to be fully operational by the early Autumn of
this year, backed by an active pipeline of customer demand
supported by our high levels of service and customer
recommendations.
Financial guidance resulting from the additional warehouse:
-- In its first full financial year of operational activity, the
year ending 31 May 2026, Lymedale is expected to deliver additional
annualised operating profits of approximately GBP2.8 million. As a
result of IFRS16 interest in respect of the Warehouse lease and
associated additional leased vehicles, this will result in
incremental annualised headline PBT of approximately GBP1.2 million
in the financial year ending 31 May 2026 increasing to GBP2.5
million in the financial year ending 31 May 2035 as the IFRS16
lease liability reduces.
-- The balance sheet position of the Group will increase by a
right-of-use asset of GBP26.5 million and an associated lease
liability of GBP25.2 million.
-- The initial capital expenditure will be approximately GBP8.5
million, which will be funded using the Group's current cash
balance.
-- At this early stage in the project, the initial ramp-up costs
are expected to impact headline PBT in the current financial year
ending 31 May 2024 by approximately GBP1.7 million. The net impact
in the financial year ending 31 May 2025 is expected to be zero, as
ramp-up costs are offset by revenue, with a full run-rate of
profitability achieved during financial year ending May 2026 as
noted above.
-- Lymedale is expected to deliver an IRR of approximately 20%.
Chris Belsham, Chief Executive Designate of NWF Group said:
"We are delighted to start the new calendar year by announcing
the signing of the agreement to lease Lymedale. The addition of
52,000 pallet spaces in our Food business allows us to meet the
growing demand for our first-class services and will drive further
growth in line with our strategy for our Food business. Once
opened, we will have nearly doubled our capacity in Food over the
last five years and transformed the contribution of the business to
the Group's growth and profitability."
Announcement of Half Year Results
NWF Group plc will announce its half year results for the six
months ended 30 November 2023 on Wednesday 31st January 2024.
There will be a webcast and conference call for analysts at
9.30am start on the day of the results hosted by Chris Belsham,
Chief Executive Designate, and Katie Shortland, Chief Financial
Officer. Please contact MHP for further details at
nwf@mhpgroup.com.
Information for investors, including analyst consensus
forecasts, can be found on the Group's website at
www.nwf.co.uk.
Company compiled analyst consensus is for headline profit before
tax of GBP14.4m (FY 2023: GBP19.6m).
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014), as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018) ("MAR") prior
to its release as part of this announcement and is disclosed in
accordance with the Company's obligations under Article 17 of those
Regulations.
Richard Whiting, Chief Reg Hoare / Catherine
Executive Chapman Mike Bell / Ed Allsopp
Chris Belsham, Chief Executive
Designate / Christian Harte
Katie Shortland, Chief
Financial Officer
NWF Group plc MHP Peel Hunt LLP
(Nominated Adviser
nwf@mhpgroup.com and broker)
Tel: 01829 260 260 Tel: 020 3128 8100 Tel: 020 7418 8900
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END
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