NWF Group's Profits Tumble 75% Amid Fuels Struggle, Food & Feeds Show Resilience

NWF Group H1 2025: profits down sharply, Fuels drags while Food and Feeds deliver

NWF Group has posted a mixed first half for the six months to 30 November 2025. Group revenue slipped 4.3% to £434.6 million, and headline profit before tax fell 75.0% to £0.9 million, reflecting a tough trading period in Fuels. By contrast, Food and Feeds made solid progress, helped by restructuring benefits and steady demand.

Headline measures strip out exceptional items and amortisation of acquired intangibles to give a clearer view of underlying trading. The interim dividend is held at 1.0p per share.

Key numbers at a glance

Metric	H1 2025	H1 2024	Change
Revenue	£434.6m	£454.3m	(4.3)%
Headline operating profit	£3.0m	£5.0m	(40.0)%
Headline profit before tax	£0.9m	£3.6m	(75.0)%
Diluted headline EPS	1.6p	5.5p	(70.9)%
Interim dividend per share	1.0p	1.0p	Unchanged
Net cash (ex IFRS 16)	£0.8m	£11.4m	(93.0)%
Net debt (incl. leases)	£61.1m	£39.1m	+56.3%

Fuels division under pressure: weak demand and pricing squeeze

Fuels swung to a headline operating loss of £1.6 million (H1 2024: £1.7 million profit). Revenue declined 5.4% to £295.9 million as volumes and margins were hit by unusually low market demand. According to DESNZ, UK domestic heating oil volumes were 16% lower and commercial gas oil 6% lower year-on-year in the period.

Total volumes fell 2.4% to 323 million litres, but were 10.8% lower on a like-for-like basis (excluding acquisitions). Domestic heating oil was up 17.8% overall thanks to bolt-ons, but down 11.6% like-for-like; commercial volumes fell 5.9% (12.0% on a like-for-like basis). Brent averaged $67 per barrel versus $78 in H1 2024, with lower price volatility and stable supply.

Management rolled out a regional operating model nationally in July 2025, aiming to sharpen commercial focus and fleet efficiency. Two bolt-on acquisitions were completed in the North West – Noel Booth & Sons Limited (£2.3 million) and Harrison Oils Limited (£6.2 million including £3.0 million cash acquired) – with cost synergies targeted. Since the period end, colder weather has lifted domestic heating oil demand and margins, but the commercial market remains very competitive.

Why it matters

• Fuels is the swing factor for the group. A normal winter and better execution under the new operating model could stabilise profits in H2.
• Like-for-like volume declines underline the challenge. Acquisitions help scale and route density, but pricing discipline in a tight market is critical.

Food division gaining momentum: higher throughput, leaner cost base

Food delivered a headline operating profit of £3.3 million (H1 2024: £2.5 million) on revenue of £46.2 million, up 5.2%. The June 2025 cost base restructuring is flowing through, with increased stock levels and higher pallet throughput improving efficiency.

Storage volumes averaged 164,000 spaces, peaking just over 171,000 against capacity of 187,000 and an optimal level around 170,000. New contracts have been secured and the pipeline is building via a strengthened commercial function. The Board reckons the UK ambient grocery consolidation market is roughly £1.5 billion, with NWF’s share around 4-5%, and sees scope to build a national network of scale.

Why it matters

• Utilisation is nudging the optimal range, supporting margins if throughput is sustained.
• There is a genuine runway for growth if NWF can add sites and densify transport routes prudently.

Feeds stays solid: higher volumes and steady margins

Feeds posted a headline operating profit of £1.3 million (H1 2024: £0.8 million) on revenue of £92.5 million, down 5.2% due to lower commodity prices. Volumes rose 7.7% to 265,000 tonnes, with underlying volumes in line and the new moist feed line adding 15,000 tonnes. ADHB data showed the ruminant feed market up 7.9%.

Commodity prices were stable; the average milk price over the period was 5.7% higher than the comparative period and stood at 44.0p per litre at November end (H1 2024: 45.9p per litre). Stable input costs and supportive farm economics helped maintain feed usage.

Why it matters

• Feeds is behaving as intended – a steady cash generator with disciplined margin and cost control.
• Watch for any pressure if milk prices soften in H2, as flagged by management.

Cash flow, balance sheet and dividend: resilient operations, higher lease-driven debt

Operating cash generation was robust at £12.5 million (H1 2024: £10.8 million), with underlying cash conversion of 77% (H1 2024 re-stated: 116%). Net cash at period end, excluding IFRS 16 leases, was £0.8 million after £5.5 million of acquisition-related cash outflow.

Including lease liabilities, net debt stood at £61.1 million (H1 2024: £39.1 million). The increase since 31 May 2025 reflects new leases of £8.7 million, partly offset by £7.0 million of lease repayments and the £5.5 million net cash outflow. Banking facilities of £61.0 million are committed to May 2028, with substantial headroom noted.

The interim dividend is maintained at 1.0p per share, payable on 1 May 2026 to shareholders on the register on 21 March 2026. The Group highlights a 14-year track record of c.4% annual dividend growth.

Why it matters

• Cash generation looks healthy despite a weak H1 profit outcome, which is encouraging heading into a seasonally stronger H2.
• Lease-heavy balance sheet is part and parcel of warehousing and transport, but the step-up in IFRS 16 liabilities is notable. Facility headroom and disciplined capex remain important.
• Dividend discipline signals confidence, albeit prudently held flat at the interim stage.

Exceptional items and pensions: tailwinds this half

Net exceptional income was £0.6 million, primarily an insurance claim settlement of £1.2 million, partially offset by £0.5 million of acquisition costs and £0.1 million of ERP preliminary costs. These items are excluded from headline numbers.

The defined benefit pension moved from a £2.3 million deficit at 31 May 2025 to a £0.7 million surplus at the half year, aided by improved asset returns and contributions. The next triennial valuation is based on 31 December 2025.

Outlook: expectations unchanged into a more important H2

Trading since the period end is in line with the Board’s expectations. Domestic heating oil demand and margins have improved with colder weather, but commercial fuels remain highly competitive. Food is adding stock and sharpening operations, and Feeds volumes have been maintained even as milk prices may ease.

Full year expectations, amended in November, remain unchanged. The financial position is described as strong, with continued focus on organic initiatives and targeted bolt-on acquisitions.

What I’m watching next

• Fuels H2 recovery: pace of domestic demand normalisation, pricing discipline and benefits from the regional operating model.
• Food utilisation: average pallet spaces around the 170,000 optimal level, throughput gains and any steps towards a broader national network.
• Feeds resilience: volume stability if milk prices soften, and margin discipline with steady commodities.
• Cash and leverage: sustained cash conversion, trajectory of IFRS 16 lease liabilities, and headroom against the £61.0 million facilities.
• Integration of acquisitions: cost synergies in the North West and performance of the prior year bolt-ons.

Josh’s take: a tale of two halves, with H2 the decider

This is a classic NWF mid-year: weather and macro pinched Fuels, but the engine room in Food and Feeds kept turning. The Fuels loss is the headline problem, yet there are tangible levers – colder weather, a new operating model, and accretive bolt-ons – that can bend the curve in H2.

Food looks the standout with improved profitability and a sizeable market to go after. Feeds is dependable. Cash generation is better than the P&L might imply, the dividend is steady, and the pension has flipped to a surplus. The risk remains a stubbornly competitive commercial fuels market. If domestic demand stays firm through winter and Food stays near optimal utilisation, the unchanged full-year outlook looks achievable.