Supplier to the agriculture industry NWF (NWF:AIM) says conditions in the sector are tough as it reports falling revenue and flatlining profit numbers in a half-year update.
Revenue sank 9.1% in the six months ended 30 November because of lower pricing in its Fuels division but costs also declined.
Underlying operating profit was flat and underlying earnings per share improved 7.5% to 4.3p thanks to lower finance charges and cuts in the UK's corporation tax rate.
Shares in NWF trade 5.5% lower at 162p and have shed close to 20% since the turn of the year.
'NWF has achieved a solid performance in the first half of the year despite difficult market conditions,' says chief executive Richard Whiting.
'The Group made two acquisitions in Feeds and Fuels and was still able to report reduced debt as a result of its strong cash generative capabilities and effective working capital management. Current trading is in line with the board's full year expectations.'
Acquisition-related costs of £0.4 million are excluded from the headline earnings per share result of 4.3p, up from 4.0p in the same period last year.
Chairman Mark Hudson says low milk prices and a milder than average winter are putting pressure on NWF's Feeds and Fuels divisions. But its Food distribution business is performing well.
'In Feeds, our customers have seen no respite from low milk prices and we continue to work to provide technical input to optimise diets to help mitigate the tough conditions for dairy farmer,' Hudson says.
'In the Food division, we are operating close to capacity and look to improve efficiencies further whilst maintaining high levels of service.
'In Fuels the oil price has fallen further, which increases affordability for customers, albeit demand in December and January has reflected the mild weather.'