Latest / The Business Case - with Mark Wharrier and Phil Clark / S2 - Episode 6: The Business Case: Interview with Alk Brand, CEO of Wynnstay Group PLC

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S2 - Episode 6: The Business Case: Interview with Alk Brand, CEO of Wynnstay Group PLC · The Business Case - with Mark Wharrier and Phil Clark

• 0:16
  SPEAKER_02: Welcome to the Business Case, in partnership with the Leading Investor Presentation Help Engage Investor.
• 0:22
  SPEAKER_02: This is the podcast where we dive deep into the stories behind the UK's leading companies.
• 0:27
  SPEAKER_02: I'm Mark Morrier.
• 0:29
  SPEAKER_00: And I'm Phil Clark.
• 0:30
  SPEAKER_00: And in each episode, we'll be sitting down with top business leaders to uncover their career journeys, the challenges they faced, and the insights that have shaped their success.
• 0:42
  SPEAKER_02: We will spend our careers analysing and investing in UK companies, meeting management to understand the business case.
• 0:50
  SPEAKER_02: And now we want to share those insights with you.
• 0:53
  SPEAKER_02: We will hear about the companies our guests lead and how they are positioned for the future.
• 0:58
  SPEAKER_00: But we also want to find out what makes these business leaders tick, the highs and the lows that they have experienced, and the lessons of management that might apply to your life.
• 1:10
  SPEAKER_02: Please remember that this podcast is not investment advice and is for informational and educational purposes only.
• 1:17
  SPEAKER_02: Well, it's a really interesting conversation with Alk Brand, the chief executive of Wednesday Group, which is a company you probably haven't heard of, but I'm pretty sure it's found a way into your life because it's one of the largest agricultural supply fertilizer seed businesses in the UK.
• 1:36
  SPEAKER_02: Alk joined the company 18 months ago, so it's a turnaround situation, but actually, as we will discover, uh there's a lot more to the business and a great deal of potential over the longer term.
• 1:46
  SPEAKER_02: Hope you enjoy.
• 1:54
  SPEAKER_02: Well, today we're delighted to welcome Alk Brand, Chief Executive of Winstay Group, the aim-listed agricultural supplies business that has been serving British farmers since 1917.
• 2:04
  SPEAKER_02: Alk joined Winstday in 2024, bringing with him a career-spanning senior leadership roles in agricultural supply chains across multiple continents.
• 2:14
  SPEAKER_02: Winstday is a company with a long heritage, and as we will hear, there is is going through much positive change to be fit for the future.
• 2:21
  SPEAKER_02: Alk, welcome to the Business Case Podcast.
• 2:24
  SPEAKER_01: Thank you very much.
• 2:26
  SPEAKER_02: Well, uh just for the for listeners who are unfamiliar with the group, um, could you give us a quick overview of Winstade?
• 2:32
  SPEAKER_01: Yeah, sure.
• 2:33
  SPEAKER_01: We our business, which is 180 years old this year, um, we're very proud of this heritage.
• 2:39
  SPEAKER_01: Um everything started uh in Wales.
• 2:42
  SPEAKER_01: Uh it started as a farming cooperative um many, many, many years ago.
• 2:47
  SPEAKER_01: And uh that's a space we're still in today, but today we're a national supplier of um high-quality nutritional products, arable products, and we've also got our retail stores um right for the country.
• 3:00
  SPEAKER_01: So um we're a sizable business in in the agri-space, um, and we're very proud to be part of a very important thing, and that is to secure uh food for the country.
• 3:10
  SPEAKER_01: Uh I personally am a uh uh a bit concerned about food security in the UK, so it's a good place to be in uh and to be part of a solution at the moment.
• 3:21
  unknown: Good.
• 3:22
  SPEAKER_02: Well, I'm sure we'll come back to that.
• 3:23
  SPEAKER_02: But yeah, sort of stepping back for a second, you grew up in a family farm in South Africa, and you've had a career that's taken you through international food and agricultural businesses.
• 3:34
  SPEAKER_02: What thread runs through all of it and specifically what really attracted you to Wednesday, which is a deeply regional UK agricultural business?
• 3:42
  SPEAKER_01: Yeah, so just a bit of correction there.
• 3:44
  SPEAKER_01: So my my grandfather on uh my mom's side, he was a sheep farmer in South Africa, and we spent holidays and and many weekends on his farm, and uh and my granddad always sort of took me everywhere, and I started having a love for agriculture.
• 4:00
  SPEAKER_01: My dad uh worked for a cooperative in in South Africa, so the farming thing was always part of my life.
• 4:07
  SPEAKER_01: And uh my grandfather was the only person with a bit of money in the family, and uh he made me a uh to promise him that I will never go in agriculture.
• 4:16
  SPEAKER_01: He said to me, You pay for my studies.
• 4:19
  SPEAKER_01: Uh he preferred me to be either a doctor or a vicar, um, and and said agriculture is the one thing you need to stay out of.
• 4:26
  SPEAKER_01: I always remember I asked him why, and he said it's only one thing when he thinks of agriculture, and that's poverty.
• 4:33
  SPEAKER_01: Um, so he said, please stay out of it.
• 4:35
  SPEAKER_01: And I just feel it's a calling.
• 4:37
  SPEAKER_01: Uh, I've always been in it, uh, I love it.
• 4:40
  SPEAKER_01: And um attracted to, I believe, uh the complexity of the supply chains.
• 4:47
  SPEAKER_01: I don't think there's any uh industry in the world where the people that actually work in it are exposed to so many risks, um, which is external risk, things outside their control.
• 4:58
  SPEAKER_01: Uh and you know, when you you buy something in a shop, um, I don't think the normal person realize the effort that actually goes in it to produce this food.
• 5:09
  SPEAKER_01: So um I believe that British farming um is just the best in the world, but and but I I'm sure we will talk about it later.
• 5:17
  SPEAKER_01: So I think that um the commonality in everything I've done is uh about the value system.
• 5:23
  SPEAKER_01: I I like to be part of something with a purpose um where people have strong values, and uh I was very proud to be associated with a few companies which um absolutely, including now Wednesday, um you know that that values of these companies were aligned to my own.
• 5:43
  SPEAKER_01: Um I like the clean industry, but I like the competitiveness um the environment uh of agriculture is quite competitive, but also the complexity and I like to improve things.
• 5:55
  SPEAKER_01: So every business which I've been part of um needed some sort of an improvement plan, and um probably that's the the big commonality between everything is supplying food, but but also to improve.
• 6:11
  SPEAKER_02: Well, you worked in a range of international businesses right across the world.
• 6:16
  SPEAKER_02: Uh Wednesday is a very different type of business, uh deeply embedded in rural Wales and Welsh marshes.
• 6:22
  SPEAKER_02: You know, what what surprised you most about Wednesday after you arrived?
• 6:27
  SPEAKER_01: You know, that's that's a very good question.
• 6:29
  SPEAKER_01: Um so one of the things which I told the board during the interview, and if you ask anybody who knows me, is the one thing I don't like is surprises.
• 6:39
  SPEAKER_01: So um I I made a point, and I have to say the board prepared me very, very well for the Wednesday role.
• 6:46
  SPEAKER_01: Um so I made a point to to really, really understand the business before I started, even.
• 6:52
  SPEAKER_01: Um, I spent a lot of time analysing everything, speaking to individual board members.
• 6:57
  SPEAKER_01: Uh you know, I spent a lot of time with Shore Capital, read investors' reports, um, studied for the financial results, had one-on-ones with the executive team.
• 7:07
  SPEAKER_01: So I would say that um it was no real surprise.
• 7:11
  SPEAKER_01: Oh my goodness, things are different different than what I thought.
• 7:14
  SPEAKER_01: I was very well prepared to to step into the role.
• 7:19
  SPEAKER_01: But if if I have to say some surprises positive, I mean it was uh amazing to see the talent in in Wednesday.
• 7:27
  SPEAKER_01: Um you know, we we've got people with 49, 48, 50 years, even.
• 7:33
  SPEAKER_01: Uh one of my colleagues, but the average um term of employment is easily over 20 years in the country, um all over the country.
• 7:43
  SPEAKER_01: And so it's a company where people like to stay.
• 7:46
  SPEAKER_01: Um so you know, that is a surprise.
• 7:48
  SPEAKER_01: And then to see the quality of talent everywhere in rural communities um was a very big surprise for me.
• 7:55
  SPEAKER_01: And then also the loyalty of our customers.
• 7:58
  SPEAKER_01: So we are you know, people are very, very, very loyal to Wednesday, and our farmers are very protective of the company and therefore also critical about if we do something wrong, they will point it out very quickly.
• 8:11
  SPEAKER_01: So um the loyalty from colleagues, um our customers, our suppliers, um, that was really you know uh a positive thing for me to experience.
• 8:22
  SPEAKER_01: I would say my expectation has been totally exceededly.
• 8:25
  SPEAKER_02: It's quite a positive foundation as a new chief executive committee.
• 8:29
  SPEAKER_01: Absolutely.
• 8:30
  SPEAKER_01: Yeah.
• 8:30
  SPEAKER_00: Absolutely.
• 8:31
  SPEAKER_00: Great.
• 8:31
  SPEAKER_00: Well, Alc, um thanks for that.
• 8:33
  SPEAKER_00: I I'm gonna just um almost take you back to that sort of almost that next step.
• 8:37
  SPEAKER_00: So you you you you were very well prepared with all of the uh the preparations that you did coming into this role.
• 8:46
  SPEAKER_00: But but when you joined Winst Day, it it had it had clearly been facing a very difficult few years, you know, revenues and profits down quite materially because of in part, you know, commodity price deflation, your fertilizer margin was under pressure, harvest had been poor.
• 9:01
  SPEAKER_00: As a new new chief exec, sort of what were those first hundred hundred days like for you?
• 9:05
  SPEAKER_00: What what what did you really focus on?
• 9:07
  SPEAKER_00: What was critical to get right at the beginning?
• 9:09
  SPEAKER_01: Yeah, you're right that um it it was quite a bumpy start.
• 9:12
  SPEAKER_01: Um I remember on my first day uh I had to do a profit warning um because of the results of the previous year.
• 9:21
  SPEAKER_01: I I started um literally the last month of my uh of the year in 24.
• 9:27
  SPEAKER_01: Um so you know it was quite a demanding uh beginning.
• 9:32
  SPEAKER_01: And I remember one of our shareholders um said to me, Listen, don't worry about it.
• 9:37
  SPEAKER_01: Um we we invest in a company for three reasons.
• 9:40
  SPEAKER_01: We look at companies with a strong balance sheet, I said, Oh, that's great.
• 9:44
  SPEAKER_01: And then we say with poor leadership teams um and underperforming um financial results.
• 9:51
  SPEAKER_01: So I said, okay.
• 9:52
  SPEAKER_01: So um I will take I will take the balance sheet as a positive.
• 9:57
  SPEAKER_01: Um and uh I mean it was clearly a burning platform to work from if you listen to to that type of remark.
• 10:05
  SPEAKER_01: And um but that's also sort of sort of a positive thing because there's no doubt that you have to focus on what I call the main thing.
• 10:14
  SPEAKER_01: Um and uh so it was clear to me that there's very specific things we can quickly address.
• 10:22
  SPEAKER_01: Um and it also was very clear to me that um a big, big group of our colleagues wanted that change and understood that it's needed, and therefore um probably the the easiest start is if you admit you've got a problem.
• 10:38
  SPEAKER_01: I think many companies will go in denial and um you know blame external reasons for for results, but we as a team just said no, we need to do better, and so that was a start.
• 10:49
  SPEAKER_01: So um I I spend a lot of time to answer your question uh with all my colleagues, uh big, big group of colleagues all over the business to understand their thoughts, um and uh typical stakeholder mapping, spend time with some some of our investors, um individual board members which have been the company a long time, um top 10 top 20 suppliers, um most of our major customers.
• 11:17
  SPEAKER_01: Um so it was quite um quick to to design a plan around that.
• 11:24
  SPEAKER_01: And um so in the beginning I was listening, talking, um, asking questions, open questions, um, and to find sort of what what the real triggers of uh success in this business should be, because that's what I believe you always have to spend time with.
• 11:40
  SPEAKER_01: So um I don't even think it's the first hundred days, it's probably the first two weeks, and we said we've got it, we know what to do, and now we just need to to nail it into a proper plan.
• 11:52
  SPEAKER_00: Great.
• 11:52
  SPEAKER_00: I mean, and uh I think uh when you were giving Mark your your your opening comments about sort of your career journey, you you've clearly done turnarounds before.
• 12:01
  SPEAKER_00: What what what's your sort of process in really kind of getting under the skin of a of a business that's in need of of change and transformation?
• 12:08
  SPEAKER_01: Well it's it's to really see what the the top three, four triggers for improvement are.
• 12:14
  SPEAKER_01: Um you know, there's there's normally a lot of things, but it's not necessarily gonna um change um the direction of a company fast enough.
• 12:23
  SPEAKER_01: Um so it was very clear in in this case with Wednesday what it was and and previously um when it's a bit more complex, we we you know considered using consultants like McKinsey and Bain and these people in my previous careers.
• 12:38
  SPEAKER_01: But in this case, uh it was so clear for us what to do that I felt that there's a desire from in inside the company, um, there's no denial.
• 12:48
  SPEAKER_01: Um so we just had to map up, okay, if we do the following three, four things, what what will it do to um key financial results in a business?
• 12:57
  SPEAKER_01: Uh and um so my process is not always the same.
• 13:01
  SPEAKER_01: It's not a you know generic toolkit.
• 13:03
  SPEAKER_01: No, you really cut it.
• 13:04
  SPEAKER_01: Yeah, you really have to look at it case by case.
• 13:08
  SPEAKER_01: For me, I it was just in my brain very clear what we needed to do, and it was more about execution.
• 13:14
  SPEAKER_00: And in terms of sort of what you look for when you're going into a turnaround and and what you found, how how did they how did those sort of map up to map together?
• 13:23
  SPEAKER_01: Yeah, they did um the the thing for with us was to understand first of all um why there's a lack of um results.
• 13:33
  SPEAKER_01: And it was clear to me that what you know often, strange enough, often what makes a company successful over time can become the opposite.
• 13:42
  SPEAKER_01: Um so after Wednesday got listed as a on on AIM as a PLC, you know, we got some capital and uh there was some aggressive acquisition process which were followed, um, which were fantastic, and many of these companies, most of them, um both great companies, which the company bought, and that helped us to grow our top line and profitability.
• 14:07
  SPEAKER_01: But um the the thinking of that time was to leave these companies alone and to do their own thing, which is okay if um if they have nothing in common.
• 14:15
  SPEAKER_01: But you know, it was in the agri space um, you know, with common customers.
• 14:20
  SPEAKER_01: So uh when I started, I discovered the selection of companies which all done their own thing.
• 14:26
  SPEAKER_01: And uh that's the exco team, the leadership team was mainly uh compliance people and not necessarily commercial people.
• 14:36
  SPEAKER_01: So for me, the common sense was how do you get all these commercial people in one room um to get the best out of all of them?
• 14:44
  SPEAKER_01: So um therefore we had to uh simplify the business.
• 14:48
  SPEAKER_01: And and the big thing for in in a turnaround is clarity, you need to to to supply everybody with very clear, simple stuff which is easy for everybody to to understand and remember.
• 15:00
  SPEAKER_01: Um so that was the second thing we've done.
• 15:03
  SPEAKER_01: Um and to put it in another another way, that's probably um, you know, you always have to ask certain questions, and that's but why, why do we need to change?
• 15:13
  SPEAKER_01: And um when we when we managed to articulate that reason, um it was repeating and repeating and repeating the same story, so everybody bought into that.
• 15:26
  SPEAKER_01: And uh, you know, you when if your colleagues start saying this language, telling you the same story, yeah.
• 15:30
  SPEAKER_01: And uh so um, you know, when we articulated why it's after that, it was the how how do we execute this strategy.
• 15:38
  SPEAKER_01: And uh I felt it was important that we just um don't say to each other, yes, we will try a bit harder to do this, or we will approve the RAVA and then people default back to their die jobs, um, which is tough.
• 15:53
  SPEAKER_01: And and we said no, it needs to sit in a formal process, a governance process.
• 15:58
  SPEAKER_01: Um, so we determined a rafter of things where we can improve and uh decided to scale it down to nine areas, which we called uh work streams, and each of these areas had quantifiable KPIs attached to it.
• 16:14
  SPEAKER_01: Um, each KPI had a number next to it.
• 16:17
  SPEAKER_01: Um, and we felt it needs to be something which is not long-term, so um it's a three-year plan, and I also believed we have to call it something.
• 16:26
  SPEAKER_01: Um, so we decided to call it Project Genesis, and it's really just to do something from the beginning.
• 16:32
  SPEAKER_01: Um and um last year was the first year of it, uh, and most of that year was sort of um designing this plan.
• 16:40
  SPEAKER_01: Uh and this year and next year we we will complete it.
• 16:44
  SPEAKER_01: Now the focus is very much on improvement, productivity, cost, um simplifying structures, you know, improving margin and so on.
• 16:54
  SPEAKER_01: But we we know that you can't do that forever, you have to grow your top line as well.
• 16:59
  SPEAKER_01: So um we now um took Project Genesis into a second stage, which is our strategy um plan to grow the business.
• 17:08
  SPEAKER_01: Um and um so that will now run in parallel with this.
• 17:12
  SPEAKER_01: But um this is where we are, and I feel we we're on track.
• 17:16
  SPEAKER_00: It's um there's a there's a lot for us to unpack there, and we'll come back.
• 17:19
  SPEAKER_00: We'll come back to several of those topics in a in a minute.
• 17:22
  SPEAKER_00: But um just an observation from my point of view.
• 17:25
  SPEAKER_00: Uh I think as an outsider, as an investor, you always investors are always underestimate how siloed a lot of businesses are, particularly if they've grown up through MA or not.
• 17:36
  SPEAKER_00: And you I think we we're guilty of assuming that there's always natural synergy and cross-functional working, and and it so many businesses don't have it.
• 17:44
  SPEAKER_00: Um I I it's almost it surprises me so much.
• 17:47
  SPEAKER_00: Anyway.
• 17:47
  SPEAKER_02: Yeah, well we'll we'll come to strategy genesis and the um the growth options that you have, but just sort of sticking with project genesis for a while.
• 17:57
  SPEAKER_02: I after at this point, I I feel I have to declare that I am a shareholder in Wednesday, which was and we thank you for that.
• 18:04
  SPEAKER_02: Which wasn't known before we organized um the podcast.
• 18:07
  SPEAKER_02: But I remember one of the things that attracted me to um the company was just the level of granularity and detail in that program, which is uh it's very unusual to see that uh in a company below 100 million marker cap.
• 18:22
  SPEAKER_02: Um so it's interesting to see you didn't rely on external consultants, this was something that was organic.
• 18:27
  SPEAKER_02: But you know, as you said, Project Genesis, a three-year transformation program focusing on operational efficiency, marginal improvement, cash generation, getting the company back to where it kind of should be as a as a base.
• 18:39
  SPEAKER_02: But you know, what specifically did you need to change about the way Wednesday operated and how it um, you know, you know, on a day-to-day basis, and and particularly thinking about how do you get that sort of cultural change, which is always really key in these programs?
• 18:54
  SPEAKER_01: Well listen, uh uh the only people which or the only thing which will make a difference is your colleagues, isn't it?
• 19:00
  SPEAKER_01: So um we we need to make it easier for people to do their jobs.
• 19:05
  SPEAKER_01: So um I'm a big, big believer in in proper governance and and compliance uh and um advocate for that as well.
• 19:14
  SPEAKER_01: However, if it becomes a bureaucracy where decisions get deferred or so our structure um was that uh there was several smaller companies within Wednesday and they all had their own subsidiary boards.
• 19:29
  SPEAKER_01: Um and it it it just made it too too slow to to perform.
• 19:35
  SPEAKER_01: So the first thing is we just dismantled that uh and um the the plc board gave us as executive team the authority to execute the the strategy and and um delegated that to myself and and to my team.
• 19:51
  SPEAKER_01: So that made it easy.
• 19:53
  SPEAKER_01: So second one is then to to surround yourself with people can to the have the will, experience, and knowledge to um to make these changes because that's not easy.
• 20:05
  SPEAKER_01: Um and you have to do it in a way where people are excited about it.
• 20:09
  SPEAKER_01: So um it took uh it took a special group of people to do that.
• 20:13
  SPEAKER_01: And then um, you know, we had to identify the reasons for some of the higher costs in the business and lower efficiency.
• 20:21
  SPEAKER_01: So a business like Wednesday is very um a fixed cost base, uh, and therefore uh it's important there's sort of um in a commodity business three big triggers.
• 20:33
  SPEAKER_01: One is volume, um, second one is margin, and the third one is your cost base.
• 20:38
  SPEAKER_01: So we we um we saw opportunity by putting stuff together just to get even more volume, and it wasn't a case of you know, one and one should give you two, we wanted to give three and more.
• 20:49
  SPEAKER_01: So give you one example.
• 20:52
  SPEAKER_01: Um in our trading division, we had three different companies.
• 20:56
  SPEAKER_01: We had a um we we have a company called Grindlink um in Wednesday, extremely competent leadership, very, very good team, well managed.
• 21:07
  SPEAKER_01: Then in Wednesday we had our own trading team as well, which bought um uh uh um you know um raw material for our milling business, but not necessarily from Grindlink, they bought it from even competitors, and then in Glassen we also had a trading team.
• 21:24
  SPEAKER_01: These people had literally nothing to do with each other and even competed with each other on farm.
• 21:30
  SPEAKER_01: Um and I just bought brought all of them in a room and they vaguely knew each other, but um but didn't see each other as colleagues.
• 21:39
  SPEAKER_01: Um they were absolutely defined in their own heads by their own corporate identity, either Wednesday or Glassen or Groenling.
• 21:50
  SPEAKER_01: And um we challenged that team and so listen um the the knowledge in the room because this is very smart people, very, very top, top quality smart people.
• 21:59
  SPEAKER_01: Um The ability to work together to learn from each other.
• 22:04
  SPEAKER_01: And in the beginning, nobody wanted to know about this.
• 22:07
  SPEAKER_01: And today, so we put these teams together late last year.
• 22:12
  SPEAKER_01: We designed a common business business information platform for them.
• 22:18
  SPEAKER_01: So they're using the same thing.
• 22:20
  SPEAKER_01: Today, I mean it's going so well.
• 22:23
  SPEAKER_01: And they enjoy each other's company and they're learning from each other and complement each other.
• 22:28
  SPEAKER_01: So that's just one example of bringing stuff together under one umbrella, which is positive.
• 22:34
  SPEAKER_01: So I can go on for a very long time.
• 22:37
  SPEAKER_01: We started just taking them off one by one by one.
• 22:41
  SPEAKER_01: And I think people are having fun at the moment.
• 22:44
  SPEAKER_01: That's also important.
• 22:46
  SPEAKER_01: During a turnaround, it shouldn't be this is a disaster.
• 22:49
  SPEAKER_01: It's not bad.
• 22:50
  SPEAKER_01: It's just a desire to do better.
• 22:52
  SPEAKER_01: Yes, there was pressure from my investors to do better, but it also has to come from inside, you know, to decide everything we do need to do is to serve our customers better.
• 23:04
  SPEAKER_01: What can we do to make it easier to do business?
• 23:07
  SPEAKER_01: And I think we well on our way to do so.
• 23:10
  SPEAKER_02: Yeah, it's about injecting people looking up rather than down and a bit of energy and optimism.
• 23:15
  SPEAKER_02: But it's interesting you said that you've sort of pivoted the leadership away from sort of compliance towards more commercial skills.
• 23:22
  SPEAKER_02: And you you know, one of the early shifts that you made was about pricing discipline and you know not chasing volume and being more disciplined about value customers are achieving.
• 23:33
  SPEAKER_02: But I suppose on the flip side of that is you've got long-term relationships with customers.
• 23:37
  SPEAKER_02: It's quite a difficult thing to balance.
• 23:39
  SPEAKER_02: Was that something that you had to do quite carefully and and and thoughtfully?
• 23:44
  SPEAKER_01: Uh yes.
• 23:44
  SPEAKER_01: Um, but it's about um making uh commercial people understand um their responsibility as well.
• 23:53
  SPEAKER_01: But um their success gets measured um against their own profitability.
• 24:00
  SPEAKER_01: So um so you you shouldn't read into that.
• 24:04
  SPEAKER_01: We we we took the authority away totally, but we make people aware of um the impact of their decisions.
• 24:10
  SPEAKER_01: And um our customers um I I think uh get the benefit of that because uh very clear uh about uh the options available and they they never get surprised by that.
• 24:23
  SPEAKER_01: So uh you know, we we need to to make people think that uh it's it's not only to I mean clearly we as I say volume is very important, but it's it's not the only thing you need to think like a businessman.
• 24:35
  SPEAKER_01: Our cost all our farmers are top-class businessmen anyway.
• 24:39
  SPEAKER_01: So uh I I just think that um accountability is incredibly important in leadership, and um uh we had to um make sure that everybody understands that.
• 24:50
  SPEAKER_02: Okay.
• 24:51
  SPEAKER_02: Well, before we talk about the the growth plan, let's just have a recap on what the business actually does.
• 24:56
  SPEAKER_02: Because you've got three broad areas feed and grain, which is about manufacturing um animal nutrition across the the mills and blending plans that you have.
• 25:05
  SPEAKER_02: Arable, which is about supplying fertilizer, seeds, and agrochemicals, and then you have the uh the stores network, 31 stores.
• 25:12
  SPEAKER_02: Maybe if we start with the stores, um you know it's a very competitive market, right?
• 25:17
  SPEAKER_02: You've got lots of uh not necessarily agricultural competitors but other retail competitors, you have online national chains.
• 25:24
  SPEAKER_02: What would you say is the the core competitive advantage of your store network?
• 25:28
  SPEAKER_01: So these stores are in rural communities.
• 25:31
  SPEAKER_01: Um it's uh it's a really important touch point for our farmers.
• 25:35
  SPEAKER_01: Um they like to go there.
• 25:37
  SPEAKER_01: Our stores are designed to be friendly to them, it's not overly shiny and they feel uncomfortable running in the between something on their farm.
• 25:47
  SPEAKER_01: Um but the important thing is that that's also the home of uh advisory service.
• 25:52
  SPEAKER_01: So um in in in in in a lot of uh livestock uh dairy uh as well as poultry and so on, uh there's a certain skill uh base available in our business to get the proper advice, um, which you can't do online.
• 26:08
  SPEAKER_01: And um so if we were just vlogging shoes and clothing or something like that, then I would have had a different opinion.
• 26:15
  SPEAKER_01: But our products which we sell through our stores are all aimed to help our farmers to improve uh the day-to-day well-being of a farm.
• 26:24
  SPEAKER_01: Um, yes, there is an element of we we also sell stuff to them which they may need while they go away, like pet food and and stuff like that.
• 26:32
  SPEAKER_01: But it's I think the uniqueness of it is um that it's it's backed um up by a clear need um for knowledge and and um and detail.
• 26:43
  SPEAKER_01: So uh all our stores, our colleagues are well trained to um to give high-level advice and they have products available really like a pharmacy for every application.
• 26:54
  SPEAKER_01: So we sell a lot of animal health products through our stores, animal nutritional products.
• 26:58
  SPEAKER_01: So this is not just basic commodities, right?
• 27:01
  SPEAKER_01: It's um stuff which you need to have a qualification for to sell.
• 27:06
  SPEAKER_01: So I think the uniqueness is in a rural community there's a place they can go to, um, which is this.
• 27:13
  SPEAKER_01: Um there's a relationship between the local store manager and colleagues in the store and our c and our farmers.
• 27:20
  SPEAKER_01: Um and it's a friendly place for them to go to, and and I think it's it's enjoyable uh for both our colleagues as well as our customers to and and I see that um as a very important part of our business and um uh area which we like to expand.
• 27:36
  SPEAKER_02: And and sort of longer term, um, you know, how do you think these stores could evolve?
• 27:40
  SPEAKER_02: And I suppose are there any sort of examples overseas of um you know what good looks like that you would want to apply to um to Wednesday?
• 27:48
  SPEAKER_01: Yeah, so I um was very blessed to to go to America.
• 27:51
  SPEAKER_01: There's a company called the Tractor Supply Company.
• 27:54
  SPEAKER_01: Um but you know, they are just the the scale is just enormous.
• 27:59
  SPEAKER_01: They've got over 3,000 stores.
• 28:01
  SPEAKER_01: But um the most important thing of this visit was um, you know, I went there to see how can we improve, and I came back and said, Oh, you know what, this there's slight tweaking we can do, but it's clear to me that we're doing a pretty good job in our stores.
• 28:16
  SPEAKER_01: And the UK is clearly different to the US in terms of if you say rural community, there's always still a big place within an hour or so from it.
• 28:25
  SPEAKER_01: Where in America clearly um if you say rural community, uh there's a there's a big distance to travel um from one place to another.
• 28:33
  SPEAKER_01: Um so that's the the slight difference.
• 28:36
  SPEAKER_01: But um I I came back and said, you know what, there's a number of things I picked up which we can probably do better, but we've got a pretty good business model here.
• 28:46
  SPEAKER_01: And um so um I'm determined to to grow our online um and to use technology more in our stores, and uh that's already in the planning.
• 28:57
  SPEAKER_01: But um these not big things we have to change.
• 29:00
  SPEAKER_01: Yeah, okay.
• 29:01
  SPEAKER_02: And and taking the other two divisions, uh Arabal, in terms of uh something like fertilizer blending, is is that quite a commoditized business and is it difficult to differentiate?
• 29:11
  SPEAKER_01: No, I don't think so.
• 29:12
  SPEAKER_01: Actually, the whole idea of blending is that um you can blend very specific um uh formulations for the need of a very specific specific farmer.
• 29:23
  SPEAKER_01: And the two of you, if you have farms next to each other, the soil can actually be totally different.
• 29:28
  SPEAKER_01: So um it all starts with a proper soil analysis, agronomy advice, um, and then you take from the um the need.
• 29:37
  SPEAKER_01: Uh so it it's not a generic thing, it is really fit for purpose to help to improve soil health.
• 29:43
  SPEAKER_01: And um, so I I I think there's much more value to it than um most people think.
• 29:49
  SPEAKER_01: Uh I I I really believe that um we are very, very, very well invested in that business, and uh that's why we also made another investment last year in Avonmouth in Bristol, which uh a new new opportunity to help us to to grow that business.
• 30:04
  SPEAKER_01: So I personally um see um a long-term investment in in fertilizer.
• 30:11
  SPEAKER_01: Clearly, um the sustainability part of that is also important, and um, you know, we um we we stay close to people who can advise us on that, including the International Fertilizer Association.
• 30:24
  SPEAKER_01: But um it's a very important part of our business.
• 30:27
  SPEAKER_02: Okay.
• 30:27
  SPEAKER_02: And finally, feed feed and grain, which is the the biggest component of the group, um, also probably the most cyclical, um, returns are very low at the moment, about two and a half percent.
• 30:38
  SPEAKER_02: Yes.
• 30:38
  SPEAKER_02: You have a group target of of 10%.
• 30:41
  SPEAKER_02: Yep.
• 30:41
  SPEAKER_02: Um, you know, how do you think there's obviously a lot of restructuring taking place at the moment, but how do you think of the returns within that business?
• 30:47
  SPEAKER_02: You know, obviously it's going to be volatile, but is there a sort of through-the-cycle level of profitability you think it's capable of?
• 30:53
  SPEAKER_01: No, absolutely.
• 30:54
  SPEAKER_01: And um just to to remind um back to Project Genesis, that um you know a very busy period in the UK for animal feed is obviously in the winter.
• 31:05
  SPEAKER_01: So um uh November, December, January, February is key months.
• 31:09
  SPEAKER_01: So when I started, um Project Genesis wasn't um designed by then, it only started after winter.
• 31:15
  SPEAKER_01: So our first year of the results, which is what you refer to, um didn't take into account any improvement.
• 31:23
  SPEAKER_01: And since then we we spent you know significant amounts of money in our manufacturing plant to address bottlenecks.
• 31:30
  SPEAKER_01: Um, you know, just one example in our Carmarthan mill, Carmarthan is in in South Wales.
• 31:36
  SPEAKER_01: Um that that specific mill um didn't receive uh required investments, I think it needed.
• 31:44
  SPEAKER_01: Just by spending a bit of CapEx V, um, we unlocked nearly 20,000 tons of capacity um just by stopping all these breakdowns and stuff like that.
• 31:53
  SPEAKER_01: So not only did we um benefit commercially from this extra capacity, but our team is motivated now because they probably felt that um it was long overdue.
• 32:04
  SPEAKER_01: Um so one by one by one we we fixed it.
• 32:08
  SPEAKER_01: Now we've got incredibly strong assets in our feed milling.
• 32:11
  SPEAKER_01: Uh all our anchor sites, um we've got two really large mills, um, feed mills, and then three blending plants.
• 32:19
  SPEAKER_01: They are fully invested now.
• 32:21
  SPEAKER_01: And um so I I think we can reap rewards.
• 32:24
  SPEAKER_01: But I go back to say these three key elements.
• 32:27
  SPEAKER_01: Um it's it's our cost base in that business, it's the margin in that business, and the volume in that business.
• 32:33
  SPEAKER_01: So now we've created the capacity to put more volume through.
• 32:37
  SPEAKER_01: Cost is fixed.
• 32:38
  SPEAKER_01: Um you know, the waste of small things um gets um tied up in project genesis, so we will see the benefit in that in margin.
• 32:48
  SPEAKER_01: We also try to simplify the number of products we make in the business that allow the mills to run longer runs.
• 32:56
  SPEAKER_01: Um over time uh we gather just too many individual products which we make, which uh most of it have something common in it, so um just to reduce that, so that will help our margin as well.
• 33:09
  SPEAKER_01: And then um I think that uh this whole productivity side, which we will see again, will help us to get the higher returns in that business.
• 33:18
  SPEAKER_01: Saying that it's not easy to get uh volume because there's lots of competitors out there, so we just have to work hard for it and come up with something innovative and probably unique.
• 33:29
  SPEAKER_01: That's what we're also moving to is products at a bit of higher margin, but with different benefits.
• 33:37
  SPEAKER_00: Okay.
• 33:38
  SPEAKER_00: Well, maybe uh trying to draw some of that together, Alc.
• 33:40
  SPEAKER_00: I mean, uh as Mark said, you you've moved, or sorry, as you said, you've moved from project genesis to strategy genesis.
• 33:47
  SPEAKER_00: Uh you've stabilised the the platform, you've restructured the operating model uh you know in the first uh two years of your your tenure.
• 33:56
  SPEAKER_00: Focus now switched to the five-year plan, which is around growth, around innovation, long-term value creation, so um definite change of gears.
• 34:06
  SPEAKER_00: Before we get into the detail, I'd just be curious on how you think about the capability that sits within the business and the and the sort of leadership team, because you could you could argue that there's a very different skill set required from uh to restructure a business to actually then pivot to growth.
• 34:22
  SPEAKER_00: How do you think about capability that sits within Winston?
• 34:25
  SPEAKER_01: Oh, I think that it's uh phenomenal a talent in our business.
• 34:29
  SPEAKER_01: Um people of incredible um experience and knowledge.
• 34:34
  SPEAKER_01: Um, and their success probably was a bit deferred by the fact that um from an operational side it was challenges which I believe has now been sorted out.
• 34:43
  SPEAKER_01: Yeah.
• 34:44
  SPEAKER_01: And um it's now up to them to take the accountability and run with the opportunity.
• 34:49
  SPEAKER_01: And I I've got uh absolute big faith in the team.
• 34:54
  SPEAKER_01: Um, you know, this is a team which sponsor both the weight, um, very experienced, knowledgeable, and passionate.
• 35:01
  SPEAKER_01: And um, so I think that we've got all the talent needed.
• 35:05
  SPEAKER_01: Saying that, um, we also spend a lot of time on leadership development in the business.
• 35:09
  SPEAKER_01: Um, we invest um a lot of time and money in in making sure our leaders are equipped to make decisions.
• 35:15
  SPEAKER_01: I mean leaders on every level, even people with one or two people reporting into them uh gets trained.
• 35:23
  SPEAKER_01: And um we um we we on the 11th of May we've got a leadership forum for about 140 people in our business, making sure we equip these people to make the right decisions and to enjoy what we're doing and understand the opportunities they may have.
• 35:39
  SPEAKER_01: So, you know, I think we've got a great team, and from executive team, uh my team to to um to our stores and anything in between, uh, we've got the talent to do well and um bear in mind a lot of these people sit in very, very rural rural areas um and but but they want to be there, so we we're lucky to have them.
• 36:00
  SPEAKER_00: Very good.
• 36:01
  SPEAKER_00: Um and and thinking about the the the growth opportunity and the organic growth potential for Wednesday over the you know, you set out a clear plan over the next five years.
• 36:10
  SPEAKER_00: W which are the parts of the business that you think are most underexploited relative to their potential?
• 36:15
  SPEAKER_01: I really believe that every one of our reporting areas are scalable from our feed milling, which now have lots of more capacity available, our our grain trading division, um which now have the tools to work together as one team, um, our fertilizer business, which we've invested in and will continue to invest, our seed plants, which had investments in it as well, plus um our store development.
• 36:42
  SPEAKER_01: Saying that, um we also work with um uh just so much money, we can only spend so much money.
• 36:50
  SPEAKER_01: So um we're very strict in our capital allocation, and um it's actually a pleasure now because I like like most businesses, uh we have more requests for capital than what what we want to spend.
• 37:03
  SPEAKER_01: And uh now it's actually whoever brings the best plan to the table, um it will go through a proper evaluation and then we'll pick the one, but we can pick any of these three areas.
• 37:14
  SPEAKER_01: Um it's just the best plan will win.
• 37:17
  SPEAKER_01: And um, so I really believe all three areas are scalable.
• 37:21
  SPEAKER_00: You uh you maybe chuckle because uh a couple of my clients I work with, they they always talk about the CEO loves having a long list of long queue of people outside their door begg begging for capital.
• 37:32
  SPEAKER_00: I agree.
• 37:32
  SPEAKER_00: But switch, I mean, switching to thinking about capital intensity of your businesses, I mean, all three businesses are relatively capital intensive.
• 37:40
  SPEAKER_00: You you know, you've got a dozen or so manufacturing sites, you've got the 50 stores that you talked about.
• 37:45
  SPEAKER_00: Generally, you know, return on capital employees being below cost of capital or you're you're you're you're on the cusp of of broadly neutral, but you are targeting double-digit return on capital, I think, now.
• 37:57
  SPEAKER_00: What what are what are the real critical drivers for you to sort of get to that sustainable ro see being better than whack?
• 38:05
  SPEAKER_00: And um, you know, how much do you rely on some sort of cyclical tailwind in terms of just generally better markets?
• 38:13
  SPEAKER_01: I um start when I started a business, I said listen, we cannot deny that um good luck with the waiver does play a big role.
• 38:23
  SPEAKER_01: But if that's what we're gonna talk about in a business, then um I think we make a mistake because you can be uh easily in in uh a position where you always blame external factors.
• 38:36
  SPEAKER_01: So as a minimum, we believe that we can um perform uh at a much higher level regardless of that.
• 38:43
  SPEAKER_01: So I believe that in the next year uh or two um the the benefits of Project Genesis will help us to get to a higher uh level of uh PBT and return on assets in all these areas.
• 38:57
  SPEAKER_01: Um and then if there's tailwinds or headwinds um that will either be a plus or a minus, but it will be on a much, much higher level.
• 39:07
  SPEAKER_01: So um I I do acknowledge that our returns in certain areas were not enough.
• 39:14
  SPEAKER_01: But I also like to say that you know we report because I think it was important for our investors to to understand where we make money and where not.
• 39:23
  SPEAKER_01: So historically we just had agriculture and stores.
• 39:27
  SPEAKER_01: So now people can see where we're actually making our money, and first impression clearly is that certain places the returns are very low, and and I even sometimes get the question, well, why do you even bother?
• 39:38
  SPEAKER_01: Right.
• 39:39
  SPEAKER_01: But the answer is that I mean this is only the beginning, isn't it?
• 39:43
  SPEAKER_01: So um, as I said, uh in the feed mailing business which had lower returns than we should have, um this is only the beginning now, and we're addressing that volume and margin and and uh opportunities to improve as well.
• 39:57
  SPEAKER_01: So we we absolutely believe that we can get to the returns which is in uh in in our public declared ambitions.
• 40:07
  SPEAKER_01: Um and but we we get the benefit of all these areas working together because they do have some commonality and that's farmers.
• 40:14
  SPEAKER_01: So um we um we believe that we need all three.
• 40:18
  SPEAKER_01: Um and although it's correct to look at uh um profitability in each of them to see where the money is invested, um I do think you should also look at it as a totality, and that's where why I believe that um if if we do everything well in our business, execute well, we will get the returns, which um is our minimum ambition of uh at least a 10% runner.
• 40:42
  SPEAKER_00: Got it.
• 40:42
  SPEAKER_00: Okay.
• 40:43
  SPEAKER_00: I mean uh two two two follow-up questions, I think.
• 40:46
  SPEAKER_00: W one just thinking about you you've essentially said that the the the collective group of assets is is worth more than they are in their individual components.
• 40:54
  SPEAKER_00: I I don't know from your disclosure whether you're able to sort of talk about synergies, how the but how the group is but better by being together.
• 41:04
  SPEAKER_00: And then just wanted to broaden out the question around capital allocation.
• 41:08
  SPEAKER_00: You said in some of your opening remarks that Winstate's historically made a lot of acquisitions, you know, you you you've you fixed the foundations, you're you're a net cash business.
• 41:18
  SPEAKER_00: Is is MA coming back on the agenda for you?
• 41:21
  SPEAKER_00: And and if so, what does a sort of what the targets look like?
• 41:24
  SPEAKER_00: And then I guess equally, if there are underperforming businesses that sit within the group, you know, are there any say uh uh is there anything off the table in terms of potential diversive divestments?
• 41:35
  SPEAKER_01: Oh let's start with that, you know, we've done what we had to do.
• 41:38
  SPEAKER_01: So um we identified about three assets in a business, um, which we believe is gonna be very difficult to get to the level of profitability we would like to see.
• 41:49
  SPEAKER_01: And um so the bad news is now behind us.
• 41:52
  SPEAKER_01: Um so we dealt with it last financial year, so I don't don't think there's any reason to divest of anything in our business.
• 42:00
  SPEAKER_01: It may be in in the future that in our store network with a specific store which probably need to move from one place to another.
• 42:06
  SPEAKER_00: But I mean we that's that's BAU, yeah, yeah.
• 42:09
  SPEAKER_01: So but we focus on growth.
• 42:11
  SPEAKER_01: So no um diversification is definitely um sorry, you know, to to to um to stop um operating in some of our uh reservoir assets is definitely not uh even on there's no reason for it.
• 42:24
  SPEAKER_01: Yeah.
• 42:25
  SPEAKER_01: Uh but I I do feel that um we have something very special in in a huge number of customers being very loyal to us.
• 42:35
  SPEAKER_01: But the benefit of bringing stuff together and working together, so we've got a very strong um marketing platform uh with a lot of data in it.
• 42:44
  SPEAKER_01: And as you know, data is king nowadays, and how you manage data is very important.
• 42:49
  SPEAKER_01: So uh if you're a farmer, we will know exactly um how much you spend on a farm.
• 42:54
  SPEAKER_01: If you're a dairy farmer, we will be able to say how much you should spend on many things which Wednesday does.
• 43:01
  SPEAKER_01: But historically, because um our teams work in silos, more than likely uh a typical farmer would have actually just bought one or two of his products from us.
• 43:10
  SPEAKER_01: In most cases, probably only one.
• 43:12
  SPEAKER_01: So we we've identified about seven core areas in our business which we believe we can scale, um, which a typical farmer will buy.
• 43:20
  SPEAKER_01: Um and the upside for our business and growth in the beginning is really to do more business with our current customers.
• 43:28
  SPEAKER_01: Share of wallet, yeah.
• 43:28
  SPEAKER_01: Yeah, share of wallet.
• 43:30
  SPEAKER_01: So um it's it's a new concept, um and uh it it it's it's it's it's still in the beginning of where we want to be, but I've already seen the tracks in our business.
• 43:42
  SPEAKER_01: So the difference between what we currently do and what we can do is is substantial.
• 43:48
  SPEAKER_01: You know, we we're talking about you know hundreds of millions.
• 43:52
  SPEAKER_01: Um can we do it and will we do it?
• 43:54
  SPEAKER_01: Time will tell, but I I think you know we we've got a plan to try at least uh and use the Technology as well to remind people that Wednesday is more than just one or two product types.
• 44:05
  SPEAKER_01: So first area of growth is really with our own customers.
• 44:09
  SPEAKER_01: But MA has never been off the table.
• 44:11
  SPEAKER_01: I just believed that last year was a bad time to do so because you know you can easily get distracted with that.
• 44:20
  SPEAKER_01: But now we will look at it.
• 44:21
  SPEAKER_01: And uh but it's back to capital allocation.
• 44:24
  SPEAKER_01: We will never pick something which will continue to give us a low returns.
• 44:28
  SPEAKER_01: So I mean with many opportunities.
• 44:31
  SPEAKER_01: Uh and we will pick ones which help us to get to the higher RONA numbers.
• 44:37
  SPEAKER_00: Got it.
• 44:37
  SPEAKER_00: Great.
• 44:38
  SPEAKER_00: And then maybe just going back to where we started, which was just you you you made some comments at the beginning around food security in the UK and and you have some concerns.
• 44:48
  SPEAKER_00: I mean, it's quite tough for UK uh British farming at the moment.
• 44:52
  SPEAKER_00: There's a lot there's a lot of um you know subsidy removals, we've got um significant cost pressures which have clearly been amplified with with the recent um Iran conflict.
• 45:02
  SPEAKER_00: So how what's your assessment of the health of British uh agriculture today?
• 45:08
  SPEAKER_01: Uh I think it's under pressure, uh clearly.
• 45:12
  SPEAKER_01: Uh and like in any industry, where are people doing well and make people struggling?
• 45:18
  SPEAKER_01: Um it's also clearly evident it's it's something in every part of the world I've been that the bigger guys get bigger and smaller guys struggle.
• 45:27
  SPEAKER_01: So um I I think that we will continue continue to see that as well.
• 45:32
  SPEAKER_01: But British farmers are excellent and they're very resilient as well.
• 45:36
  SPEAKER_01: Um, but they need a bit of help.
• 45:38
  SPEAKER_01: And help is not only physical help, you know, with uh funding or overbreaching, but it's also just clarity.
• 45:45
  SPEAKER_01: Um, because um take your own business.
• 45:48
  SPEAKER_01: I mean you you you won't invest in something which you don't know what's gonna happen in five years' time.
• 45:53
  SPEAKER_01: So I think it's it's it's um important that uh the government um provide these people along with term frameworks to work to.
• 46:03
  SPEAKER_01: Um and then the the farmers will adapt to that.
• 46:05
  SPEAKER_01: But I think it's it's tough.
• 46:07
  SPEAKER_01: Um but it's a resilient group of people and um they just need a bit of moral and emotional support as well.
• 46:14
  SPEAKER_01: You know, uh they are very proud of what they do, and and all of us have different political opinions, but one thing we have in common is that when we walk into a supermarket, we like to buy off-food, and people uh you know, they they they do want to back British farming, they want to buy local.
• 46:32
  SPEAKER_01: Yeah.
• 46:32
  SPEAKER_01: So let's just make it easier for them to do so.
• 46:35
  SPEAKER_01: But uh I I'm I'm hopeful, but it's tough.
• 46:38
  SPEAKER_00: And what what role can Wednesday play in terms of being part of the solution for um you know strengthening or solidifying the uh British farming?
• 46:46
  SPEAKER_01: Uh uh as a as a partner, as an advisor, being close to them, um uh to um to make all our resources available to to help them to make it easier to do business, um, to take some of the edicts away in terms of planning and advisory knowledge, um to help them with their cash flow by um being able to deliver nearly overnight if I need so, so that they don't sit with a lot of uh products on on their farm.
• 47:15
  SPEAKER_01: Um but also just to be a willing partner to listen and um because m lots of times these for these farmers are incredibly knowledgeable um and um they just want somebody close to them to be their partner and uh yeah again remember rural communities, they they want somebody the local person they can have a relationship with.
• 47:38
  SPEAKER_01: So we we we invested um with lots of people on on farms, um knocking on farm doors, going to farmers over weekends even, um, and then use technology.
• 47:50
  SPEAKER_01: You know, we we um have a new generation of very dynamic progressive farming, um taking over farm family farms.
• 48:00
  SPEAKER_01: Um they look at technology differently.
• 48:03
  SPEAKER_01: So we we need to be able to to help them by um uh and it can be anything from AI to uh platforms where they can communicate on when they want to do so.
• 48:15
  SPEAKER_01: Um farmers um work hard, they are up early in the mornings.
• 48:20
  SPEAKER_01: Um when they want to talk to somebody, we need to make sure that there's at least some platform they can do so.
• 48:26
  SPEAKER_01: If they want to place order overnight or through the early mornings, we we need to be uh making sure that they are able to do so.
• 48:34
  SPEAKER_01: Um so that's what Wednesday is is working too, and in many ways I've already um you know succeeded in doing so.
• 48:44
  SPEAKER_00: We we we don't come with a uh magic wand here, but if you were talking to a government minister at the moment or the uh the government around sort of fundamental policy changes that would really sort of support the industry over the next decade, what what would sort of your one one wish be?
• 49:01
  SPEAKER_01: Yeah, I I I I you know I know that all governments um get a lot of uh negative publicity.
• 49:07
  SPEAKER_01: Um it's a tough position to be in because um farming needs a lot of support, but so is many other areas.
• 49:14
  SPEAKER_01: Um so I I feel sorry for these guys to how do they prioritize?
• 49:19
  SPEAKER_01: Uh but I I just believe that the industry needs to um take the responsibility of communicating what the opportunities are and what the clarity is.
• 49:29
  SPEAKER_01: I mean these these outside maybe sit tropical fruits and Britain Kennelly produce everything for himself.
• 49:36
  SPEAKER_01: And um the whole idea that you can always import something is is not always true, isn't it?
• 49:43
  SPEAKER_01: Sometimes it is, but if everybody's in the same situation, COVID as an example, uh and and a country is always gonna look after himself first.
• 49:52
  SPEAKER_01: Yep.
• 49:52
  SPEAKER_01: So I I I would like to to um suggest that uh the government of any country, including the UK, just take a long-term view of uh food security and supply chains needed to um to deliver that food.
• 50:08
  SPEAKER_01: Uh because then you take all these emotions away and um and then just provide uh frameworks for for farmers to to have long-term clarity of where they should invest in.
• 50:19
  SPEAKER_01: Um sustainability is an important thing for the government and for all of us as consumers and and human beings, but also then um to make it easy for them to implement that plans.
• 50:32
  SPEAKER_01: Sometimes also maybe just some help here and there with subsidies as well will help.
• 50:37
  SPEAKER_01: Not handouts, um, just short-term help.
• 50:40
  unknown: Good.
• 50:40
  SPEAKER_02: Well, listen, uh, we're coming to the end of the discussion now, which has been a really interesting conversation.
• 50:45
  SPEAKER_02: Um so you're 18 months into the the role, um, so it's still relatively early days, and you know, the stock market is not giving you a huge amount of credit for what you've achieved, you know, shares trading below.
• 50:57
  SPEAKER_02: Now that's a value, you've got a quarter of the market cap um in cash.
• 51:01
  SPEAKER_02: So in terms of addressing that perception, um, you know, if you could sort of leave listeners with um kind of a vision, sort of slightly longer term, let's say five years, about what Wednesday can become and why the market is underestimating it, um, what what would it be?
• 51:18
  SPEAKER_01: So um before I go forward looking, the fact that we for 22 years in a row been a progressive dividend supplier um is important.
• 51:28
  SPEAKER_01: And a big number of our investors um are really keen for us to to openly say that we will continue to do so, and we will.
• 51:36
  SPEAKER_01: Um, you know, the plans are always been to um to make sure that uh people investing in Wednesday will will get a dividend, and we work very hard to get our results to make sure it's a progressive dividend.
• 51:48
  SPEAKER_01: So the first place is we would like to continue to do what the good things we've done in the past, we would like to continue to do.
• 51:55
  SPEAKER_01: And then uh we we um the industry we're in are quite fragmented and there's many opportunities, and I personally think once they can take a stronger role in and growing in all the areas we're in.
• 52:09
  SPEAKER_01: So I would say in five years' time, I hope to see that uh the company is is substantially bigger and more successful in all these areas, um, and that we've pivoted into areas which have um uh a higher margin as well.
• 52:24
  SPEAKER_01: The big thing is that we don't want to be inconsistent.
• 52:26
  SPEAKER_01: I really like to to um to make sure that we always keep our promises and um we we don't want to to promise a world and then not deliver on it.
• 52:37
  SPEAKER_01: So we are conservative.
• 52:38
  SPEAKER_01: I am conservative, we've got a conservative approach.
• 52:42
  SPEAKER_01: Um we would just like to to always hit the expectation of the market and and I hope that we will do so for for many years to come.
• 52:50
  SPEAKER_02: Alk, thanks for being on the business case.
• 52:52
  SPEAKER_01: It's an absolute pleasure, thank you.
• 52:53
  SPEAKER_01: Thanks, Alk.
• 52:55
  SPEAKER_00: So, Mark, our first uh Ag Business on the Business Case podcast.
• 53:00
  SPEAKER_00: Um you clearly know the business quite well, but what what did you uh take away from uh the discussion with Alk?
• 53:05
  SPEAKER_02: Yeah, look at it's kind of interesting, um, because it's a relatively small business, right?
• 53:10
  SPEAKER_02: Marker cap of circa 80 million pounds, but this is a company with you know half a billion pounds of revenue.
• 53:16
  SPEAKER_02: And you know, clearly it's an important uh part of UK agriculture.
• 53:21
  SPEAKER_02: And um it's interesting.
• 53:23
  SPEAKER_02: The chief executive Alk has come in um trying to turn around a uh, you know what, it's been quite a traditional business.
• 53:30
  SPEAKER_02: Um and you know, you know, I'm pecking through w what where the potential is.
• 53:35
  SPEAKER_02: But I was I was really pleased that they wanted to come on the podcast because to me this is a bit of a um an illustration of the inefficiency of smaller companies and how they're valued.
• 53:47
  SPEAKER_02: Because here's a company um, you know, with a market cap of you know about 80 million pounds, a quarter of the uh market cap is in is in cash.
• 53:56
  SPEAKER_02: Um you have a new management team, they think they can double returns, and there's a 5% dividend yield uh whilst you wait.
• 54:04
  SPEAKER_02: And look, this is a company that's very asset-rich, trading below net asset value, um, and is absolutely essential to life in the UK.
• 54:14
  SPEAKER_02: This is not going to disappear through AI as long as farmers need to plan seed.
• 54:20
  SPEAKER_02: So to me, this is what investment is about.
• 54:22
  SPEAKER_02: But unfortunately, it sits on the stock market, there aren't many institutional shareholders.
• 54:27
  SPEAKER_02: Um, but I think it's a it's a really interesting risk reward from where we are today.
• 54:31
  SPEAKER_02: Well, what did you think, Phil?
• 54:33
  SPEAKER_00: Yeah, look, um I I'll take a I'll take a slight counter view that when I was look doing my research, if I looked at where the earnings multiples were, it it looked broadly in line with its peers.
• 54:43
  SPEAKER_00: So it it didn't scream like this was a bombed-out share from a valuation point of view.
• 54:48
  SPEAKER_00: But I mean what what's very clear from the discussion is that you know Al's got this very clear turnaround plan, he he's clearly executed, he's done it before, he's he's got the t-shirt, he's got a very sort of clear methodical um way of thinking about how to how to turn around a business, and and he's you know, clearly a good way through that.
• 55:09
  SPEAKER_00: Totally agree with you.
• 55:10
  SPEAKER_00: You know, clearly there's a there's a good asset base here, it's an absolute critical part of the economy.
• 55:16
  SPEAKER_00: And yes, you're you I was really thinking you know, we're not going to talk about AI here at all, even though that's probably underplaying it's probably quite a lot of technology that does go into farm, but but it's not gonna get competed away.
• 55:28
  SPEAKER_00: We still need food on the table.
• 55:30
  SPEAKER_00: Um, but you know, doubling margins and you know, doubling return on capital employed, that that's a that's a big ask.
• 55:38
  SPEAKER_00: And clearly as a shareholder, you're sort of needing to believe it in that.
• 55:42
  SPEAKER_00: But um, yeah, look, I think um I think he he's he's got a really good plan there.
• 55:47
  SPEAKER_00: He is super passionate about what he does.
• 55:49
  SPEAKER_00: You know, we were we were chatting afterwards and he and he just said he's loving it, and you know, people can't see him, but you know, he had a real big smile on his face a lot of the time when we were get him to getting him to talk about the business, you know.
• 56:02
  SPEAKER_00: He he's done the hard work, the you know, the cost out programme, he's he's set the foundations, you know, a little bit of volume, if they get a bit of cyclical tailwind, you know, I could see how that could could quite quickly encourage a lot of people to come in.
• 56:15
  SPEAKER_00: Well the one thing I really liked, and it brought me back to uh Lindsay Ruth in um season one was that he's like you have to you can't blame the market, you have to you have to own your own performance.
• 56:26
  SPEAKER_00: And Lindsley was really powerful when when he talked about that.
• 56:29
  SPEAKER_00: So uh yeah, look, uh a good good conversation in a in a sector I don't really know at all well.
• 56:35
  unknown: Yeah.
• 56:35
  SPEAKER_02: Good.
• 56:36
  SPEAKER_02: Well, hope you enjoyed that conversation.
• 56:37
  SPEAKER_02: Lots more good guests over the next few weeks.
• 56:39
  SPEAKER_02: Just do send us some feedback, any guest suggestions, and until next time.