Good afternoon, everybody. My name is Alk. I'm the CEO of Wynnstay, and with me, Rob Thomas, our CFO. It's a pleasure to talk to you today. It is a pleasure to talk about our half year results 2026. I'd like to start by saying that we are very, very satisfied with our half year results, particularly because of all the headwinds I'm sure most other investors are well aware we had to cope with. Some of them, just to name a few, was really softer market conditions, massive inflation in logistics, energy, and labor, very mild winter, a drop in dairy prices, and overall margin pressures. This has proven without any doubt that Project Genesis is delivering. We saw an increase in our margins. In the meantime, we created huge capacity in our feed milling and fertiliser business. We saw significant cost savings.
The grain trading business, which is now a combined platform, has been a great success. The half year one proved strong operational and financial discipline in our business. With that, I'm actually pleased to take you through a presentation, and I'm going to hand you over to our CFO, Rob Thomas, which will kick off, and then I will jump in later, and then we will sort of change between the slides depending on the slides between us. It's really a pleasure to talk to all our investors, and we're looking forward to today.
Thank you, Alk. I'm pleased to say that in the first half of 2026, Project Genesis is delivering and Wynnstay has a much more resilient and robust business. We've demonstrated profit growth with our adjusted PBT up 11.7% versus the half year of 2025 to GBP 6 million. That shows 59% growth versus the first half of 2024, and that's really the start point of when we instigated Project Genesis. We've delivered in tough markets, as Alk mentioned. We faced pressures from labor costs, logistics inflation, energy cost increases, but they've been offset by the efficiencies and the commercial performance that's been driven through Project Genesis. We're also pleased to say that we've improved the balance sheet from the first half of 2025 with net cash generation of GBP 600,000. It's really good to see strong cash generation in what's been an inflationary environment.
Off the back of the strength of the results, the strength of the balance sheet, and our confidence in the outlook, we've increased our dividend to GBP 0.059 per share, which is a 3.5% increase. That's consistent with our progressive dividend policy, and whilst this is the interim dividend, it's the 23rd year of successive dividend increases that Wynnstay has put through since it listed in 2004. We are also confident of the outlook for the full year and the second half. We're maintaining our profit guidance, but we have confidence in further progress based on a strong fertiliser order book and continued Project Genesis benefits. Let's look at the results in more detail. Our revenue remained broadly flat at GBP 304.1 million. We improved our absolute gross profit to GBP 42.3 million, which is just under 1%, a 0.7% increase.
We've also increased our unit margins both on a pound per ton and percentage basis compared to the first half of 2025. As I mentioned, adjusted PBT of GBP 6 million is up 11.7% versus the first half of 2025, and our net cash has increased by 5.8% to GBP 10.9 million. Our adjusted EPS of GBP 0.209 represents a 15.5% increase, and the GBP 0.059 of interim dividend is a 3.5% uplift. If we now turn to segmental performance, we can see how Project Genesis is benefiting the entire group. Let's start with feed and grain. We think we've had an excellent performance in feed and grain. It's been driven by a really strong performance in our grain trading platform, GrainLink.
As a recap to those who follow Wynnstay, one of the key things of Project Genesis was that we have integrated our trading platform across the former Wynnstay, Glasson, GrainLink brands into one platform, and that's driven some strong growth in both volume and margin. Our revenue was down slightly in this segment, and that was because of the definitive action we took last year to close loss-making businesses in our Twyford feed mill and also in our Glasson Dock speciality corn mill that made bird seed and bird feed. Those businesses were loss-making, and by reducing the revenue, we've increased the gross profit contribution and significantly taken cost out of the business to grow adjusted PBT to GBP 2.2 million. That's 139% increase versus the first half of 2025.
The significant asset base that was utilized within those loss-making activities is now out of the base of the business, and I'm pleased to say that our return on net assets has increased to 6.7%. That's a 460 basis point increase. We've also created some significant capacity within our feed milling operations, which means that we have now a really strong platform to grow our feed and grain business over the coming years in line with our strategy. The arable segment has had a really strong first half to the year. I'm pleased to say that we've grown our revenue to GBP 88.4 million. That represents 12% increase in our manufactured fertiliser volumes, which has been driven largely by our new fertiliser blending plant in Avonmouth, which is a port in Bristol.
That's given us market share growth into the southwest of the country. We're really pleased to say that Avonmouth has now been operational for 12 months. It's performed in excess of its business case and is contributing strongly to both the arable performance and the group as a whole. That's driven an improvement in gross profit as well. We also benefited from a strong spring trading period. We sold our stocks very well. We had a strong order book going into the season, and we'd made significant progress in terms of volume and margin ahead of the market volatility, which came in March as a result of the Middle East conflict. That did mean there was a spike in fertiliser prices. We'd already sold the majority of our spring book ahead of that at strong margin.
We did, however, have certain stocks available to sell, and that led to a modest improvement in profitability over and above where we would have expected to be. We estimate that was around GBP 0.3 million. We have managed the volatility very well. We have had no impact on our supply chains, and we, going into the second half, have a good, strong fertiliser order book, and we have a square position. And what I mean by is that we have sold everything we have purchased, and we do not have any exposure to any downward market pressures on fertiliser prices in the second half. Our store performance was slightly more disappointing. We saw softer market conditions, which meant there was less demand, particularly around small bag livestock feed, which are the biggest selling products in our stores.
We also faced margin pressure from inflation, and that was where suppliers had used the Middle East situation to put their prices up. We also saw overhead pressures through wage inflation and fuel inflation. I am pleased to say that we have made an improvement in Q2, and we continue to improve performance in the business in the second half. Importantly, the stores business is optimally positioned for growth both in the second half and in the midterm. Let us move into the financial review. We believe we have made a higher quality level of profit and returns from the business that we had. The slide here shows our performance in the first half of 2026 versus the first half of 2025. I have talked through a number of these metrics previously.
I would also just like to add that our RONA as a percentage, RONA is our return on net assets, has increased by 60 basis points, 7.3%. Those who follow Wynnstay, you will know that our midterm target is to get RONA across the group to in excess of 10%, so we feel that we are on a positive trajectory. We have highlighted where we believe the group would have been positioned had we not taken the actions and initiatives under Project Genesis. We would have had a larger group because we had loss-making operations that we had closed. However, we would have had lower unit margins, and our margin as a percentage would have been much lower.
Our overheads would have been significantly higher because of the cost that would have remained in the business, both in terms of the operations loss making, but also because we had more inefficiency in the way the group operated, and we feel that those overheads would have been amplified in an inflationary environment. We believe that had Project Genesis not taken place, the profit of the group would have been under GBP 3 million at GBP 2.9 million. Earnings per share would have been only GBP 0.099. Our net return on assets would be 2.1%, and we do not believe we would have been in position to pay progressive dividends. Overall, we think that Project Genesis has been a success in its first 18 months, and as I mentioned, it gives the group a platform for growth going forward.
If I move to the cash flow, as I mentioned, we're really pleased that not only have we delivered strong P&L performance, we've also driven strong cash performance. In the first half of the year, it represents the lowest point in the group's cash position, and that's because Wynnstay's working capital cycle follows the agricultural calendar. As we enter the busy spring trading period, we buy forward stocks for fertiliser, animal feed, and we also make sure that we have stock in stores ahead of the busy spring trading period, as you would expect. Those sales are in cashed in Q3, and working capital normalizes in the second half of the year, and at the year-end, we report a higher cash balance. For the purposes of measuring cash performance, we've shown here a year-to-year bridge.
As I've mentioned, we've improved our cash flow to GBP 10.9 million, and that's through strong operating profit performance, EBITDA, and GBP 2.3 million of working capital benefits. I'll talk around other initiatives we have in working capital going forward. We continue to invest our cash flow in line with our capital allocation framework. We've got expansionary and maintenance CapEx of GBP 5 million. We have a dividend payment of GBP 4.1 million, and we've made cash exceptional charges of GBP 2.5 million. Last year, we reported a number of one-off costs and provisions. Those have flowed through the cash flow in the first half of this year in line with our expectations, and we're pleased to say that the majority of our restructuring activities are now completed.
There's a small tail of cash flow to follow, it's all in line with the expectations and the provisions that we made at the end of last year. We just wanted to pause and explain how we're better positioned to manage volatility. We believe that we have the ability to control Wynnstay regardless of the market pressures that it faces, and the Middle East situation in Iran and the Strait of Hormuz on fertiliser is a good example of this. As I mentioned, we had a modest benefit in this particular financial year. Historically, Wynnstay has made windfall profits when markets have spiked. This was a little bit different than 2022. We had sold more fertiliser into the spring season, so we had less stock to sell. However, as I mentioned, we were really pleased with the margins that we'd achieved on those sales anyway.
In 2023, we experienced a market correction when the market went down, and we lost money. We feel we're better positioned in 2026 because we have a square order book. We're also making sure that the team maintains a tight position, whereby if we've made a sale, we'll cover it in immediately. We're trying to limit any long positions we have, where we've bought stock ahead of us in a falling or correcting market. We did also face certain inflationary pressures elsewhere in the business. As I've mentioned, there was fuel cost inflation, where we looked where appropriate to recover those through our sales, logistics, and haulage costs, and we also saw product cost inflation in our store network. I'll now hand over to Alk, who will provide an update on Project Genesis.
We made very clear commitments around what we will deliver by the end of this year in terms of Project Genesis, and I'm pleased to say to our investors that we are on track against all our commitments. On this screen, you will notice a list of commitments we said we will undertake. You will notice there are two which is still ongoing. The first one of that is our manufacturing capacity increase in Carmarthen. It was always focused on being another year. We've already created the extra 25,000 tons capacity in our Carmarthen business and sold quite a lot of that. There is more to come in our next financial year. We also have investment in our Conder Green blending plant, which will still partly be executed next year.
You will notice that we have made significant progress on a lot of initiatives, and I'm pleased to just highlight a few of them. Our Glasson Fertilisers business is now fully integrated. As a reminder, it was a subsidiary of the larger Glasson, which were then a subsidiary of Wynnstay Agricultural Supplies, which then was a subsidiary of the Wynnstay Group Plc. Now we have a flat structure. Our fertiliser business reports directly into the executive team, and that has really been a success story and partly also how well we could mitigate risk is because of that direct contact with the team. I also like to point out that all unprofitable assets is now being divested, which includes the Glasson Dock, our which is part of Youngs Animal Feeds, and our Twyford Mill.
These actions has been taken, has been completed, and now we actually feel that all our assets are fit for purpose and worthy of investment, and we are really excited about our very, very strong asset base, and great manufacturing assets and assets including our stores, which will continue to generate very good returns for our company. Then also perhaps worthy to highlight is the commitment we made to add extra fertiliser capacity. We undertook the Avonmouth investment in fertiliser. We are very, very pleased with the progress we made there. We have increased our market share in fertiliser in general, and that is a big part about this because of availability of fertiliser in the southern part of the country, to customers, but also to our own stores. Overall, we believe that we have delivered against our commitments made at the launch of Project Genesis.
We always say that we can't control the market, but we can control what we do in Wynnstay. Again, I would like to point out some headwinds which we had to navigate through this year, which were significant. Clearly, there is a lot of agricultural market pressures. There's definitely lower farm profitability in some sectors. Commodity prices volatility is evident everywhere. Logistical and supply chain volatility will continue. We have seen substantial fuel cost inflation, and obviously the wage inflation and national living wage increases that affected the business, and we had to handle that cost increases in our business. At the same time, the benefits of Project Genesis have helped us to mitigate all these headwinds. We simplified our operating model, which is now a leaner structure. Our loss-making assets has been exited, and we already started seeing the benefits of that.
We made significant manufacturing cost savings. The GrainLink integration has been completed, and the benefit of a combined business has been a big, big success. The Glasson Fertilisers integration has now been completed. We saw improved pricing and margin discipline all over the business. I mentioned the capacity expansion in Avonmouth and in Carmarthen, and then enhanced systems, data, and business controls everywhere in the business, and improved working capital management is also evident in our improved cash flow. Project Genesis benefits are now offsetting external inflationary and market pressures, and this project has really been instrumental to improve the financial stability of Wynnstay.
Now we have financial stability. We believe we have a stronger platform to deliver sustainable growth, and that's where Wynnstay's Strategy Genesis comes in, which is our five-year board-approved strategy. Just as a reminder, the medium-term targets we have under Strategy Genesis are on the screen. When we say medium-term, we mean by financial year 2029. We want to grow the business both in terms of revenue and gross profit. We want to improve our operating margins and EPS growth. The target I'd like to highlight, as I've mentioned before, is that our return on net assets will be over 10%. We want to double share of wallet, which is the amount of farmer spend we have from our existing customers, and we want to be a top-three U.K. player in all core categories.
This slide shows in blue, on the left, where we've been in terms of our adjusted PBT in financial year 2024 and 2025, where our expectations are for this year, 2026, as a reminder, our expectations for the year remain unchanged, where we're forecasting through our broker Shore Capital to be for financial year 2027. Our market forecasts, we like to forecast on a conservative basis, and we have confidence in our ability to deliver that. We also want to show you what our ambitions are in the green section in the future of the group and how we can grow it. We believe we can achieve our growth ambition through Strategy Genesis, that's growing through the existing capacity we have in the business, the capacity we've created through Project Genesis, and now we're ready to sell it to grow.
We want to grow the share of our farmer wallet, increasing penetration into our strong customer base, leveraging farmer relationships, and using the really good, strong CRM data we have in the business to drive our sales performance. As a recap, we'll also be focusing on the seven core products where we think Wynnstay is best placed to drive growth and improve margins.
We're very proud of our integrated business model. It's important, and we often get asked the question about the importance of a certain part of a business, whatever that may be. I believe that the Wynnstay model which we now have is unrivaled, and the way we actually work together as an integrated business team can really tap into all needs of our customers. I believe that everything can start with seed. We've got a progressive seed business. We are either number one or two largest seller of grass seed in the U.K., depending on when you measure that. That can lead to great touchpoints with our farmers in terms of grain trading, where we have ability to complete a back-to-back transaction to buy the grain back before it's even planted. We are focused on soil health and protecting productivity on farms.
Our fertiliser teams are trained to apply modern fertiliser techniques, analysis. Through our blending plants, we can do dedicated offerings to customers. We obviously know that very few of our farmers are only exclusively an arable or a livestock or a poultry farmer. We have ability, while we're doing all of this stuff, to focus on our poultry offering, our offering in beef and lamb, and also dairy. Rob actually mentioned the seven core products. At the same time, we can either sell directly to farmers or through our store network, our seven core categories, which we are focusing on, which is our feed, our arable products, our harvest products, our blocks and buckets range, our animal health products, milk powders, and supplements.
That does not mean that we are not focused on other parts of the need of farming, which include farming improvements, hardware sales, tools, equine, pet sales, and so on. We really have a unique basket of products we can offer our customers. That will drive our growth in the future. I now would like to spend a few minutes just to look after the reporting segments of our business. I'll start with feed and our grain trading business. We are really very proud of the success we had in our grain trading business. We have now expanded our geographical offering through GrainLink. We increased market share through a single integrated platform. Our leverage has enhanced customer relationships, and we had the ability to improve our margins through scale and trading efficiency.
In manufactured feed, our pullet strategy creates integrated feed opportunity. We are planning to grow our pullet offering to 2 million birds, which will create recurring feed demand. Our contracted feed volumes will improve through our demand planning, and longer manufacturing runs will improve our efficiency. This part of the business is a significant part of our revenue estimated to over a 12-month period to be about GBP 300 million. It's 51% of the group's revenue. Currently, the adjusted PBT represents about 26% of a PBT of a group. In terms of RONA, it's increased a lot since 12 months ago. We believe that there's much still to go for. Why does it matter? We believe that we can contract more contracted volumes. We believe that we are now able to handle higher manufacturing utilization, better customer retention.
It will help us to improve our margins and reduce our volatility in our business. In terms of arable, our focus is building a market share from an enhanced manufacturing platform. Our fertiliser story has been a very successful one. Avonmouth provides 20% additional blending capacity, and we are now able to expand into new geographical markets and to continue to grow market share, also in industrial and non-agricultural applications in the future. More capacity, more markets, and more opportunities will lead to further stronger results. In seed, our Astley plant remains a market-leading process facility. We have made additional investments to create capacity, to grow cereal seed offerings, and to strengthen our leadership team and our leadership in general in grass seed market. Our business is market leading in terms of capability, and we will keep continuing to invest for future growth.
In terms of the arable industry, in totality, we are absolutely focused on manufacturing excellence with single manufacturing methodology across all Wynnstay's manufacturing plants, which obviously also include our feed milling. We are working hard to create multi-skilled operators across sites, which will reduce our seasonality and seasonal cost pressures, and all focus on continuous improvement in efficiency. Manufacturing needs to be consistent, efficient, and competitive. This is an important part of our business. With 25% of our revenue over a 12-month period coming from this, and about 28% of our group's PBT and RONA, which is slightly reduced from last year because of the investment in Avonmouth. Reducing seasonality will help us to diversify products and end-use applications. Our multi-skilled colleagues across the sites and disciplines will reduce our costs, and expanding into new markets and geographical areas in the U.K. will help us with extra market share.
We now have a more balanced year-round earnings profile in this category, and we are building a stronger, more resilient arable business. Lastly, our stores. Our stores has been historical cornerstone of our business. In terms of revenue, not the largest part of our reporting, about 24%. In terms of adjusted PBT, it has been and still is a significant part of our business. RONA, which still needs to go up as well. We have 51 stores in our store network. In terms of financial performance, Rob has mentioned it in the beginning, not all our stores have performed equally well. We have a number of stores which needs a bit more attention, and a lot of work has been going into this in the last two or three months.
We have had significant headwinds in this area in terms of very mild winter, and a significant amount of inflation on nearly every area, including labor cost and so on. This is an area which really excites all of us in the executive team and the board. We are planning to test various new, more modern opportunities outside our normal store range. We will plan to talk about that much more in our February of the full year announcement. We felt that we just wanted to point out to our investor audience that there's not a day which go past which we're actually not considering new and more modern thinking in this area, and we believe that it still can continue to be a very important part of our business. Saying that, our stores are one of the areas where we have incredible amount of working capital tied up.
Through collaboration with our suppliers and slight changes to our distribution model, we believe that we can actually help to improve the working capital of the group, and we will talk more about that in our February announcement of the full-year results.
As Alk mentioned, there's growth opportunities and development potential in each of our three business segments. I just want to talk a little bit about how we believe we can self-fund the growth and development in each area of the business by releasing capital across the balance sheet. One of the first things we did as part of Project Genesis was perform a full balance sheet review. We were looking for underperforming or non-viable assets, and that was one of the first things we did. Now what we've got, we're happy with. We just want to make it more efficient. We believe there's upwards of GBP 8 million that we can release over the next two to three years through improvements in working capital and through a strategy around our property portfolio. Let's look at working capital first.
The biggest opportunity for us is around aged debt reduction. We've done some good work in Wynnstay over the last couple of years where we've reduced overdue payables, but we believe there's a further opportunity to do that, working with customers through more efficient tools, using electronic statements, electronic payments in order to facilitate ease of payment. We also think that we can use certain analytics tools that support the team by automating a number of the processes, making things easier, sending automatic reminders, which enables the team to focus on the relationships with our core big customers, working in conjunction with our sales team to manage the credit process.
Through our store network and buying team, we think that there's a huge opportunity around stock optimization, looking at stock turns, making sure we have the right stock at the right time and leveraging suppliers for consignment stock, which reduces the amount of capital that Wynnstay holds, but also reduces the inventory risk. Finally, through relationships with suppliers and using the purchase power that Wynnstay has, we believe there's an opportunity to negotiate some favorable terms with our supplier base. Regarding property, we have a mixed property portfolio within the business. There are certain assets that will remain owned and we would always want ownership. A prime example of that is feed mills where ownership of site and land is a real competitive advantage.
There's certain areas such as stores where maybe a leased or mortgage model may be more appropriate, and we can use that to free some capital that we can then invest into growth opportunities. That's probably a timely reminder to look at our capital allocation framework. This has been in place now for around 18 months, and it's given us a really good internal guide and hurdle rate to use when we're looking to deploy new capital. I hope you've seen from the presentation, there's many initiatives and opportunities that we've got across Wynnstay. I think it's really important to have a framework that gives us a template to work those through so we can prioritize for best returns. Just as a reminder, we invest for improved efficiency from our existing asset base.
That's through maintenance, CapEx, and streamlining of what we have for better returns. We look for organic growth, so targeting investments to expand or modernize to unlock growth. Avonmouth is a great example of that. We are open to disciplined M&A where it aligns with our strategy. Finally, we remain committed to a sustainable and progressive dividend. As I mentioned, we're now in the 23rd year of consecutive dividend growth.
In summary, Project Genesis is delivering change and Strategy Genesis is driving growth. Our performance of GBP 6 million at PBT level at half year one means 11.1% increase versus last year. It's the first consecutive period of improvement. Project Genesis has been delivering the benefits of a lower cost base, better margins, integrated operations, improved cash generation and operational excellence. Strategy Genesis will continue to drive our growth. Our capacity expansion is focused on that. Market share gains is targets for all our parts of our business. We will continue to use data and CRM advantage, which we do have in the business. We've got phenomenal data available of seven core products will help us with our share of wallet focus. Our balance sheet is strong with net cash of just under GBP 11 million.
We have a progressive dividend, which we will continue to maintain, and our working capital opportunities to fund growth internally has just been mentioned by Rob. In terms of the outlook, we are confident that our trading will continue to be in line with our expectation of the board. We've got a strong order book. Our full year expectations are unchanged and further improvement is expected from last year's financial results. We cannot control the weather, the agricultural markets, but we can control the way we run Wynnstay, that will continue to be our philosophy in our teams. We are proud to serve all stakeholders in our business. Wynnstay is a phenomenal company to work for, to do business with and to invest in. This now concludes the presentation and we gladly will take some questions.
That's great. Thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the right-hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed by our investor dashboard. As you can see, we have received a number of questions throughout today's presentation, and if I may just start off with the first question here, which reads as follows. "I congratulate the management team on the robustness of the balance sheet. Do you have any plans to utilize this strength?
Well, thank you. No. As we talked about through the presentation, there's many growth opportunities. We've got a strong balance sheet. We've got plans to generate further capital release that we can invest. We've got an established capital allocation framework now that we can look to deploy capital through. We will continue to invest in maintenance, CapEx efficiency. We'll look to organic growth, and we'll be maintaining the progressive dividend policy. As Alk mentioned, in each area of the business, we've got further work we can do around the capacity expansion in our feed milling business. There's further opportunities to grow organically through geographical expansion in the arable sector and fertilisers, which is really around replicating the success of Avonmouth in new geographies. Finally, in stores, I hope everybody can see the real potential in growing that network in a targeted geographic expansion around the country.
We're very happy both in terms of the balance sheet strength, but the excitement that we've got in the opportunity to use it to develop the group that we have.
That's great. Turning to the next question. Visiting the Wynnstay Stores website leaves the impression that online retailing has been a low priority. How much demand is there for services such as click and collect in this sector?
Yeah, there's a lot of demand. I'm sorry that is the impression. That is not the case at all. Online retailing is a very big priority for Wynnstay. However, to do it successfully from a consumer or customer first impression point, also from an easy-to-use perception, to allow deliveries to be in line with modern expectations, to make sure that our product fulfillment and so on is right. We have done a lot of work and are still doing that work. I can assure you that we're totally on it. To do well, you need to have a proper system behind you. It needs to be fully integrated from the suppliers. The technology you use needs to be world-class and spot on. That is a priority for our business. That's not a priority which is a quick fix.
We are absolutely confident that in the next calendar year, we will be able to talk much more about what we're currently doing. Wynnstay embrace technology, and we believe that we have ability to do a very strong online click-and-collect, and also using other modern technology tools to lead this initiative in our stores. Our current website does not indicate our very sincere focus on that area. I believe that you will see that there's much more to come.
Perfect. The next question we have here reads, how do Wynnstay plan to increase share of farmer wallets while also focusing on seven core product categories and experimenting with smaller-footprint store?
Well, the smaller-footprint store is mutually exclusive from our focus on the seven core categories. Seven core categories are the categories which I did mention, and that will help us with our share of wallet. We have very strong data. Every customer which actually buy from us on credit, we have a lot of detail about the size of a farm. We can establish how much of a spend of a farmer which can buy these seven core categories from us, they actually buy. The difference is the size of opportunity. We're not saying that is going to be easy. We're saying it's something which is potentially available and is something which we feel we should focus on. It's always easier to do more business with your current customers than to get new ones.
We'll continue to try to be attractive for new customers as well. In terms of a smaller footprint stores which we will test, I think that will just be additionally ability to serve a customer base which potentially is even outside our geographical area today.
That's great. Just turning to the next question. When visiting Wynnstay Stores, what changes should we see as a result of Project Genesis?
We're planning to talk more about our stores in our presentation, which we will do after our full financial year results. I would like to just say that I have made a big effort to spend a lot of time in our stores as well. I think our stores are phenomenal, and I think my colleagues in our stores are exceptional. Our stores doesn't look the same. There are things which we can try to improve from store to store, but it's not necessarily the same. Our focus for today, the discussion of today should be that we should provide world-class advisory knowledge. We should have sharp prices. We should have shelves which are full. We need to have stock availability which are acceptable. I did mention prices which is competitive. That should be our focus for now.
All new things will be discussed next year. This is a very important part of the business. Actually, we will continue to work hard to be very competitive in it.
Thank you. With a stronger cash position and improving cash generation, how are you planning on allocating capital moving forward and how much earnings upside is within your control?
Thanks. I think the previous question I answered actually talked a lot about allocation of capital. Just as a recap, we're looking to invest for growth in each part of the business, and there's a number of initiatives that we have. Regarding earnings upside and how much of that is within our control. Again, just referring back to the presentation. Our forecasts for this year were shown in terms of the GBP 10 million and the GBP 11 million forecast for 2027. We're confident that we have that within our control. One of the themes of today's presentation is that whilst we can't control markets, we can control Wynnstay, and we think through the Project Genesis and Strategy Genesis initiatives, delivering those market forecasts is in our control. In terms of the medium term targets we talked around and the 10% RONA, that's our ambition.
Obviously, we'll need to assess that into the medium term. We remain confident that we can control this business and we can improve that level of profitability as we've outlined today.
Perfect. In the results release, you mentioned that some costs had been absorbed as part of the investments in the business. What was the scale of these costs and what return do you target in making such investments?
We invested, over the last 12 months, GBP 5 million of net cash CapEx into the business. That's an absolute spend of GBP 5.5 million, less some capital disposals that we've made in the period. We invest that in line with our capital allocation framework, which relates to a hurdle rate of 15% for investments. The idea being that if we increase the rate, we can improve the underlying return on net assets of the entire business to closer to 10%. I'd give an example of the Avonmouth investment that we've made over the last 12 months, which has performed in excess of the targets we set through that capital allocation framework. We're really pleased to see that flowing through into the Group.
In terms of when we're talking about costs that have been absorbed, we've also been making certain investments that aren't capital in nature. We've been investing in IT costs, in establishing a food safety and compliance team within the business, and that involves a number of colleagues who we've recruited. We've got a new IT director, a new Group sustainability and technical manager who's dealing with food safety. Those do go onto the run rate of our costs, but we believe that we call them enablers, they will enable the commercial performance that we're driving through Strategy Genesis to take the Group forward.
Perfect. Just moving on. How did probably weak farmer sentiment affect the Stores business in the first half, and has this improved?
Yeah, it definitely affected that. There's no doubt about that. Especially our first three months of our financial year were particularly weak. We also experienced quite a mild winter, and that affected our small bag sales in our Stores. During the same period, we had lots of inflationary pressures on wages and then later in the six months period on energy. Clearly it did affect that. We do feel that we can do better in that, and I think a lot of lessons has been learned in the last six months, and we will apply that lessons to continue to improve.
Thank you. Well done on Project Genesis. Could you please describe climate change risk and opportunity and your planning around this?
Yeah, I think climate change risk is clear for all of us. You can see it in the volatility of no rain, too much rain, and anything in between. All we can do is to be a very responsible citizen to make sure that, in terms of sustainability, we do the right things in Wynnstay from where we look at our formulations and what raw materials we're using. Are we actually run the business ourself? Are we use energy? Are we use plastics in our business? Clearly from internal point, there's a lot we are doing and more we will do. In terms of then how that affects financial outcome of the industry, we just have to work close with our customers and make sure that we diversify risk by doing more than one thing.
We believe at the circular product basket we spoke about from seed to fertiliser to our stores to focusing on poultry and dairy, lamb, and so on, focusing on our seven core categories. That all will actually help us to have a more stable financial income, and profitability during times of volatility. I don't think that is something which will go away. Therefore, we just have to be ready to be able to, and resilient enough to handle these ups and downs in our business. Therefore, I would like to conclude what Rob just said as well. We can't wait for these things to happen and then to react. We have to be in control of our business and come up with new ideas continuously, and I like to believe that we've already showed that we've got the ability to do so.
That's great. The next question we have here reads, may I ask if you intend to stay in the AIM market or move to the main market? I anticipate many farmers with shares would like to pass them on within the now depleted inheritance tax allowance.
I can't really comment on that. That is not a discussion we had properly. We are happy to be where we are today, but it doesn't mean that we won't continuously have that discussion at board. For now, we are going to stay where we are, but those discussions will obviously continue to happen. What I can say is we understand that our role to play as a business is to be a good stakeholder for customers, for our colleagues which work in our business, and also for our investors. For now, my focus and our executive team focus is just giving the best returns possible. Then we'll have to just measure this type of stuff as it comes.
In the past, a strong harvest has led to strong final month trading and also strong GrainLink revenues in H1. Is that still the case?
Rob, do you want to take that one?
Yes. In the past, GrainLink has benefited from strong harvests. This year, I think that the benefits we've seen in GrainLink have been driven by the internal changes we've made. The conditions that we've got at the moment have, I think, been reasonably positive in terms of where the harvest is going to take us. That bodes well for the underlying fundamentals that will impact GrainLink as they go into the second half and into the new financial year. Again, in terms of our performance in the final quarter, in autumn of the year, a lot of that comes from our seed business, and that's more to do with planting conditions as we go into autumn. Obviously, good harvests are generally positive for our arable business and grain trading operation.
That's great. Just turning to the next question. When do you see material benefits of Strategy Genesis kicking in?
I think we've already saw it. We're seeing it in the increases of fertiliser, 12% fertiliser growth because of the investment we made in Avonmouth. The ability now to have capacity to sell it. I think we are already seeing it. We're seeing it in GrainLink. We've created the capacity, and I think therefore it's reasonable to expect that we will start seeing it in our feed milling business as well over the next two financial years. Our performance in our stores has always been solid. This last six months, it was disappointing. I think we can correct that very fast. I think we already started seeing it, and we should continue to see that, of course, that focus on our seven core products, and selling more of it.
There is no reason why we shouldn't see it over this five-year business plan which we presented to our board.
That's great. The next question we have here reads, "In the results for each of the three segments, what have been the main contributors to scale and profits variation between H1 and H2 in recent years?
Okay. If we look at our first half and second half, over recent years, and as we mentioned actually in the presentation, Wynnstay has got a seasonal business. It does follow the agricultural calendar. Traditionally, we have higher profits in the first half, replicating the stronger fertiliser production we do in the spring season. The higher levels of animal feed we sell over winter and into the spring lambing season. Also, within our stores business, as we find in spring, there's more on-farm work that leads to higher sales and profits through stores. There's a number of things that we can do though to try and mitigate that seasonality. I hope those came through the presentation.
Within the feed milling business, aligning our pullets business to Wynnstay feed contracts means that there'll be a more stable demand, which will mean that we can have a more stable throughput through our feed mills, which will improve efficiency. One of the huge initiatives we're undertaking in arable is how we can remove some of the seasonality there by looking at our manufacturing footprint. We have a significant portion of our seed business sales which comes through in the autumn period. Where we can have multi-skilled operators who can run a seed plant or work in a fertiliser blending or feed blending operation, we see that as a really good way that we can balance the first to second half performance.
Again, we will continue to be impacted by that seasonality, but there's lots of things that we can do to try and offset it and flatten it throughout the year.
That's great. Thank you for answering all those questions you have from investors and of course, the company can review all questions submitted today, and we'll publish those responses on the InvestorMeetCompany platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Alk, could I please just ask you for a few closing comments?
Yes, absolutely. Thank you everybody for attending today's session. Wynnstay is a great business. We are very, very proud to be part of food security for Great Britain. That's how we see our task. We're proud to be invested in Great Britain, where we have the best farmers in the world. We believe that we control our own destiny. We are able to handle the headwinds which we will see from year to year. We are very ambitious team, focused, great talent in the team. We have unbelievable colleagues right through the business. We've got a great board of directors, and we will continue to work very hard and focus to reward our investors. We will do everything we can to continue to make everybody proud. Thank you very much.
That's great. Thank you for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.