NWF Fuels is a leading distributor of fuel oil and fuel cards delivering over 470 million litres across the UK to 63,500 customers. It is one of the largest authorised distributors of Texaco and is a major customer of other fuel suppliers including Essar, ConocoPhillips and Total.
- Volumes increased 12.9% to 474 million litres (2015: 420 million litres)
- Acquisition of Staffordshire Fuels contributes an annual volume of 32 million litres
- Lower market demand for heating oil as a result of the mild winter
- Revenue decreased by 5.7% to £292.5 million (2015: £310.2 million), as a result of lower oil prices
- Headline operating profit of £3.9 million (2015: £4.3 million)
On 2 November 2015, Fuels acquired Staffordshire Fuels Limited, a 32 million litres per year fuel distribution business operating in Staffordshire and the West Midlands.
Staffordshire Fuels was established in 1996, operates a modern fleet of seven tankers and is an approved supplier of Phillips 66 fuel, branded as Jet.
Martlet Fuels and Home Counties Fuels
Two start-up depots were opened in the year branded as Martlet Fuels and Home Counties Fuels. Both are based in the South East and improve our penetration in this area.
Fuels has delivered a strong growth in volumes for the year utilising the tanker fleet effectively to offset the warm winter and resulting lower levels of market demand for heating oil. The acquisition of Staffordshire Fuels added annual volume of 32 million litres and has been integrated into the division with its operating base and tanker fleet co-located in NWF’s Stoke depot. As with previous Fuels acquisitions, the Staffordshire Fuels brand and commercial team has been retained to ensure there is no change in the customer experience whilst the integration into the Fuels division reduces the cost base as other functions are centralised. The new start-ups at Home Counties Fuels and Martlet Fuels both operating in the South East have performed strongly, delivering over 13 million litres in the first year of operations.
Although volumes rose 12.9% to 474 million litres (2015: 420 million litres), revenue decreased by 5.7% to £292.5 million (2015: £310.2 million) as a result of lower oil prices. The average Brent Crude oil price in the year was $45 per barrel compared to $79 per barrel in the prior year, with a 13-year low point of $28 per barrel in January 2016.
Headline operating profit was £3.9 million (2015: £4.3 million). The result was impacted by lower market demand for heating oil as a result of the mild winter while the prior year included a one-off gain resulting from the dramatic fall in the price of oil in Autumn 2014 as reported last year.
With 63,500 customers being supplied across 19 fuel depots (2015: 59,000 and 17 respectively), the Fuels division operates in markets that are large, robust and can effectively manage the volatility in oil prices.