Dobbies believed to be the only possible buyer for NWF garden centres

Dobbies is the only garden centre group that might conceivably buy the NWF Group, according to agent Simon Quinton-Smith.

NWF is believed to have agreed terms for its six centres after having been on the market for the past three months. This follows on from a year of mixed fortunes that saw the specialist animal feed/farming distributor's turnover jump while profits slumped.

Quinton-Smith said: "Dobbies is the only potential purchaser in the market at present. Up until now the firm has only bought freeholds but under Tesco ownership there may be changes."

Four NWF centres are leasehold and two are freehold, which could put off some buyers. Value of the freeholds is about £10m and a few million more for the leaseholds.

Sources suggest NWF has been talking to "several" possible buyers before announcing the sale, including Dobbies. NWF refused to name names or asking prices.

Chief executive Richard Whiting said: "A full sale process is underway and we expect to complete a sale later this year."

The garden centres employ 500 staff, led by divisional managing director Ian Barnes. They made a loss of £300,000, due in part to bad weather, against £200,000 profit in 2007. Whiting says the sale arose because of the "historic low returns of the division", the desire to rationalise business, the chance to reduce group debt and the high levels of cash needed to invest in additional centres.

"This is more a strategic than a tactical move. Six centres need a high capital requirement to develop. We want to focus on distribution."

Preliminary results for the year to June saw group turnover rise a fifth to £361m. But pre-tax profits tumbled by £1.6m to £4.2m.

The 1,500-staff group, based in Wardle, Cheshire, dates back nearly 140 years, and its other divisions are feeds and fuels as well as garden centres and distribution.

NWF's six centres have a turnover of £20m, while the company's loss amounts to £300,000 to 31 May 2008.

Individual centres:

- Wheatcroft, Nottingham - leasehold estimated to cost £400,000 a year in rent.

- Rivendell, Widnes, Cheshire - valued at £5m-£6m.

- Ashton, Manchester - leasehold.

- Victoria, Pontefract, South Yorkshire - freehold value £4m-£5m.

- Woodford Park, Woodford, Cheshire - estimated to cost £600,000 a year in rent.

- Dukeries, Worksop, Nottinghamshire - leasehold.


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