Mole Valley Farmers reports a solid trading year for the year ending 30th September 2019 despite the impact of seasonal weather and economic uncertainty on farmers’ purchasing habits.
Andrew Jackson – who was CEO for the accounting year, but handed over to Jack Cordery in May 2020 – says the 2019 trading environment was hugely different to the previous year, where a late spring and drought created increased demand for ruminant feeds.
“With livestock producers benefitting from some exceptionally good growing conditions, our direct-to-farm volumes and revenues have been influenced by the weather,” Andrew explains.
“Also, given the economic uncertainty surrounding Brexit that prevailed over the wider economy and the agricultural industry, our farming customers have been more cautious throughout the year and seem to have spent less on non-essential items.”
Despite this, the feed business exceeded budgeted volumes by 4.2% and demand for dairy products and ranges remained strong. There was a marginal increase in group revenue to £495 million, thanks to commitment from Farmer Shareholders. Yet again, Farmer Members increased year-on-year, with numbers now exceeding 9,000. Group operating profit was £2.4 million. Total group EBITDA was £7.7 million – up from £5.1 million in 2018.
Mole Valley Farmers has continued to invest in improving efficiencies and innovation to adapt to variable market conditions and help Farmer Members cope with similar challenges. This has included upgrading the business IT platform to Microsoft AX and driving technical developments in feed and the Precision Nutrition rationing programme.
The business has also worked hard to address issues surrounding product replenishment in store. On-shelf availability now features reliably at around 90%, thanks to an in-depth review of product flow and a focus on key product ranges.
Rural retailing stores achieved a sound result for the accounting year, delivering a 1.8% increase in revenue. This reflects the continued effort of the business to compete harder in a more rigorous trading environment.
In addition, the business reports:
- Store revenue: Mole Valley Farmers; £105.7 million, Mole Country Stores; £91.7 million, Bridgmans Farmdirect; £24.6 million.
- £1.8 million delivered in savings to Farmer Shareholders.
- £1.2 million saving on new vehicles passed to customers.
- Fertiliser volumes exceeded 140,934 tonnes.
- Mole Insurance maintained a customer retention rate of over 95%.
In the summer of 2019, accountancy errors were identified concerning the previous audited financial year. This was related to internal allocations between the various trading divisions of Mole Valley Farmers and stock item reconciliation. As a result, readjustments of around £3.8 million have been made to the 2018 numbers.
A thorough review has been undertaken and processes have been implemented to ensure greater control over the business accounting systems. No fraudulent activity occurred. New integrated accountancy software has been installed, which will help prevent reoccurrence, alongside ongoing reviews of financial controls.
In reference to the 2019’s performance, Andrew believes it is satisfying to report a reasonable result, despite challenging conditions. At the same time, the business has remained resolute in achieving a number of progressive operational objectives.
He adds: “With Jack Cordery at the helm, Mole Valley Farmers remains committed to driving a competitive pricing advantage and choice at a time when agriculture and the wider economy must contend with so much indecision.”