Mole Valley Farmers, one of the few remaining farmer owned agricultural supply businesses in the UK, reports a strong, robust trading year, attributing this to the loyal patronage of its Farmer Shareholders, sustainable business investment as well as the hard work and dedication of its staff.
Despite the challenging economic conditions, Mole Valley Farmers, firmly rooted in cooperative principles, has achieved a record turnover of £400.7 million for year ending 30th September 2013, a 14.36% increase of £50.3 million over the previous year.
Overheads have been tightly controlled resulting in administration cost as a percentage of sales reducing to 13.0%, consequently profitability before taxation increased to £5.7million, a margin of approximately 1.41% of turnover. Borrowings increased to £13.4 million in part to support additional working capital requirements, but also to finance further acquisition. Balance sheet has been further strengthened with assets now standing at £42.1m.
Farmer Shareholder members have once again increased over the previous year, now reaching 7,700 as the company continues to focus on providing added value and new service initiatives to its membership, with transaction numbers also up. The economies of scale have enabled the business to buy more competitively and counter some consolidation in the marketplace.
The strong performance allows the company to return a direct Shareholder rebate of £450,000, an increase of 6% on the previous year. Now in its seventh year, the accumulated amount of redistributed to members is over £2.6 million in vouchers and over £2 million in specific farming input savings.
During 2013, Mole Valley Farmers acquired, long established North East based farming business of Farmway. With eight rural retailing stores, a grain store and a seed dressing plant the acquisition further expanding Mole Valley Farmers geographical reach and portfolio of business.
Graeme Cock, Chairman, Mole Valley Farmers said, ‘The acquisition of Farmway in March now extends our trading area of business to the Scottish borders and fits with our strategic development plans. This Farmer Owned business based in the North East of England has a history going back almost 50 years and is a neat fit to our extended geography.’
More positive market dynamics during spring and summer months supported milk & red meat price increases for livestock farmers. An improved harvest led to an easing of feed commodity prices, resulting in much needed improvement in farm incomes. Market conditions translated into aggregated volumes across Mole Valley Farmers Feed business exceeding 620,000 tonnes, with over 400,000 tonnes of compounds and blends, 203,000 tonnes of straights and 20,000 tonnes of minerals.
Further investment in the alternative feeds sector during the year resulted in the opening of a fourth trading office in Hungerford staffed by a team of experienced traders who will service farmers across Central and Eastern England. In February, a new moist blending site was opened in partnership with an existing farmer shareholder to manufacture a range of moist blends all year round. During August, a new grain processing site, again, in partnership with a farmer shareholder, will now produce caustic treated wheat, conventional rolled cereals and Maxammon treated grain and maize, exclusive to Mole Valley Farmers.
Turnover increased within Mole Valley Feeds solutions by 24.6% to £154.8 million, whilst it’s Three Counties Feed business increased by 17.8% to £26.4m. The focus on Mole Valley Farmers ruminant feed production has been to continue to seek operational improvements and cost reduction. Further investment in factory improvements and the installation of more modern and efficient machinery, coupled with further improvements targeted in logistics and distribution, have combined to deliver a solid financial result for the agricultural division.
The retail store portfolio with bespoke brand formats has worked hard to counter the challenging economic trading conditions, with record transactions of over 4.5 million and retail sales increasing by 9% to £178.9m on a like for like basis.
Mole Valley Farmers branch sales increased to £86.1m, SCATS Countrystores £48.5m, Mole County Stores (formerly CWG Countrystores) £20.6m, Cox & Robinson to £6.5m and Bridgmans at £9.3m. Since March, recently acquired Farmway contributed £6.7m in retail sales. Continuous improvement has underpinned the retail results this year with the emphasis on customer service, new systems and procedures as well as efficient operations to counter reduced consumer spending levels.
SCATS Countrystores delivered a very credible result with sales increasing by £3.8m, an increase of 8.6% on the previous year. Every store, without exception, increased sales on the previous year with growth coming from a good cross section of product categories. The top performing store was Bridgend in South Wales, in only its third year of trading, sales increased by 30.7%. The store has made great inroads into the agricultural sector whilst also attracting significant custom from local non farming customers.
Mole Country Stores (formerly CWG) achieved a positive result in its transition programme. The strategic decision to take the ‘Mole’ brand to a new geographical area outside the South West has created new opportunity in a large agricultural area with sales increasing by 7.1% and transaction numbers growing substantially. Positive improvements are now being seen through the store investment programme. In its first year in new premises, Newark Country Store increased sales by 34.6% principally driven by a staggering 67% increase in transactions. The recently developed store in Stamford has already recorded significant growth in customer numbers and more than doubled its sales in the last quarter.
Plans have recently begun to integrate the existing Mole Country Stores business with newly acquired Farmway Trading ltd. The combining of these two businesses will deliver greater efficiencies and a strong foundation for a fully integrated agricultural and rural retailing business serving both farmers and non-farmers across central and northern England.
Mole Valley Farmers online retail operation continues to develop as customers embrace a multi-channel approach to product purchase. Online orders increased by 4.0% resulting in sales growth of 7.0%. Visits to the website increased by over 20% to over 2 million annually. Over 14000 followers across Facebook and Twitter engage with the business through social media channels.
During the end of 2012, Mole Valley Farmers launched two large animal veterinary practices within their Frome and South Molton stores. Combined, these practices have already attracted over 500 farming clients. The strategy of providing members with a transparent offering on veterinary services and POM drugs as part of a fully integrated farm offering has been well received.
Meanwhile the renewables business, Mole Energy, has installed over 80 Biomass projects, and supplied a further 27,000 PV Panels to domestic and commercial sites during the year. Since Mole Energy started 3 years ago, it has supplied renewable projects across the South West that now produce over 16 megawatts of electricity, enough to power over 7000 households.
Andrew Jackson, Chief Executive, Mole Valley Farmers said, ‘I can assure shareholders that as we grow our culture will ensure we keep our feet firmly on the ground and our priority will be to continue in investing in core agriculture. We believe our values set us apart from our competitors; they underpin our strategy and govern the way we think and behave towards the farming community. We have to build for the future to ensure Mole Valley Farmers market presence continues to create a highly competitive pricing arena for farm inputs. I cannot thank the staff enough for all their hard work and effort during the year, as well as our farming shareholders and rural customers for their continued patronage.’