Despite very challenging trading conditions relating to reduced farm incomes and unseasonal weather early in the year that adversely effected sales in a number of seasonal product categories, Mole Valley Farmers encouragingly managed to improve performance and achieve an increase in revenue over the previous year to £426 million.
Mole Valley Farmers chief executive, Andrew Jackson says to achieve such positive results in very difficult trading conditions has been “no mean feat”.
He comments: “Throughout the year, demand for many agricultural products has been subdued, particularly, within the dairy sector as understandably many of our farming customers became disheartened and increasingly anxious about a reducing milk price outlook, so naturally cut back expenditure on non-essential farm requisites.
“By maintaining a strong competitive offering and an improved emphasis on differentiation in a number of areas and farm services, pleasingly we did experience some positive growth in the second half of the year in a number of established product categories. This resulted in overall like-for-like customer transactions increasing significantly over the previous year. The business also implemented a number of re-organisational changes aimed at modernising business processes to make efficiency savings.”
A drive to improve competitiveness has enabled the business to retain gross margin at 14.7%, increase year on year EBITDA margin to 13% (£7.9m) and improve profitability. The group pre-tax profit for the year ending 30th September 2016 increased to £2.3m – up £1.2m on the year.
The company closed the year with a strong balance sheet with net assets of £47 million – up 4% on prior year.
Throughout the year, the business has continued to offer savings and benefits to its members, with vehicle sales alone bringing total savings in excess of £600,000.
In the year, the business saw:
• Farmer shareholder numbers increase to 8,487.
• New manufactured farm buildings sales increase by 9%.
• A 10% increase in ruminant feed volume.
• A 15% increase in visitors to its online retail site.
• Overall capital investment totalling £3.2 million, which included the acquisition of the long established and well regarded feed business; A. Nichols Cow Mills Ltd.
Mr Jackson continues: “Mole Valley Farmers’ purpose first and foremost is to ensure our commercial endeavours still create a competitive arena for agriculture inputs. This includes providing a range of added-value services that help farmers improve productivity, profitability and overall farm efficiency.
“It’s at times like this that our values and sense of purpose support the farming community, especially as negotiations progress regarding withdrawal from the European Union. Hearteningly, despite the difficulties and uncertainty this year, members have continued to patronise the business, helping footfall numbers to grow to record levels.”