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05/10/2006
Countrywide Farmers reports big financial turnaround
Countrywide Farmers plc (CWF), the UK's leading farming, equestrian and rural supplies business, has reported a profit before taxation for the year of £0.2 million compared with a loss of £3.0 million in 2005.
Announcing the annual results, CWF Managing Director, John Hardman welcomed the improvement in the Group's fortunes, especially as it was achieved against a background of such difficult trading conditions in the farming sector.
"Last year's Group results demonstrate real progress in the turnaround of the business. Sales increased by 5.5 % to £159.8 million (2005: £151.4 million) and generated a Group operating profit before reorganisation costs of £1.1 million (2005: £0.4million). This encouraging result is driven by significant improvements in the retail business and the start of a turnaround in our Agricultural Division".
"The improvements in the Agricultural results are particularly encouraging as we have had only nine months' benefit from the new arrangement through which we outsource compound feed manufacture," said Mr Hardman.
Other key points from the CWF year end report include:-
Agriculture - In one of the most difficult years since foot and mouth disease, the CWF Agricultural business reported operating losses of £0.6 million (2005: £0.9 million loss) after reallocation of Group head office costs. Total Agricultural sales fell by 6.7% to £68.2 million (2005: £73.1 million) driven by further contraction in the market, particularly the compound feed and fertiliser sectors.
Total feed sales were £44.5 million (2005: £46.9 million). We reversed the trend of continuing lower feed margins year on year. Overall, the compound feed business improved considerably from last year.
The Alternative Feed business continued to grow and increased sales by 15%. Further growth is expected as CWF positions itself to meet the increasing demand from livestock farmers seeking value in the feed market as they strive to contain costs and maintain quality in milk and meat production.
Total Arable sales of £23.7 million (2005: £26.2 million) principally reflected a further decline in the fertiliser market. The crop protection and seed business sales were similar to last year, representing an increase in market share. The field based arable sales team is now supported by a direct selling operation. Within this, Turf and Amenity sales continue to improve their market share with sales of £0.8 million (2005: £0.7 million) and increased profits.
Retail – Despite difficult trading conditions and rising energy costs, operating profits from our Retail Division significantly improved to £1.4 million (2005: £0.8 million). Retail is now the most profitable business within the Group. Sales increased by 6% to £57.2 million overall and "like-for-like" sales increased by around 1%. New stores opened during the year are in line with expectations. Key growth areas were pet food, equestrian products and footwear.
Energy reported sales growth, but margins were eroded by escalating oil prices and the cost of growing the Utilities business. This prevented a repeat of last year's record profit. However, despite the market volatility, an operating profit of £0.5 million was recorded (2005: £0.8 million).
Fuel volumes increased by 7.7% including profitable expansion of our trading area and fuel product card.
LP Gas volumes increased by 5% with the majority of the growth from new customers as the Countrywide Energy offering is rolled out to a wider geographic area.
In his Annual Report, CWF Chairman, John Pugh, said: "The past year has been one of considerable progress for Countrywide Farmers plc. In line with our strategic objectives, outlined in last year's Chairman's report, the Group has achieved significant financial success and is reporting a profit before taxation for the year. Improvements in our trading performance, particularly in the Retail Division, cost reductions from consolidating the head office in Defford, together with the decision to cease compound feed production have generated a major improvement in profitability at the operating level."
Announcing the annual results, CWF Managing Director, John Hardman welcomed the improvement in the Group's fortunes, especially as it was achieved against a background of such difficult trading conditions in the farming sector.
"Last year's Group results demonstrate real progress in the turnaround of the business. Sales increased by 5.5 % to £159.8 million (2005: £151.4 million) and generated a Group operating profit before reorganisation costs of £1.1 million (2005: £0.4million). This encouraging result is driven by significant improvements in the retail business and the start of a turnaround in our Agricultural Division".
"The improvements in the Agricultural results are particularly encouraging as we have had only nine months' benefit from the new arrangement through which we outsource compound feed manufacture," said Mr Hardman.
Other key points from the CWF year end report include:-
Agriculture - In one of the most difficult years since foot and mouth disease, the CWF Agricultural business reported operating losses of £0.6 million (2005: £0.9 million loss) after reallocation of Group head office costs. Total Agricultural sales fell by 6.7% to £68.2 million (2005: £73.1 million) driven by further contraction in the market, particularly the compound feed and fertiliser sectors.
Total feed sales were £44.5 million (2005: £46.9 million). We reversed the trend of continuing lower feed margins year on year. Overall, the compound feed business improved considerably from last year.
The Alternative Feed business continued to grow and increased sales by 15%. Further growth is expected as CWF positions itself to meet the increasing demand from livestock farmers seeking value in the feed market as they strive to contain costs and maintain quality in milk and meat production.
Total Arable sales of £23.7 million (2005: £26.2 million) principally reflected a further decline in the fertiliser market. The crop protection and seed business sales were similar to last year, representing an increase in market share. The field based arable sales team is now supported by a direct selling operation. Within this, Turf and Amenity sales continue to improve their market share with sales of £0.8 million (2005: £0.7 million) and increased profits.
Retail – Despite difficult trading conditions and rising energy costs, operating profits from our Retail Division significantly improved to £1.4 million (2005: £0.8 million). Retail is now the most profitable business within the Group. Sales increased by 6% to £57.2 million overall and "like-for-like" sales increased by around 1%. New stores opened during the year are in line with expectations. Key growth areas were pet food, equestrian products and footwear.
Energy reported sales growth, but margins were eroded by escalating oil prices and the cost of growing the Utilities business. This prevented a repeat of last year's record profit. However, despite the market volatility, an operating profit of £0.5 million was recorded (2005: £0.8 million).
Fuel volumes increased by 7.7% including profitable expansion of our trading area and fuel product card.
LP Gas volumes increased by 5% with the majority of the growth from new customers as the Countrywide Energy offering is rolled out to a wider geographic area.
In his Annual Report, CWF Chairman, John Pugh, said: "The past year has been one of considerable progress for Countrywide Farmers plc. In line with our strategic objectives, outlined in last year's Chairman's report, the Group has achieved significant financial success and is reporting a profit before taxation for the year. Improvements in our trading performance, particularly in the Retail Division, cost reductions from consolidating the head office in Defford, together with the decision to cease compound feed production have generated a major improvement in profitability at the operating level."
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