The UKs leading supplier of products and advice to the rural community, Countrywide, has posted record operating profits for the fourth consecutive year.
Figures released this week reflect the continued growth and development of the company. Chairman Nigel Hall reports operating profits of £4.0m for the year to 31st May 2011, against £3.6m for the corresponding period last year. Group revenues grew by 10% to £226.3m (2010: £205.8m) reflecting volume growth and increases in raw material prices. After profits on the sale of land of £5m, the group reports profits before tax of £7.9m (2010: £2.0m).
Revenues from Countrywide’s agriculture business increased by 14% to £95.6m, retail by 4% to nearly £79m and energy recorded a 12% increase to £52.1m.
"I am delighted to report record operating profits for another year. The improved performance reflects the hard work of Countrywide’s management and staff in further development of the business and by achieving a deeper understanding of the requirements of the rural community and how best to serve our customers," says Mr Hall.
"This past year has seen many significant milestones achieved for the business, including the completion of a number of acquisitions, store refurbishments including the relocation and opening of a new store in Melksham and the purchase, refit and subsequent move of over 200 staff into Countrywide’s new state of the art head offices in Evesham.
"The Board first approved a three year strategy in 2008 and since that time has achieved a significant and sustained improvement in operating profitability as its benefits have been realised." commented Mr Hall.
"Trading conditions in all our markets are expected to remain challenging, with renewed uncertainty as to the course of economic recovery. The current plan aims to deliver further growth to drive our ambitions as the leading business in the supply of products and advice to the rural community. I’m delighted the acquisition of Heart of England Grain Company Ltd, a large grain trading and horse feed supply, has recently been completed." concludes Mr Hall.
John Hardman, Chief Executive, said "The results are extremely pleasing as we have focused intently on better serving our customers as well as implementing structural and business developments that provide a platform for future growth. All three of our key business units; Agriculture, Retail and Energy have made significant contributions".
Agriculture
"The Agriculture business has performed particularly well against last year and registered exceptional growth," says Mr Hardman. "Operating profits increased to £1.4m compared to £1.0m last year. The strategy to grow our team of on farm ruminant sales specialists has resulted in volume sales of compound feeds increasing by 10% with the contribution from our feeds business as a whole delivering an impressive 30% growth. The effect of higher commodity prices was particularly evident in fertiliser with sales values rising 20% on level volumes. The seed and turf and amenity businesses both had strong years and contributed to an excellent performance."
"Investment in people has been the key to success", says Mr Hardman. "We have recruited a number of highly experienced field sales staff who work in conjunction with farmers to add value to farm businesses throughout our traditional trading area and beyond. On the product side we have worked hard in conjunction with our suppliers to offer customers innovative solutions to the many challenges they face, this is especially the case for livestock producers who have concerns over the long term shortage of grass forage."
Retail
The Retail business continued to make progress with like for like sales increasing by 1.3% and overall sales increasing by 4.0% to nearly £79m. Operating profits remained level at £3.6m a significant achievement in a challenging and highly competitive market. A key part of the retail strategy is the upgrading of stores, says Mr Hardman. "This process is well underway as major refurbishments have been completed at Chipping Norton, Witney and Evesham. The refurbished stores incorporate new countrywide branding directing customers to a wide range of products, supported by advice from qualified specialist staff members in equine, pet, store accounts and animal health in particular; the 50 stores across the business now average four AMTRA qualified staff per store. A key element of the refit programme is the introduction of a new Farmer Service Area, where farmers can seek advice, order feed and buy animal health and arable products from fully qualified members of staff."
In October 2010 Countrywide completed the acquisition of the South West’s largest specialist equestrian retailer, Town and Country Supplies to "further extend our presence in the area and our expertise in the equine industry, a key customer segment for the business," says Mr Hardman.
"We continue to seek opportunities to grow the retail business through a combination of new store openings and business acquisitions. In light of the continuing competitive marketplace we are launching a new value range, which offers exceptional value for money across a wide range of products. Another milestone for the business has been achieved this last year in that we now have well over 75,000 loyalty card holders."
Energy
The business increased new LP Gas bulk tank sales over the year and volumes and margins have grown steadily," says Mr Hardman. "We have recently launched a major new venture that enhances the company’s position in the UK renewable energy sector. Countrywide Renewable Energy, created through our acquisition of 7Y Energy, delivers a full range of renewable energy options from photovoltaic panels to biomass boilers. Launched at the Royal Welsh Show in July, Countrywide Renewable Energy will enable our customers to invest in renewable energy projects, from conception to completion, utilising available Feed-In Tariffs and Renewable Heat Incentives."
Conclusion
Commenting on the future Mr Hardman said, "After record operating profits in 2011 we are aiming to improve our performance again in 2012. The economic outlook generally is tougher than ever before as customers start to feel the pressure of the difficult economic conditions, in particular the impact of measures taken by the government to reduce the public deficit, which has yet to take full effect.
"The outlook for agriculture and the rural economy in general remains positive and this should continue to motivate and support our business specifically. The major structural work we have completed thus far, both in the company’s infrastructure and in improving our customer focus will undoubtedly bring benefits in 2012 and indeed sets the framework for the foreseeable future. This is a very exciting time for Countrywide as we continue to invest in the business and pursue the right strategy for growth and long term prosperity. Our new head offices in Evesham speak volumes about who we are and the future intentions of the business whilst providing a top class working environment and a base to be proud of."
"A final thank you is reserved for all our employees who through their ongoing dedication and commitment to the business have ensured we have achieved another excellent set of results." concludes Mr Hardman.
