Leading rural supplier, Countrywide, today announced group operating profits of £0.3m (2009 £0.6m) for the six months trading to 30th November 2010. These were in line with expectations and reflect significant investment in re-engineering the group to be much more customer focussed, an investment which will provide a strong platform to deliver further growth over the coming years.
"I am pleased to report that, despite the continued impact of the economic recession and rapidly rising raw material prices, trading was encouraging across our business" comments Countrywide Chairman Nigel Hall.
Profit after taxation saw a dramatic climb to £3.3m (2009 loss of £0.3m) following the sale of surplus land at Melksham. This has enabled the purchase of a new freehold head office, an important component of Countrywide’s business re-engineering, along with a new store opening and the strengthening of the store development programme.
The overall picture shows operating profits in the retail business up on the same period last year, the agriculture business was level and operating profits in the energy division down.
Retail
Retail remains the most profitable business within the group achieving a like for like sales increase of 4.4% over last year. Equestrian and Farmer events, that offer customers discounts on a range of products, as well as specialist advice and expertise from qualified staff members, have been particularly well received. The acquisition of the Town and Country business based near Exeter was completed in October as part of Countrywide’s strategy. A Reward Card was launched in 2010 enabling loyal customers to receive further offers and benefits and to date 50,000 customers have been recruited.
Agriculture
Raw material commodity prices have increased rapidly, reversing the declines seen in the first half of 2009. This has resulted in an increase in sales values across most products, achieving a significant 10% growth in compound feed tonnage reflecting the continued strengthening of the specialist agricultural team backed by value for money products and services. The performance of the straights and blends business was more mixed with volumes ahead but margins down in what has become an increasingly competitive market. The outlook for UK agriculture continues to look increasingly positive and the agricultural business is actively looking to grow more rapidly adding value to both livestock and arable farmers by offering on farm expertise delivered by a dedicated team of farm account managers.
Energy
The energy business has seen higher sales volumes with in particular gas volumes up by nearly 12% in the first half year. However as expected margins were lower and left overall performance down on last year.
In October, 7Y services was acquired, a rural farm services business providing a broad range of assistance from contracting and training to I.T. support and staff and in addition a specialist renewable energy business that complements existing expertise; as such Countrywide now offers a complete package of renewable energy services and products, with specialist staff to give advice on renewable energy options for the rural community.
Developing the energy business is a key strategy and Countrywide continues to explore ways to expand its trading area.
Outlook
"The Board expects the Group’s performance to improve in the second half of the year, and for full year operating profits to be well ahead of that reported last year" concludes Mr Hall
Mr Hall ends his report by focusing on the work of Countrywide staff and thanks them for their "commitment and dedication" and "working tirelessly to continue to drive performance in the short term while putting in place the building blocks that will make a real difference to the business and its customers in the longer term."