Countrywide announces a before tax profit of £4.3m and a £8.9m reduction in net debt

The Board of Countrywide Farmers Plc has today published its annual report & accounts to 31 May 2007.

John Pugh, in his last Chairman's Report before his retirement, announces a profit before tax of £4.3m for the year ended 31 May 2007. Mr Pugh explains that this has been achieved through the sale of surplus freehold land at Evesham for gross proceeds of £11.2m of which £6.8m was received in October 2006 and the balance of £4.4m in June 2007. "The business continues to focus on strengthening its balance sheet and reducing financial gearing. I am therefore delighted to report a £8.9m reduction in net debt since 31 May 2006," he explains.

"Gearing now stands at 40 per cent of shareholder funds at 31 May 2007 (2006: 86 per cent), and this represents its lowest level since the business was formed in 1999. Shareholders' funds amount to £30.3m, an increase of £5.8m in the year. This is the equivalent of £0.92 per share (2006: £0.75 per share)," he continues.

Mr Pugh adds: "It is my intention to retire as Chairman at the October meeting of the Board, and I will then retire as a Director at the end of December 2007. I am delighted that Nigel Hall, who joined the Board in January 2005, and has made a significant contribution to the development of the business since then, has indicated his willingness to succeed to the Chairmanship."

John Hardman, Countrywide's Managing Director also comments in the Report: "Market conditions in each of our main businesses proved challenging and major changes have been implemented that will strengthen the business in the longer term. Our Group operating profits before exceptional items were £0.3m in 2007 (in 2006 they were £1.4m before £0.2m reorganisation costs)," Mr Hardman explains.

"In 2007 we have focused on reviewing the cost base of the business and ensuring the property assets of the Group are used to best effect. This has resulted in some major exceptional costs in the year. These actions simplify and give greater focus to the operations of the business, reducing its cost base and therefore ultimately improving the profitability of the business. "

And looking forward to the coming year John Hardman adds: "We have a number of opportunities to expand the retail store portfolio in 2008 in addition to those new stores that are already due to open in the next three months. The retail business model we have is unique to Countrywide and differentiates us in the rural marketplace."

"The reorganisations announced in our Agriculture business will ensure this business is profitable in 2008. We expect market conditions to remain challenging as raw material prices continue to increase significantly which will represent a challenge for us in terms of maintaining margins. We have invested in our field sales force who can add value to farming businesses. There will be further investment in people and technology in our direct sales team to meet the changing buying habits of our customers."

"Further capital is being invested in our Energy business extending our fuel trading area into the south west with a fuel distribution plant due to open in Weston-super-Mare."

"Renewable energy is a rapidly evolving and exciting new market for both businesses and consumers. With our range of business across agriculture, energy and retail we are uniquely placed to exploit this market," Mr Hardman concludes.

The Countrywide AGM takes place on 27 September 2007, 2pm at Pershore College.