Mole Valley Farmers delivers strong financial results to Farmer Shareholders

Mole Valley Farmers, one of the few remaining farmer owned agricultural supply businesses in the UK, reports a robust trading year, attributing this to the loyal patronage of its Farmer Shareholders, sustainable business investment and innovation as well as the hard work and dedication of its staff.

Despite the challenging economic conditions, Mole Valley Farmers, firmly rooted in cooperative principles, has achieved a record turnover of £350.4 million for year ending 30th September 2012, a 6.9% increase of £22.5 million over the previous year.

For the fifth consecutive year, Farmer Shareholder members have increased reaching 7,300 this year as the company focuses on providing added value and new service initiatives to its membership, with transaction numbers also up. The economies of scale have enabled the business to buy more competitively and counter some consolidation in the marketplace.

The strong performance allows the company to return a total benefits package to Farmer Shareholders of over £800,000 with a direct Shareholder rebate of £425,000, an increase of 21%, as well as double discount Farmer Shareholder events and increased product promotions to members throughout the year. Profit before taxation increased to £4.4million, a margin of approximately 1.25% of turnover, while bank borrowings were reduced.

Meanwhile, Mole Valley Farmers has invested across the geographically expanded and diverse portfolio of businesses. At the same time there has been continued focus on cost control, improved processes and efficiencies resulting in all parts of the business contributing to the trading result.

Graeme Cock, Chairman, Mole Valley Farmers said,‘The support of Farmer Shareholder members is hugely appreciated and once again has contributed significantly to the overall result. We place enormous emphasis on delivering value to our members and customers as well as ensuring we have a sustainable business which will always remain our priority.’

Price volatility in the feeds ingredients sector, coupled with adverse weather conditions, created on-going challenges in the agricultural side of the business. From the outset, the company concentrated on improving business processes to help mitigate risk. Aggregated volumes for both MVF Feed Solutions and Three Counties Feeds exceeded 515,000 tonnes, with 390,000 tonnes of compounds and blends, 150,000 tonnes of straights and 20,000 tonnes of minerals. Overall dairy feed volumes remained the same with blends increasing 5% and organic feed reducing 9% as members returned to conventional production. More see over…

Each of the four compound feed mills performed well, with greater focus on meeting the demand of peak production, sustained quality and service levels. Continued investment has improved feed production facilities with a new modern grinder at Lifton Mill replacing two 25-year-old grinders, increasing output capacity and reducing energy consumption.

Another key initiative was the introduction of green energy at the Dorchester Mill, with both electricity and gas produced from a newly commissioned anaerobic digestion plant, making it the first and only mill to date in the UK operating solely on green energy.

Emphasis has been placed on innovation and Mole Valley Farmers continues to form research links with leading academic institutes. This has resulted in a research project with Harper Adams into the influence of forage and concentrate on methane output, to be published in April this year. MVF are also involved in the completion of a large scale dairy cow protein study at Schothorst in Holland as well as a collaborative study with Reading University, Milk Link and other industry partners on milk fat type.

The retail store portfolio with bespoke brand formats has worked hard to counter the challenging economic trading conditions, with record transactions of over 4 million and retail sales increasing to £170m on a like for like basis. Trading in the second half of the year was subdued and variable, partly due to the Queen’s Jubilee and the Olympics as well as unseasonable weather.

Mole Valley Farmers branch sales increased to £84m, SCATS Countrystores £44.7m, Mole County Stores (formerly CWG Countrystores) £20.3m and Bridgmans £15.1m. Continuous improvement has underpinned the retail results this year with the emphasis on customer service, new systems and procedures as well as efficient operations to counter reduced consumer spending levels.

Now in its second year of trading, Mole Country Stores (formerly CWG) achieved a positive result in its transition programme. The strategic decision to take the ‘Mole’ brand to a new geographical area outside the South West has created new opportunity in a large agricultural area. The new Mole Country Stores brand was launched in September 2012 to coincide with the opening of the newly relocated store in Newark, Nottinghamshire. The remaining stores will be rebranded by spring 2013.

At the start of the trading year in October 2011, the company acquired Cox & Robinson, one of the longest established and respected agricultural supply outlets in Buckinghamshire. The business has performed well throughout the year with a successful integration.

Mole Valley Farmers online retail operation continues to develop as customers embrace a multi-channel approach to product purchase. Sales grew by 4.4% while visits to the website increased by over 195,000. A new MVF online pharmacy was launched at the 2012 Devon County Show, generating significant interest and providing members with greater influence and control over farm medicine price and purchase.

Molecare Veterinary Services was launched in November 2011 with the first practice at the Newton Abbot branch, serving around 2000 registered customers. Further expansion of the service to other branches is in the pipeline with two large animal practices, Molecare Farmvets, already in operation at Frome and South Molton.

Meanwhile the renewables business, Mole Energy, has seen sustained growth supplying over 25,000 photovoltaic panels with around 375 commercial and domestic installations completed in partnership with approved suppliers. The demonstration site near Bridgwater has enabled the company to be at the forefront of knowledge and innovation, providing a wide range of renewable energy options for members.

Andrew Jackson, Chief Executive, Mole Valley Farmers said, ‘Our emphasis has been on providing uncompromising value to our Farmer Shareholders. Their support in a challenging year is greatly appreciated which is why the rebate and benefits package are an important thank you. We have aimed to improve product offer, technical advice and service across the business using scale to achieve buying power. These important cornerstones coupled with dedicated, hard working staff means the business is in a strong sustainable position going forward.’


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