Mild winter impacts trading results for Countrywide Farmers
Leading supplier of products and advice to the rural community, Countrywide Farmers, today announced full year results to 31st May 2014 as the mild winter of 2013/14 and a falling commodity market significantly impacted the financial performance.
Nigel Hall, Chairman of Countrywide
Leading supplier of products and advice to the rural community, Countrywide Farmers, today announced full year results to 31st May 2014 as the mild winter of 2013/14 and a falling commodity market significantly impacted the financial performance
Figures released today reveal a 2.5% fall in group turnover to £298.2m(2013: £306.0m) and a fall in operating profit before exceptional costs to £1.9m(2013:£4.3m).
“These are disappointing results, particularly in the light of last year” commented Chairman Nigel Hall, “however the reasons are very clear. Trading conditions in general remain challenging and though the Company is well placed to address this environment, the mild winter impacted upon our business with a fall in volumes of 20% in LPG sales and 15% in compound feed sales”.
“We are confident that 2015 will see an improvement as we believe progress can be made across all areas of the business. A more normal winter will also have a positive impact upon profit. Our growth strategy remains focused on delivering a true multi-channel approach to service our customers and to increase market share. Our investments in Customer Relationship Management (CRM) and a fully integrated IT platform will help deliver substantial progress in the near term”.Concludes Mr Hall.
John Hardman, Chief Executive
Commenting on the results John Hardman, Chief Executive recognised the impact of the weather but believes the underlying strength of the business is robust and that the future performance of the business will be significantly improved by the further development of its multi-channel strategy.
“We have finished the analysis and design stage of Project Fusion, a project looking at overhauling all processes across the business and implementing a fully integrated IT platform. We are now ready to implement technology which will draw together our existing 53 store network, in-field sales team, on-line, E-commerce and telephone traders, all aimed at enhancing the experience of our customers and making it easier for them to access the products they need, as well as driving efficiency across the business”.
Direct
Sales from Countrywide Farmers agriculture and energy business saw a decline in turnover to £201.8m (2013 – £214.4m) due to lower LPG and compound feed volumes.
The alternative feeds and arable business both showed increases in turnover and operating profit. The arable business has grown significantly and the integration of the trading businesses acquired over the last 2 years has created a strong platform with the ambition in the near term to trade 1million tonnes of grain and continue to offer the arable industry a growing alternative.
Retail
Although trading remained challenging during the year the retail business grew like for like sales by 0.5%, despite the mild weather adversely affecting a number of key categories. Margins fell slightly due to a successful initiative to clear terminal stock.
During 2014 more than 23,000 new customers joined the Countryclub loyalty card with total membership now exceeding 145,000.
“We now have the largest loyalty card programme within the rural sector”, comments Mr Hardman, “providing us with invaluable data to help focus our customer service. We have responded to feedback from customers and launched this year our first equine catalogue, a key component of our multi-channel strategy. ”
Outlook
The UK economy is showing clear signs of recovery and increasingly observers are commenting on a return to what appears to be long term growth.
“Although some agricultural commodity prices are under pressure I believe the outlook for agriculture remains positive as global demand for food, renewable energy and rural access and development remains strong. Against this backdrop I anticipate a stronger business performance from Countrywide in 2015”
Finally I would like to thank all our employees who continue to work tirelessly in the support of our business and the rural community. They are our heritage and when armed with industry leading information technology systems will continue to be the backbone of the business as we move forward.”
