Openfield Group Limited, the farmer-owned grain and inputs business, has reported profits before tax of 2.4m for the year to 30 June 2015 (2014: Loss 4.2m), a 6.6m turnaround. The greatly improved performance follows two difficult years for the business arising from a poor harvest in 2012 when the wettest year on record impacted both grain quality and yields, and a smaller national crop in 2013 due to reduced autumn sowings.
In comparison,harvest 2014 produced yields above the long-term average while quality was generally acceptable, notwithstanding that some crops suffered from lower proteins. In addition to the favourable harvest, business performance was further supported by the acquisition of the grain activities belonging to Countrywide Farmers plc, the reintegration of the transport function previously managed by DHL Supply Chain, and an extensive export programme.
Commenting on the performance, Openfield chairman and Worcestershire farmer Richard Beldam says: The headline numbers illustrate the scale of the turnaround. Clearly,the much improved harvest was helpful, but the executive management, led byChief Executive Officer James Dallas, are to be congratulated in achieving not only this result, but on refocussing activity for the long-term success of the business on behalf of members.
Our industry leading pool results were well received by our members and serves to demonstrate our continuing resolve to return value to our committed members through our broad range of products.
During the marketing year Openfield ceased to act as the marketing partner for two members of the central store network. Although they chose to work with a different marketing agent, the grain activities acquired from Countrywide Farmers more than made up for the loss in volume contributed by these businesses in the support of Openfields unique consumer contracts which continue to enhance farmer returns.
It is disappointing that other farmer-owned businesses chose not to share our vision for returning value to members, however, we are financially better for it and the reaction from consumers has been entirely positive. We remain committed to our co-operative principles of building long-term alliances with consumers for the benefit of UK farmers and are willing to welcome those farmers who share this philosophy with us, says Mr Beldam.
The relationship with our other stores and groups goes from strength to strength as the developments around the Southern hub of stores, the closer linkage with WestCountry Grain and the further investment in Angus Cereals clearly demonstrates.
As a business Openfield benefits from a sound financial position and continues to operate without any core debt. Borrowings for the year-end were 7.75 million, up about2m on the previous year, but this falls entirely within the working requirements of business and reflects the point in the cash-flow cycle.
Shrewd capital management and good consumer relations enabled Openfield to collect funds from customers up to three days earlier than in previous years. This enabled the business to pay farmers on average nine days earlier. Farm businesses are under intense financial pressure and we have responded by doing what we can to ensure the timely transfer of funds, says Mr Beldam.
Group revenue up0.6% to 749m;
Grain volumes up19% to 4.3m tonnes;
Operating profit of3.2m compared with a loss of 3.0m in 2014;
Pre-tax profit of2.4m compared with a loss of 4.2m in 2014.