Countrywide Farmers has announced a two month delay in completing the divestment of its stores chain to Mole Valley Farmers (MVF), while it has also sold its LPG fuels business which effectively leaves Countrywide with no trading assets.
The Countrywide board agreed to sell the Retail division to MVF in late October, subject to review by the Competition and Markets Authority, with completion scheduled to occur before the end of January 2018. But, with the agreement of MVF, completion is now not expected until March 16th this year in order to “enable competition review work to be progressed”.
With the Retail division gone, Countrywide had originally had intended to focus on its Rural Energy and Turf & Amenity businesses (Direct Sales) that reported an operating profit of £2.49m on revenues of £17.96m in 2016. But it has now agreed to sell the trade and assets of its LPG business to DCC plc, the €12.25 billion Dublin-based fuels to healthcare group, for £28.75 million. This deal should complete by the end of March.
The board had also previously announced a decision to “wind down and transfer the Turf & Amenity business to an alternative provider,” although in the event the business was discontinued in November, rather than being sold as an ongoing concern.
The latest disposals leave the business with just its freehold property portfolio and associated rental income. The business is now being managed by former chief finance officer Julie Wirth, who succeeds chief executive John Hardman this week.
Countrywide Farmers was formed in 1999 through the merger of West Midlands Farmers (WMF) and Midland Shires Farmers, although both businesses had been significant consolidators over the preceding century since their formation in Worcestershire in the early 1900s.
It grew to record revenues of £306 million in the year ended May 31st 2013, before a strategic decision in late 2014 to sell its Agricultural activities – feed distribution, grain marketing and arable input sales – as it lacked the scale to compete with larger companies in the sector. It also meant the company could concentrate on its higher margin Retail and Direct Sales businesses in line with an ambition to seek an Alternative Investment Market listing.
However, a series of subsequent Retail losses, attributed to reduced farmer spending, competitive trading conditions and the difficult and delayed implementation of a new £6m retail IT infrastructure to replace a number of legacy systems, prompted the board to seek a buyer for the Retail division in May 2017.
“We are delighted to have reached an agreement with DCC plc to acquire our LPG business,” comments Ms Wirth. “This represents an excellent opportunity for the Countrywide LPG brand to continue to grow and flourish within a leading international sales, marketing and support services group which already has a strong LPG division operating in nine countries across Europe.
Managing director of DCC LPG Henry Cubbon adds: “We are delighted to welcome the Countrywide Rural Energy – LPG team to the DCC business and look forward to continuing to develop the Countrywide LPG brand into the future.”