Farmer-controlled arable marketing business the Openfield Group has posted a loss on lower sales from its latest full year of trading, which it attributes to the small 2016 cereals harvest.
The business has reported a pre-tax loss of £3.3 million on revenues of £655m in the year ended June 30th 2017, compared to a pre-tax profit of £1.7m on sales of £710m in the previous year. There were net assets of £18.5m at the year end, down from £20.8m twelve months earlier, and a surplus working capital figure of £4.9m (£7.7m in 2016). The company says it has no core borrowings.
Openfield says its UK domestic market share grew “considerably”, despite the period’s “very tough trading conditions relating to lower 2016 harvest volumes and market dynamics relating to milling wheat premiums”. Grain volumes handled fell to 3.9 million tonnes in 2016/17, of which 800,000 tonnes were exported.
Capital investment in 2016/17 included a £250,000 colour sorter installed at the central seed production plant at Openfield’s Honey Pot Lane headquarters in Lincolnshire and the renewal of the in-house truck fleet technology to further improve logistical efficiencies in the cereal, seed and fertiliser businesses.
“The results reflect very tough trading conditions coming out of a small 2016 harvest,” notes incoming chairman Philip Moody, who succeeded Richard Beldam last year. “Openfield has always managed its own profitability to strike a balance between maintaining our financial strength and balance sheet and supporting our members in challenging marketing years, which we continued to do last year.
“We are also very pleased to note that our membership grew by 19%, which continues to strengthen our future growth plan. Openfield’s strategy is to work with their members and some of the best known British food and drink brands to create vertically integrated supply chains that drive value and service.”