The Openfield Group of arable marketing businesses has reported a surplus in the year ended June 30th 2020, its third consecutive year of profitability. Figures for subsidiary Openfield Agriculture are not published yet.
The farmer-owned Group has reported a pre-tax profit of £356,000 on revenues of £638 million in the year ended June 30th 2020, compared to £460,000 and £634m in the previous year. With tax credits relating to previous losses included, the post-tax profitability figures are £358,000 for 2020 and £645,000 in 2019.
Operating costs were 2.9% higher at £15.5m in the period, up from £15.1m in 2018/19. Group net assets (excluding the pension fund) rose by 5.5% to stand at £27m on June 30th 2020 from the prior year’s £25.6m.
The Group says profitability would have been higher save for the cost of a restructure of its operations and expenditure on new logistics software and systems. However, this investment will reduce future costs and further improve member services, while helping the business position itself to meet the challenges arising from the small 2020 harvest.
The latest figures reflect marketing activities after the large 2019 cereals harvest. The increased volume of quality wheat compared to earlier years created export potential and reduced imports. A big barley crop resulted in the highest export volumes for four years, with Openfield exporting Panamax sized consignments to Saudi Arabia. The Group’s total exported volumes for the 2019 crop reached a four year high at 912,000 tonnes.
However, the continuing reduction in the UK oilseed rape crop area saw the largest imports on record in 2019.
“I’m very pleased to see Openfield continuing to deliver sustained profitability,” reports Group chairman Philip Moody. “We have proactively restructured our operations to prepare for a small crop year in 2020. We have also invested to improve our logistics capability which will further improve our member service. This means that we can look forward with confidence as harvest volumes for 2021 are expected to increase.
“Against this background we delivered excellent results in our grain marketing pools which, coupled with managed risk, continued to demonstrate the value of these marketing options.”