Mole Valley Farmers has reported increases in profit and revenues from its latest full year’s trading, despite the Covid-19 lockdowns, supply chain disruptions and cost inflation.
The farmer-owned business has reported a Group operating profit of £5.41 million on revenues of £521.89m in year ended September 30th 2021, compared to £2.75m and £473.17m in the previous twelve months. The pre-tax profit in the latest period was £4.44m (£1.61m).
The Group’s rural retailing activities saw revenues increase year-on-year to £250.8m (£226.82m) with the other core division, Agriculture, rising to £246.39m (£225.6m).
This uplift in revenue was due to strong sales across the retail business and some element of inflation in key agricultural products and animal feeds. The Group’s total membership is up by 21% over the twelve months to 99,240 – its highest ever level – including 34,000 in the country member category which rose by 35% in the period. MVF returned £2.2m to shareholders and country members in point-of-sale benefits in 2020/21.
The company describes the feed market as one of the most challenging for its shareholders and customers, with rising raw material prices, energy costs and supply chain disruptions. But with 910,000 tonnes of manufactured and traded feed in the period, it says overall ruminant feed volumes were in-line with the previous year on a like-for-like basis, after the strategic decision to reduce third party manufactured volumes. As a farmer-owned business, MVF intends to focus more on direct-to-farm feed accounts while reducing its reliance on ‘trade’ tonnage.
There was a 2.6% rise in the feed mineral volume made by the company at 24,422 tonnes.
The period saw a significant increase in feed material costs: between September 2020 and September 2021, the average wheat price rose £50/tonne; barley by £85/tonne and soyameal by £150/tonne; on top of a shortage of hauliers that both added to cost and disrupted collection and delivery service levels. “Despite this, we honoured our sales contracts at a time when others have sought to pass these costs on or renegotiate the price,”.
The company is helping customers meet the environmental pressures building on agriculture by declaring the carbon footprint on the label of all its conventional cattle and sheep compounds and blends. It is also working on a more holistic approach to farm productivity across nutrition, animal health and performance, utilisation of on-farm resources and land, together with the housed environment, by investing in the MVF team of nutritionists, veterinarians, agronomists, environmental specialists and business development managers.
The Mole Valley Fertiliser business made and handled 125,396 tonnes of fertiliser in the latest full year, a 4% increase on 2019/20. Its dedicated dockside fertiliser blending facility at Newport in South Wales, benefited from UK cropping recovering from the 2019/20 low with a small winter wheat crop.
The business recognises the environmental challenge faced by conventional fertiliser products and is acting now to provide members with alternative products and advice as legislation changes. This includes result further investment in its FACTS trained fertiliser specialists and grassland agronomists.
Investments in the year included a new £5m IT platform across the business to replace a number of legacy systems acquired over recent years and deliver efficiency savings across the whole company. The platform will service both the MVF retail chain – with rollout across the network completing in mid-2022 – and the company’s manufacturing side, with all four compound feed mills now successfully moved across. The company also plans a significant upgrade of its Lifton feed mill.
The Group’s Retail division saw revenues rise £24.3m to £250.8m through the year, comprising £117m from the 12 Mole Valley Farmers stores (up 11.6%); £110 from the 37 Mole Country Stores (11% higher); and £19.9m from the Bridgemans Direct operation (+6.2%).
The retail arm benefitted from being an essential business during the lockdown periods, but also attracted new customers and widened its product portfolio.
Jack Cordery
Looking forward, Mr Cordery warns: “Challenging trading conditions are likely to continue in the year ahead, thanks to continued supply chain challenges, cost inflation, dealing with the implementation of Brexit and the ever-developing environmental agenda.”